My post on online real estate innovation yesterday was pretty bleak.
That's still my sentiment, but here's a counterbalance:
I think the single biggest opportunity in online real estate in 2009 lies in improving our grasp on the real estate market at a hyper-local level.
Yes, we have Shiller's index. Yes, NAR cranks out its numbers. And companies like Altos and Terradatum have done a great job using listings on public search sites or MLS data to provide metrics like DOM and price medians.
But still, as the owner of a 3-bed, 3-bath home in the Redwood Heights neighborhood in Oakland, CA, I am pretty much in the dark about my local market. I get a lot of information, but the level of analysis is off. Or the UI is crappy. It's always something.
Two things that popped up yesterday point to ways we may be able to improve on that in 2009.
Realius [disclosure: 1000watt performed consulting work for the company in 2007] announced a partnership with ZipRealty to place its property price prediction application on the Zip site. The idea is simple: Users predict the price they think a listing will sell for. The predictions are collected and run through an algorithm. What comes out is an aggregate prediction based on the "wisdom of the crowd."
I have concerns about accuracy (among other things, including legal bugaboos) but Realius CEO Chuck Teller tells me that, looking back, the model performs very well, which suggests that the model may perform well looking forward.
Which is the point.
We'll see if the idea takes off. HomePredict also plays in this space and has been at it for a while.
Second, REI, the outdoor gear retailer, announced an iPhone application that provides snow reports at ski
resorts across North America. In other words: Current conditions at numerous and variable hyper-local "markets."
I'd love to see a mobile app that applies this to real estate market conditions. To do it right, the data need to be good, the level of analysis needs to be right, and the interface has to be super simple.
The REI app offers some good cues.
I'd love to hear your thoughts on this. I am off base? What am I missing? Where do you see opportunity heading in '09?
– Brian Boero
Local, Mobile, Social and the future of real estate
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That's interesting, sort of an "Intrade" version of Zillow. It would seem to me, though, that the accuracy of those types of "wisdom of crowds" valuations would require an actual crowd, so you need to reach a critical mass. I'm surprised that more companies don't provide good local market analysis, even if they're just re-packaging the aggragate data that most MLS systems put out.
That said, maybe I'm too much of a bricks and mortar guy, but I think the best way to get a fair evaluation of a house is to do a basic CMA-type analysis: what did comparable homes sell for in the past six months, and what are comparable homes on the market for now. Unfortunately, agents have given the "free CMA" concept a bad name, on the level of the "free trip to the poconos, but you have to listen to a two-hour time share pitch," so the last thing most people want is to actually ask a real estate professional for some guidance.
I agree wholeheartedly. No one's done it PERFECT yet. I include myself in that group.
A simple interface is perhaps the most important thing. People THINK they want all of the information at once, but that's often unmanageable in practice.
What's needed is a visually-pleasing and well-managed interface environment that provides meaningful trend analysis at every step.
A user should be able to look at a neighborhood-level market analysis and note two key trends within ten seconds. If this goal isn't achieved, you've only added to the miasma.
An entity that is starting to illustrate some effective new approaches to data analysis and visualization is Quantcast, which provides free web analytics demographics for every website under the sun (www.quantcast.com). Search for a website, then select "Demographics."
@Joseph
I agree a simple CMA is ideal. But also think, as you point out, that the last thing consumers want to do *first* is contact a sales person.
We could go a long way with this whole idea just by better leveraging the MLS. In fact, I think this should be a core MLS function members should push for.
@Jeff
"At a glance" is where it's at!
This is pretty timely for me. In the past 30 days or so I've REALLY been researching the analytics/data angle. It's weird to me that I pay NAR, CAR, etc., etc…yet…no-one gives me MY/OUR data in nice bite-size info chunks in an hors d'oeurves(yes I had to look up how to spell that) kinda way that doesn't spill all over your shirt, at first bite.
Truth be told…this exercise proved very enlightening to me, in regard to some industry heavyweights who use certain data. I'm not here to bash peeps, but I have always been drawn to the Altos Research graphs/charts. Now…their sales guy on the phone was extremely personable, and truth be told…I was hoping to give my business to him, but after learning of their MAI, Market Activity Index…I felt like I just kissed a dude!!
Are you kidding. I'm trying to position myself as an industry professional, who has the current data, only to find out that, a) their data is from public sites, which is notoriously slopply, dated, and eroneous. And b)…this one really gets me…these folks aren't reporting SOLD data…but data that "dissappeared". Yes, that's the data that far too many of my HEROES OF THE PAST real estate professionals have on their sites. Their pitch is…any listing that dissappears, which includes of course, solds, expired, withdrawn, cancelled, contingent. (Including all this fluff is not market data…sorry!)
Between you and I…I'd be lying if I didn't want to "out-this" cheap and lazy attempt and market insight for what it was, on each of these fools websites. Here on this site, I think we're pretty insulated from consumer traffic, and would just like some simple accountability. Altos Research is too close to the bucket to not dunk it in! Don't lay it up!!
To clarify…I'm just saying…these guys are in the ballpark of a tremendous product…but I just don't think they've dug far enough. At the first sign of oil, they dropped their shovels. Keep digging boys…the glory is in the last mile. To re-iterate…I would love to give you my business…but right now, I could not put my name to it.
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Wesley.
Wow, the timing of your post is amazing. We have been developing and concentrating on neighborhood specific market reports and are fine tuning the system. It is so difficult to get that specific data(neighborhood) from anywhere. Which means a lot more work for me.
And I agree, how can you draw any conclusions about general data. How does it really pertain to your neighborhood?
So, we are working on it, on the hyper local level and attempting to have system in place come Jan 09.
We are trying to keep it simple, clear, digestible.
Rita…are you just going to run the data yourself directly from the mls? That's what I've come to. Well, I am going to use BrokerMetrics as they run many of the searches for you, but ultimately it's about data "integrity". If the mls has the best data, and the most accurate, and searchable data, then this is of most interest to the consumer.
Obviously, data directly from tax assessor's office is good too, but I think the mls is the best "sample" of data. If we are to be respected as professionals this is what we should be delivering.
Is anybody else with me in regard to the Altos Research flaws? They don't monitor "sales". They monitor public active listings…until they dissappear, including expireds, etc., and then have a terminology which they made up to justify not having the sold data.
I'm not trying to slander their company or anybody using their data…but c'mon, is it any wonder how we get thrown in the used car salesman sentence.
We claim to be professionals…let's deliver professionalism.
Wesley
What stats/info is the consumer actually looking for? What should we as agents be providing them? This is something that I am hoping to find the answer to so that I can better understand and provide for my buyers and sellers.
@Joseph
I agree a simple CMA is ideal. But also think, as you point out, that the last thing consumers want to do *first* is contact a sales person.
We could go a long way with this whole idea just by better leveraging the MLS. In fact, I think this should be a core MLS function members should push for.
@Jeff
"At a glance" is where it's at!