About Dustin Luther

Founder and original blogger on Rain City Guide, Dustin has since started #InterestedIn Marketing where his team provides content and social media services that helps industry experts earn recognition as thought leaders. You can find me on Twitter (@tyr) and LinkedIn (/DustinLuther)

GoogleBase Heads into Real Estate?

Posted on October 26, 2005 by Dustin Luther

The Search Engine Roundtable brings up the possibility that Google will slip into the real estate market as part of a much large (all-inclusive) database (or GoogleBase). This has a ton of potential and should Google get serious about listing real estate, this should be a major concern to all the people who are creating real estate applications (Zillow, Trulia, Redfin, etc):

There has been some talk this morning onto what will actually be included into Google Base, there are some nice screenshots that have come live this morning. Giving us a little glimpse of how Google thinks the world’s information should be organized. Here is a shot where you can post your items to Google Base and another shot where you need enter in some information about a house.

To get an idea of where they might go, check out this screenshot of a house listing. It is shockingly simple… but then again, the simple solutions are often the best!

Update 1: I was able to get into GoogleBase today and play around a little. I even found the “housing” page that is shown in the screenshot from above. However, when I tried to save a test entry, the system kicked me out. From my early preview, it appears that they’re building a “Craigslist on Steroids!”

Update 2: The NYTimes followed up on the idea of Google getting into real estate: “Among the many projects being developed and debated inside Google is a real estate service, according to a person who has attended meetings on the proposal. The concept, the person said, would be to improve the capabilities of its satellite imaging, maps and local search and combine them with property listings.”

“The service, this person said, could make house hunting far more efficient, requiring potential buyers to visit fewer real estate agents and houses. If successful, it would be another magnet for the text ads that appear next to search results, the source of most of Google’s revenue.”

Update 3: The property grunt had an interesting take on Google Base.

The Rebirth of Redfin?

Posted on October 20, 2005 by Dustin Luther

[photopress:tyler_scott_01.jpg,thumb,alignright]In response to my recent slew of posts on real estate search engines, a reader (Amy Wu) left a comment asking if I’d ever tried Redfin. I’ve definitely tried Redfin and at one point I was a huge fan of their site. As a matter of fact, way back in March (before the days of plentiful google map-hacks), I mentioned how great it is to be able to get a birds-eye view of properties using Redfin. By the way, that was only my 3rd post for Rain City Guide (RCG)!

However, around June, RCG had a falling out with Redfin when they changed their business model to directly compete with Real Estate agents. One of the more interesting outcomes of my June post is that a former employee of Redfin wrote a long comment detailing some of his negative experiences while working at Redfin. After posting the comment, he asked that I delete it after David Ecker (founder and CEO of Redfin) wrote to him threatening a lawsuit.

However, I’m always willing to give people a second chance, so based on the Amy’s prompt, I decided to revisit Redfin. I was pleasantly surprised to find that they no longer mention the service I objected to. Go Redfin! I’m not sure if my posting had anything to do with the elimination of that poorly thought-out service, but either way, I’m pleased to see that they no longer advertise that service on their site.

So, in honor of my complete re-look at Redfin, I thought I’d compare them in the same method that I’ve been comparing sites like Trulia and Home Pages?

The Great:

Neighborhood Focus: Their interface makes it extremely easy to focus on local neighborhoods
Agent Integration: Their business model includes an easy way for agents to sign up and take part in their success!

The Good:

Stability: Their flash maps are much more stable than Home Pages (especially on a Mac)
Real Estate Data: Up-to-date date of homes-for-sale and sold-home
Personalized Mapping: Their maps are quick and don’t rely on another company’s service!
They’re Local: They serve (and only serve) the Seattle area (King County to be specific)

The bad:

They’re Local: They serve (and only serve) the Seattle area. I know from my stats that many of my readers are from other parts of the country/world, and Redfin simply will not help you at all!
Porting to other areas: I’ve heard for quite a while that Redfin was thinking of expanding to other areas, but their web-backend is apparently too complex to easily add to new areas. Having worked extensively with spatial data (GIS) for many years, I’m would not be surprised to hear that they are having problems adding new cities, but it is definitely disappointing. Along those lines, a service like Home Pages that relies on more generic neighborhood data (like school district data available from the Census District) has a much easier time going national!

The Ugly:

Arrogance:

Trulia

LTD

Regardless of their business politics, Redfin offers some pretty darn good real estate mapping features. If you are looking for a home in King County (Seattle, Redmond, Bellevue, etc.), I would definitely recommend checking them out! But when looking toward the future of real estate search, I just don’t see much excitement happening at Redfin, so unless there is a major change in their direction, I doubt they will still seem like an interesting real estate search one year from now (let alone 5 years!).

gHomes?

Posted on October 20, 2005 by Dustin Luther

The Mercury News reports that both Google and Yahoo are in talks with CoStar Group, commercial real estate’s largest firm. With Google’s reputation for building clean and fast web applications and their vast source of neighborhood data from Google Local, they definitely have the potential to build a killer application.

Along these lines, there have been some interesting discussions around the web lately with regards to developing sites around Google Maps. Greg Linden reminded me of a conversation I had a long time ago with Paul Rademacher (of HousingMaps). Back in June, Paul mentioned that he was reluctant to build a real estate search engine using MLS data because (1) all of the data was owned by other people and (2) the mash-ups are so easy to replicate.

I thought that Search Engine Watch had an interesting addition to this conversation when they point out that the real winner of the API/mashup model is often the company that is opening their service up. The mash-ups are a great breading ground for interesting ideas… but that when push comes to shove, the mash-ups are really just providing a way for companies like Google to let others figure out what mapping add-on technologies are worth pursuing:

It also demonstrates what I told a journalist recently about APIs not perhaps being as altruistic as they seem. Give the world an API to your service, and it’s a nice way to let everyone develop new ideas that you might later decide to do yourself, if they seem successful. It’s like Google’s 20 percent time on steroids, because non-Google developers still end up doing work for you.

As someone very interested in the future of real estate search, I’d definitely welcome someone like Google in the mix because I think they could add some some desperately needed innovation to the real estate industry.

Better Late than Never

Posted on October 19, 2005 by Dustin Luther

John Cook’s Venture Blog pointed out today that Zillow got a new look and is now looking for beta users… Much to Zillow’s credit, they’ve created an aura of excitement despite the fact that no one knows what their product will look like, or when it will be available.

This got me thinking that it is clearly time for some updates on real estate search. The past two weeks, I’ve been too busy at work (WAY TOO BUSY) to write any posts, so I was glad that Anna took up some slack and wrote about Home Pages. However, I’ve had this nagging need to write a little more about the site, and I’ve finally found some time. Here are some of my notes from my test-drive of Home Pages:

The great:

Neighborhood information: It is really great that they’ve integrated so many different layers into their map. Just like Home Values, in the very near future all home search sites will need to include information like schools, parks, etc.
Sold Home Info: It’s great to have this information integrated into the search site

The good:

Personalized UI/mapping: I really like that they’ve developed their own user interface instead of relying on one of the big three providers (Google, Yahoo, and Microsoft). That should give them lots of flexibility into the future, although it also means they’ve taken on a whole host of update issues instead of passing the buck on that one. I’ll be interested to hear from someone at Home Values about their experience with this hosting their own mapping.

The bad:

Small map: Why so small? Blow up the size of the map at least 2X
Mac Issues: Elements of the screen don’t show up on my Mac. I lose the entire map at times… (by the way, I don’t notices this problem on my PC at work)

The ugly:

Contact Information: I hate websites that make you give personal information in order to get the full features. As a real estate agent, Anna already gets 2 to 3 junk emails a day from House Values (the company behind Home Pages), so I’d hate to think of the consequences of a potential home buyer giving them a phone number. Be VERY weary of giving them an email unless you want lots of emails that border on spam.

Home Pages is the only real estate search site that I’ve seen that even remotely compares to Trulia… and it has one MAJOR advantage over Trulia in that it is using updated Multiple Listing Service (MLS) data instead of screen scraping real estate sites. This is a huge advantage in that I’ve been told via email, IM, comments, etc that the data on Trulia is incomplete and outdated.

In many ways, my heart is really with the Trulia team because I think they are offering a superior search. I really like the clean UI, the RSS feeds, the home statistics, etc. but if they don’t have the most up-to-date homes available on the market, then I’d be hard-pressed to recommend their site to anyone looking to buy a home. For this reason, I’d have to say that Home Pages currently leads the market at the best publicly-available home search. If you haven’t checked their site out already, then use this post as inspiration to get an idea of where the future of real estate search is heading!

The future does not belong to the collective, long-term agent

Posted on October 4, 2005 by Dustin Luther

I’ve been having an interesting dialog (via email) with a real estate agent who I completely respect. He brings up some interesting issues that I thought were worth bringing to the general public (these ideas want to be free instead of locked up in Google’s email archive 🙂 )

…I can certainly appreciate their (Trulia) desire to ‘break the monopoly’ but keep in mind that the MLS is just a compilation of broker-represented listings. Brokers own those listing and ultimately decide where they go for marketing purposes. ‘Breaking the monopoly’ would mean one would either have to get consensus of a critical mass of the Brokers (90%+) or become a broker oneself and start listing lots of homes. Both are unlikely… Much better to find a way to accomplish the goal of improving search within the ground rules of existing copyright law (think old Napster, new Napster)…

As I mentioned in an earlier post, I really dislike the inefficiencies in the current MLS system, and yet, I can see how everyone benefits from the increased information sharing. If the choice was between the current MLS set-up and a situation where agents all held onto their own data, I’d definitely prefer the current MLS situation…

But that’s not the choice anymore. Before the advent of the internet, it was only logical that agents needed to work together and form a cooperating system so that they could share listing information. And I can totally understand that agents needed listing rules in order to ensure that one rogue agent (or homeowner) didn’t screw up the whole listing situation. I can completely appreciate this history…

But what I’ve described is the historical legacy of the the MLS, not the future. The internet has changed the situation dramatically by making the sharing of information extremely easy! Rather than protecting themselves from one rogue agent or one greedy home owner, real estate agents now need to protect themselves from an onslaught! There is no way that a company that aggregated listing data from agents (as in Trulia) could have been built 10 years ago. And yet today, it seems shocking that such a site wasn’t available a week ago.

I think the comparisons to between Trulia and the old Napster are misleading, and ultimately wrong.

But first the similarities: The old Napster was fought by the recording industry because they facilitated the sharing of valuable information (music), just as Trulia will likely be fought by the real estate industry because they are facilitating the sharing of valuable information (listings).

But the way that music and listings gain value could not be more different. The value of music is embedded in each and every song and can be easily monetized for consumers (Recording industry: “that song will be 99 cents!”). The value of listings are embedded in the entirety of all the listings and each individual listing cannot be easily monetized for consumers (Real estate industry: “that listing will be 99 cents!”).

But far more important… The ultimate client of the recording industry (musicians) benefit only if a song is sold and not if it is illegally downloaded. In contrast, the ultimate client of the real estate industry (home buyers and sellers) benefits every time a listing is seen (illegally or not!). As these aggregating services become more and more popular (options like Trulia, Craigslist, Ebay Real Estate, Google Classifieds, and Zillow), real estate agents are going to be constantly challenged to decide between their individual AND short-term interest (list the home as widely as possible) and their collective AND long-term interest (keep their monopoly on listings!).

In the battle of individual/short-term interests vs. collective/long-term interests, I’d put my money behind the former every time.

Agents: Are you prepared?

Posted on October 1, 2005 by Dustin Luther

[photopress:richard_williams_mining.jpg,thumb,alignright]In response to my post highlighting how great the technology behind Trulia is, I received some emails from real estate agents who completely disagreed with me, although only one agent, John Lockwood , took the initiative to responded on the record). Thank you John! I’m going to pick on your comments in this post only because you had the willingness to state a lot of agent’s fears publicly… With that said, I continue to welcome your feedback!

Hoarding the data? That’s a good one. Have you seen my Sacramento Search Page — to name just one place where I’m not hoarding it? I make my living publishing the data, and I’m licensed to make my living publishing it.

John, I clicked on your search site the other day for the first time, and I felt like I’d seen the site a million times before. The search is bad and does not serve your clients well. Sure you’ve published the homes that are for sale, but you haven’t added anything of value that I couldn’t get from 1000 other real estate sites in Sacramento. You haven’t taken it to the next step and provided anything particularly useful to your potential clients. I’m going to go out on a limb and say that the goal of your search site is to tease your potential clients so that they will call on you to find out whether or not a particular home will work for them. And I don’t blame you for any of this because the coding required to build a more interactive site that would really serve your clients is very tricky. In reality, you are running on a business model that has been very successful and easily replicated all over the country.

I want a real estate search site that provides more useful information? I want recommendations. I want to know if the home is a good value. I want to know if the neighborhood is appropriate for me. You’re website provides none of that… and I’m not a good enough coder myself to implement any of these improvements. I think the search site that you offer lacks so much consumer friendliness, that I don’t even bother putting a link to my version of it on this site’s sidebar. Making interactive websites that improve with user experience is what gets the self-proclaimed web geeks all excited and sure that Trulia represents the first example of real estate entering the next version of the web.

[photopress:polina_vasily_stalin.jpg,full,alignleft]While the times are changing in the real estate industry, I think the majority of people WILL always want some expert advice before buying a home. It is not like buying a plane ticket, and consequently, the internet will not replace real estate agents in the same way it has replace travel agents. A home is simply too big of a purchase for most people to feel comfortable making it over the internet.

Onto another of your points, I wish I could say that I had more respect for a real estate license, but I don’t. (Considering you are from California, you might be interested to know that I’m licensed to practice traffic engineering in your state.) Recently, I decided it might be useful for me to have a real estate license, so I spent $250 and took an on-line course. It was the “60-hour” course that is required before you can take the Washington state exam. It was so easy, I doubt I spent 30 hours in total reading through their material and answering the multiple-choice questions. For comparison, I had to get a four-year degree and spend month’s studying before I was ready to take the all-day traffic engineering test. For me, all a real estate license means is that the person meets a minimal level of competency. It is all too common to find a licensed real estate agent who is simply not knowledgeable enough to do a good job. You have to search much harder to find a licensed lawyer, doctor, or engineer who simply cannot do their job.

Reading through the rest of John’s comments, I only have one general “big picture” comment. Nobody owes real estate agents anything, least of all their clients. That is an important enough comment to repeat in a different form. Home buyers and sellers do not owe real estate agents anything. Maybe it’s just the engineer in me that hates inefficiencies, but if someone else can provide a tool that makes home buyers and sellers better off, it is the real estate agents that need to adapt. Buyers and sellers should not have to adapt to an inefficient system designed by real estate agents for the benefit of real estate agents.

[photopress:hurley_patterson_cousins.jpg,thumb,alignright]So where does this leave us…

It won’t take long for the industry to see some major changes. It may be through Trulia and their opt-in database. It may be from some type of Craigslist on steroids (think Google Classifieds). It may be the product of a dream from Rich Barton or Barry Dillar. Whatever the solution is, it is being created right now and it will provide huge benefits to home buyers and sellers. All this is happening while NAR still has it’s head in the sand and is worrying about whether or not discount brokers can get access to MLS listings…

Does this mean that every real estate agent is going to be out of a job in a year? No way! There are still so many people that require the expert handholding of a well-informed agent. However, it does bring up some interesting questions for real estate agents who rely on the internet to get clients:

Are you preparing for a time when everyone will have access to better information? How? Are you just planning to fight these changes? Most importantly, do you have a web strategy to take advantage of these changes?

Trulia better real estate search

Posted on September 28, 2005 by Dustin Luther

Just as the pun is obvious, the implementation by Pete Flint and his crew at RealWide of a new real estate search engine is obviously awesome… Their new real estate search engine available and can be found at: Trulia.com

If you’ve been reading my posts for a while, then you know I’ve been following the development of new mapping technologies pretty darn closely and this is far-and-away the best implementation yet. Pete and his crew didn’t take anything for granted and put together a whole new real estate search engine! I mentioned that this site was coming out a few weeks ago, and the implementation lives up to everything Pete told me it would be.

So here’s some features I ~~like~~ love:

The search interface is as simple as entering a city name or a zip code! The UI is beautiful.
The filtering by other features like Price, Bedrooms, Bathrooms and Price is fast and very intuitive!
When click on more detail for a listing, you get the VERY useful information like the price per square foot, the days on the market, as well as details for other recently sold homes and similar homes in the area!
The color coded recently sold homes is awesome!
I really like the the location of your search is stored in the url. This allows me to easily save and or send an area of interest. For example, here are the homes for sale in the part of Los Angeles where I grew up: http://www.trulia.com/CA/Eagle_Rock/90041/. (Also notice that it has neighborhood facts on this page.)
It has RSS feeds so that I can subscribe to my zip code and be updated each time a listing comes on the market.
And the best part is that I’m sure there’s more I’m going to like, but I’ve only had a few minutes to play!

I really liked the site when I first saw it, but the more I play the more my opinion of the site improves. The best part is that I’m pretty darn sure that if I keep playing with the site, I’m going to find more gems! This site is a true work of art! Thank you Pete!

The only problem I see with it is that it is not available for Seattle (yet!). THIS IS A HUGE DRAWBACK. I want Trulia! And Pete, I’ll wait for a little while, but I’m not a very patient person! 🙂

UPDATE: I just got an email from Pete and he says “You’ll be pleased to hear our primary focus is building out coverage to other states. No promises when Seattle is live, but we’re working hard on it.” I’ll try to be patient!

More In-depth Sale Price vs List Price Analysis

Posted on September 28, 2005 by Dustin Luther

If you were following the comments from my post from yesterday, I said I would follow up with another stab at diving into how the sales prices versus listing price changes over time. Seeing as how it is already getting late (and I’m tired!), I’m going to stop trying to make sense out of the numbers and present what I’ve found so far.

However, before I go any further, I’m going to rant at my fellow real estate agents! For the sake of all of us who actually care about data, please learn to double check your work before submitting listing information to the MLS! I spent more time cleaning up the database due to lazy real estate agents then I did actually creating the charts! Here are some things to look out for (but this list is by no means exhaustive): (1) Spelling: Fremont is spelled with only one “e”, (2) Location: South Lake Union is not a neighborhood located within Ballard and (3)Price: your home that sold for $345,000 probably should not have been listed for $34,500,000.

With that rant out of the way, I thought I would also mention that I’m not the only one surprised by housing numbers today… Hot Property had an article where Amey Stone says reading NAR’s press releases on sales levels “is starting to be a bit of a yawn — sales weren’t quite at record levels, but darn near close to it.” Unless you get tickled by trends and statistics, expect to sleep through the rest of this post…

When I look at the entire Ballard Area as defined by the MLS (this is a huge area that includes places like Greenlake, Blue Ridge, Wallingford, Fremont, Sunset Hill etc). We see the same seasonal trends over the past two years that I identified yesterday. But when we go back another season, the trend becomes much less pronounced.

Here are the things I found most interesting about the chart:

The seasonal variation is much less pronounced in previous years
There has been a steady trend up wards where the sale price is greater than the listing price
In terms of trends, it didn’t really matter whether I used the original list price or the adjusted list price.
The huge drop in 08/03 is due to some homes in Broadview that were listed way to high!

My speculation is that the patterns identified the above chart have a lot to do with evolving sales tactics by agents. It seems like it has become more and more common for agents to list a home below the value that they think it will sell for… This does two things: (1) It assures a quick sale and therefore a quick commission for the agent. (2) It has the potential to bring in more buyers and thereby raise the final sale price of the home.

When I went to analyze the data at a more local level, things got much messier… Rather than seeing clear seasonal patterns as I did in Loyal Heights, things simply got fuzzy. They got so fuzzy that I’m hesitant to even provide the next chart because it simply looks like an ugly mess…

My goal in creating the chart was to see if the same trend that held up in my analysis yesterday for Loyal Heights, would hold up for other neighborhoods. As the chart above demonstrates, it roughly holds up for all of Ballard, but as the chart below demonstrates, it does not hold up at the neighborhood level. I’ve done enough regression analysis for transportation planning studies to know that a chart like this is going to give meaningless trends.

By the way, if you’re interested in the raw data that I used to create these statistics, just email me, and I can send you the Excel file that has all the wonderful (?) pivot tables and charts I used in creating this post.

Also, please feel free to comment on other ideas you might have for exploring the wealth of information that is locked up behind the MLS database. Anna has the key that opens that door! 🙂

Real Estate Geekiness…

Posted on September 27, 2005 by Dustin Luther

Tonight, I’ve been playing engaging the inner real estate geekiness along the likes of Tom Dozier’s Seattle Property News blog… I’ve been following (from a distance) Tom’s “Home Tracking” posts and not exactly sure where he was going until today. When he said “since one of the signs of the strength of a market is whether high demand is causing people to bid prices above the original amount the seller seeks,” I decided to test out his theory with a larger sample size…

So here is my method. I took all the homes that sold in my neighborhood (Loyal Heights) over the past year and calculated the “Net (Sale minus List Price) as a Percent of List Price”, or this calculation:

~~(Average Sale Price – Average List Price)/Average List Price~~
Average((Sale Price – List Price)/List Price)

The result is summarized in this chart:

(Click on the chart to see a larger version!)

The first thing I found interesting is the extent to which the “Gross Net as a Percent of List Price” varied seasonally… For two years running the % of List Price bottomed out around Feb/Mar and then quickly picked up to peak around May (with homes selling for 4% and 8% over the list price!). Note that February (the bottom) is also when the number of sales bottomed out over both of the last two years.

For reference, there were 182 homes sold between October ’03 and August ’04 in Loyal Heights with the average home selling for 1.2% over asking price. (I threw out September 03 and September ’05 data since I only downloaded data for the partial months…)

My conclusion is that Tom is wasting his time if he expect to see the health of the market by looking at whether or not homes are selling above or below the market price. As my chart demonstrates, there is way too much seasonal variation for a one or two home snapshot to be valuable. Even in the last two years where the value of homes in my neighborhood have consistently risen (quite substantially), there have been long periods (up to six months) where the average home has sold for less than the asking price. However, with that said, I want to say thanks to Tom for raising this intersting issue because you’ve given me an opportunity to learn about (and demonstrate) the huge seasonal variation in the local market!

I welcome anyones comments on my method if you have ideas on improving things (including the obvious improvement of adding more neighborhoods).

Update: I realized this morning in the shower that I was calculating the net (sale price minus list price) as a percent of list price, so I’ve corrected the text in the post (but not the chart!).

With a little help from Flexcar

Posted on September 26, 2005 by Dustin Luther

With gas prices seeming to rise on a daily basis it seems like a good time to mention a little bit about Flexcar.

The Seattle Times describes the idea behind the organization pretty well in this article: Fueled by Flexcar. In short, Flexcar provides cars at specified locations throughout the City of Seattle and the Eastside that members can rent by the hour. For people who don’t drive a lot, these cars could provide their sole form of auto transportation. For the rest of us who need at least one car in the house, we can use these cars as our “second” or “backup” cars.

If you are a Seattle resident and you are seriously considering getting rid of a car, then consider taking the One Less Car challenge. It is a program where the City offers some pretty substantial rewards to families willing to give up at least one of their cars!

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