The ongoing Active Rain vs. Move.com dustup, our very own ongoing soap opera saga, illustrates one fact above all else: the re.net is maturing. As the traditional players in real estate (finally) begin to appreciate the potential of emerging technology in real estate, it’s inevitable that more acquisitions will take place — hopefully successfully.

Move.com’s overtures to Active Rain were actually not the first in which a traditional player courted one of the new ones. That honor, I believe, rests with our very own Joel Burslem of FOREM, which was acquired by Inman a number of months ago.

Some other possible pairings? Google must be looking with interest at both Zillow and Trulia. Inman, Ris Media, and other real estate industry news sources may be eyeing some re.net blogs.

And who knows…maybe the Bloodhound will make a play for one of the other Phoenix re.net blogs? Or perhaps these guys might be interested in this one?

[Read more →]

After a wonderfully fun — and occasionally frustrating — evening of hacking around, I’m please to present this mashup of Bay Area housing price trends. The graphs are from our friends at Altos Research, and the Google Maps were created using Zeemaps from Zeesource.

For a larger map, click here.

[Read more →]

I've been waiting for the right opportunity to really push the envelope of online real estate marketing, and, well, it's here!

I'm working on a listing in San Francisco's Potrero Hill neighborhood that fits perfectly into this new online marketing world:  it's slick, chic, and contemporary, will likely attract a younger and web-savvy crowd of buyers, and the sellers simply love the idea of creating a buzz online.

We're passing on the normal full-color ads in traditional local media like the San Francisco Chronicle, the San Jose Mercury News, and we'll be spending that money online instead.  To hedge our bets, we will be placing open house display ads in print media.

I'll be collaborating with several real estate online marketing companies to promote this property.  They'll be showing me — and, by extension, my readers — how to get the full benefit of their products.  I intend to chronicle our adventures here and invite you to follow along.  If you have some ideas, feel free to join in!

I'll announce the first collaborator tomorrow.

In the meantime, as part of our adventures, let's see how high this site currently ranks for the search, "San Francisco Potrero Hill Real Estate" — I suspect it won't be that good, since I've never written about Potrero Hill before!

Sure enough, on Google, Yahoo, and MSN, I'm nowhere to be found, not even in the top 100. 

Google: 

Yahoo: 

MSN:

[Read more →]

Let’s continue the saga of Bob and Betty, our hypothetical first-time home buyers who were introduced in the first of a series of articles I’ll be writing.

We met at 9am sharp on Saturday morning at my broker’s office in downtown Palo Alto. Though it’s easier to view homes with clients during open house times, I prefer to do first time tours when nobody else is around.

I had an ambitious tour planned: 12 homes in 4 towns along the 101 corridor. Always exhausting for everybody involved — every time I do this I have more liking for the part of the Redfin business model where clients do this bit themselves! — but nonetheless an important part of the whole process.

While driving, I pointed out important things about the neighborhoods we were in: The typical types of homes, the price ranges, which school district it belonged to, whether it was unincorporated or not, whether it was in a flood zone, where the nearest parks and public services were. I asked them to comment on what they liked and didn’t like in each neighborhood.

At each home we went through the same process, slowly at the first couple of homes, and then more quickly. “What did you like? What did you not like? What did you think of that kitchen? Do you like skylights? Fireplaces?”

By the 5th home I’m usually able to “get it” about what clients are looking for, and with this new knowledge, I crossed out 3 of the remaining 7 homes we had to see.

Suitably tired, we pulled back up to the office around 1pm to review what we had seen, what they had liked, and what they had not liked. I explained the next bit of the process: getting pre-approved. I’m happy to spend a few hours as a sort of “interview” with prospective buying clients, but before I invest too much more, I need them to put some skin in the game too by getting pre-approved. I generally find that if they’re not ready to dig up their financial records and go talk to a mortgage broker, then most likely they’re not ready quite yet to buy a home.

Betty was quite excited about three of the homes we had seen, but it was clear that Bob was losing interest pretty quickly. “Yeah…but nine hundred thousand dollars?” was his most common refrain.

We pressed in on that. Bob had been doing his homework the last week and pulled out all the discouraging figures he had found. Housing starts are down. Interest rates are up. Affordability is down. Condo developments in Las Vegas and Miami are being cancelled. How in the world could prices stay where they are here?

Prices in the Bay Area are indeed a pretty head-scratching discussion topic as they continue to defy gravity, pessimism, and seemingly the laws of economics year after year. I told them bluntly that neither I nor anybody else could guarantee anything about prices here. It is indeed possible that prices could collapse…by 40%…overnight…immediately after they bought a place. Possible? Yes. Probable? No.

I pulled up my secret weapon, Google Earth, on the flat screen wall monitor in the conference room. I zoomed in on the Peninsula and asked two questions: 1) How much land is technically available to build on? 2) How much land is actually available to build on.

The answer to the first question is: tons! From the Bay going west pretty much to Highway 280, nearly every square inch of land is already filled in. From the 280 west to the ocean, there are only a smattering of towns, like Half Moon Bay, Pescadero, and La Honda. The mountains make it difficult to build in that area, but we could certainly fit several hundred thousand more homes there.

However…it ain’t gonna happen! Most of that land is owned and/or protected by Federal, State, County, or City governments, private trusts, conservatorships, parks, and so forth, and not much building is going on.

If you can’t go West, then you have to use the Manhattan strategy: go up. Again, that ain’t gonna happen. San Francisco and San Jose have modest but growing skylines of high-rise buildings, but in between it’s rare to find any structure taller than 8 or 10 stories, and for the most part it’s only up to 3 stories tall. Those zoning restrictions aren’t going to be changing any time soon.

Essentially, 50% of the classic economic supply/demand equation is pretty much fixed, so the real question is what will happen with demand?

Again, at least for the short and medium term, the answer to that is pretty clear: demand is, and will likely remain, robust. Google and other local tech companies are doing well. Venture capitalists are pulling out their wallets again. Start-up nirvana 2.0 is here. Immigrants from across the country, and indeed the whole world, continue to move here.

So, could prices fall by 40% overnight?  Absolutely! But in the only scenario I can come up with in which that happens — a scenario which involves an earthquake, a terrorist attack, and bankruptcies of the top 5 tech employers in the area…all within 3 months of eachother — falling equity may not even make the top 10 list of concerns for many people.

We parted company, and they promised to get back to me within a few days about whether they were ready to proceed. I had my doubts, mostly about Bob.

Sure enough, a few days later I got a phone call from him. “We’ve decided to wait it out,” he said. “We’re just a bit nervous about these prices, and we’re not in a big hurry to buy.”

We agreed to keep in touch every few weeks and see how things developed.
Welcome to real estate in the Bay Area.  Prices are high, and you need a certain amount of faith and intestinal fortitude to dive in for the first time.

[Read more →]

This just in from the “Google Adwords” crazy advertising department…

Do a search on Google for the phrase “Redfin Reality” and the only sponsored link you get is this one:

“The site Realtors don’t want you to see?”  Now that’s a way to spread the love…

Glenn Kelman has just got to stop the complaining about the attitude of traditional agents towards Redfin as long as they’re doing this sort of thing.  He can either

a) Position himself as being against the traditional industry
or
b) Expect the traditional industry to embrace him with open arms
…but not both.

Mind you, I don’t think there’s anything wrong with the ad.  In fact, I think it’s pretty clever, actually, and a great way to hook in the type of client Redfin wants, namely those who don’t have much good to say about the traditional industry.  But it’s pretty disingenuous for Redfin to complain to complain about not being loved while simultaneously being somewhat, um, hostile itself.

[Read more →]

Ok, class, today’s quiz has two true/false questions. No copying!

1. Zillow is like Cyberhomes
2. Zillow is like NBC

Time’s up…here are the answers:

So, how’d you do?

Much of the criticism of Zillow centers on the fact that its estimates are not the last word in accuracy, and in many cases can be far off. If Zillow were, in fact, strictly a home valuation site a la Fidelity’s Cyberhomes, that would be a pretty damning indictment. Zillow’s only hope would be to consistently have the best, most accurate estimates in the business, and Cyberhomes would arguably have a better platform to achieve that, since its affiliation with Fidelity gives it access to more data, more accurate data, and more timely data.

These criticisms are valid, but they simultaneously miss both a relatively minor and a crucial point, both of which can be illustrated by another analogy, this one between Zillow and Google, arguably the best known online media company.

1. 100% accuracy simply isn’t possible: When you type in a search on Google for, say, “Radish recipes,” what you typically get is a “good enough” set of search results to help you find the content you want. It’s an amazing testament to the brilliance of Google’s search algorithm engineers how often within the first page of results you find what you’re looking for. Sometimes, however, the answer isn’t on the first page…or the second or the third…or it simply isn’t found on Google. Somewhere out there on the Internet is the answer, but Google hasn’t found it or classified it or interpreted it correctly for your particular needs. A computer algorithm, however sophisticated, simply can’t always give the right or best answer. Similarly with Zillow, what you often get is a “good enough” estimate. The home’s true value might be $400,000, but Zillow might say $370,000 or $440,000. For many purposes, that’s a “good enough” answer for people to keep coming back, and when they need a more accurate answer — say, they’re planning on selling their home — they bring in an appraiser or a Realtor to give a more accurate estimate. As with Google’s search, sometimes the Zillow answer is way off. As frustrating as that is, it’s just the nature of the beast: A computer algorithm, however sophisticated, simply can’t always give the right or best answer…no matter how smart the engineers, no matter how many data points, no matter how powerful the computer.
2. Successful media companies are all about content and entertainment Google monetizes its search pages by selling relevant ads — just like NBC monetizes Saturday Night Live by selling ads. Google’s “content”, its “entertainment” is the search result and experience.Zillow’s content is all real-estate focussed. During its first season, there were two shows: “Home Value Estimates” and “Sales Prices and Details of Neighboring Homes.” We’ve just entered the second season with the release of a few more shows: “Make Me Move”, “Homes for Sale”, and “Real Estate Wiki.” Just like NBC, some of Zillow’s shows will be hits, and some will be flops. With any enough hits, Zillow will become successful.Don’t get hung up on the fact that Zillow’s “Home Value Estimates” show has inaccuracies in it. These estimates will improve, but they will never be 100% accurate, not only because they can’t be, but because what Zillow is providing is real estate entertainment, not the be-all and end-all of real estate valuation.

[Read more →]

I stepped out for an hour….I came back…and the world, or at least my little piece of it, had changed, courtesy of Zillow’s upcoming product release.

Quoting Drew Meyer (Zillow PR), the new product release includes three components:

1. Agents and owners can post homes for sales–for FREE.
2. Added a real estate wiki that is seeded with over 100 articles–and opening it up to the community for improvement & expansion
3. Make Me Move–now ANYONE can set a “dream” price for their home

Of my four predictions, only one turns out to be correct: community commentary, which is at least part of what the wiki concept seems to be. (Note to self: Keep remaining three predictions on file — maybe they’ll be part of Zillow’s next release!)

Thinking as a traditional Realtor, my thoughts on the three components above are, respectively:
Oh #!^%
Huh???
Huh? again.

Putting on my consumer hat:
Brilliant
Brilliant
Brilliant

And now my Web 2.0 Realtor hat:
Brilliant (if I do it right)
Absolutely brilliant
Brilliant again.

1. Agents and owners can post homes for sales [sic] for FREE.

Traditional Realtor: “Damn them! First they stole our data, now they’re pulling the MLS rug out from under us, next they’re going to start selling us leads or doing the transaction themselves. I will never — never — advertise there, and I’ll take every opportunity I can to bad-mouth them.”

Consumer: “Very, very, very cool. I love how I can get quick-and-dirty estimates of my home’s value. I should let my neighbor John know about this new feature — he’s having a hard time selling his home, and his Realtor should definitely advertise the home on Zillow. I mean, it’s free, so why not? And Joe down the street, who’s also selling his home (but on his own without a Realtor) should also know about this.”

Web 2.0 Realtor: “Gotta play this right, but this could be big. I’m already advertising my listings on Craigslist, Google Base, and Trulia; I definitely need to add Zillow to the list and stop wasting my money on enhanced listings on Realtor.com. In neighborhoods I’m trying to break into, I definitely need to start buying some banner ads. If this is where my potential clients are hanging out online, I need to be there too. But…gotta be careful. If the Zestimate for this home is below where I’ve listed it, not sure Zillow is the best place to advertise it. Oh, and here’s another idea: I’ll buy ads in the neighborhoods in which my buyer clients want to move — an easy way of letting the FSBO’ers in that neighborhood know to call me since I may have a client for them.”

2. Added a real estate wiki that is seeded with over 100 articles–and opening it up to the community for improvement & expansion.

Traditional Realtor: “Wiki?”

Consumer: “Nice, very nice. I love Wikipedia, but I can’t always find the really local real estate information I’m looking for. What’s the market been doing in Barron Park lately? How many offers are typically coming in on homes in Palo Alto these days? Hmmm…looks like this 3oceans guy Kevin has some of the answers I’m looking for…maybe I’ll shoot him an email.”

Web 2.0 Realtor: “Not 100% certain how to play this, but hey, I’ve got all kinds of content on my blog that I can re-purpose into some interesting Wiki-type content, and this could get me some publicity — help me get known as the local expert on Eichler homes, or on the Fair Oaks neighborhood. Realbird just started something similar at Realki.com — maybe I’ll split my efforts between the two sites and see which gives me better results.”

3. Make Me Move–now ANYONE can set a “dream” price for their home.

Traditional Realtor: “Yeah, right. Now anybody with a crap Eichler worth $850,000 is gonna put it out there at $1,100,000 and cross their fingers. If it’s my listing, they’ll probably expect me to advertise it in the paper at that price, too, and waste months of my time and thousands of my dollars while they come to their senses.”

Consumer: “It’s a bit gimmicky, but also kind of entertaining. I know my home is only worth $800,000, but you know what? If somebody really wanted to offer me $900,000, I’d sell it in a heartbeat! Can’t hurt — I mean, it takes 2 minutes of my time to do it, right?”

Web 2.0 Realtor: “Gotta watch these numbers like a hawk. If there’s a home with an unreasonably low Zestimate, and a “Make Me Move” price above that, but below what I think market value is…that could be tasty. If there’s a home with a “Make Me Move” price above market value, but not too much so, might be worth contacting that homeowner and explaining my services.”

Now…time to head to the other blogs and see what their reaction has been…

Update: (12:41am PST, Thursday, December 7, 2006) — About an hour ago, Zillow President Lloyd Frink posted the announcement. Zillow’s site itself, however, is still not back on.

Update 2:  (9 minutes later)  — Zillow’s David G, in his inaugural post on Active Rain, addresses one of Web 2.0 Realtor’s above issues.  Apparently if a home is listed for sale on Zillow, the price that will appear is its list price, not its Zestimate.

[Read more →]

I’m constantly coming across nifty blog-worthy items on the Internet.  Typically I keep track of them by leaving them in an active Firefox tab:

That works fine up until about a dozen…but then what?

Enter a new product from Google:  the notebook.  You install a little widget, and voila!  A new option appears on your right-click menu:  Note this (Google Notebook).  From there, you can drag topics where they belong, comment on them, delete them.

[Read more →]

Patrick Kitano’s recent post on the Internet and outsourcing got me thinking about a pretty neat kind of outsourcing — the kind where you pass off some of your work to your clients, sometimes without compensation.
Client outsourcing is one of the drivers behind the Internet’s cost efficiencies. If a consumer can download copies of old checks from a bank’s web site, that means the bank no longer needs a department of people to follow up on requests for dated checks. It’s not that nobody is doing this job any more; it’s that the client is doing it instead of internal staff, and the client isn’t really being compensated for it either, especially when you consider how much bank fees have increased over the last decade.

Google does some very creative client outsourcing:

• Google Image Labeler: This is an entertaining, nearly addictive game, masking its real purpose, which is to provide labels for the millions of images Google has in its archive. Rather than spend millions on technology to scan the images and label them (technology which may not even be completely possible with what we have today), rather than hire several hundred new folks whose sole (and boring) job it would be to write labels — Google has simply outsourced that job to its clients! Pretty neat.
• Google search: While nobody outside the company knows Google’s secret sauce for ranking pages and relevance, we all know that part of it is analyzing incoming links. The legitimate (non-link-farm) links are generated by millions of real, live people who essentially “vote” on how good a particular page is by linking to it. Again, Google’s users are doing part of its job.

What does all this have to do with real estate? Quite a bit, actually — one of the growing current trends in real estate is client outsourcing. In the bad old days of data exclusivity, Realtors took clients around to see properties. Though that still happens a tremendous amount, there are a growing number of home buyers who take themselves out to view properties, thank you very much. Redfin didn’t invent this model, but they certainly have made a big splash about it, and they compensate their clients for doing some of the work by giving them back part of the commission.

[Read more →]

Just alerted to this on Om Malik’s blog — Google just bought Jotspot.  The obvious name for this new entity?  Take a guess…

With that out of the way…what in the world is Jotspot anyway?  It’s a neat little Web 2.0 hosted wiki application.  What does that mean, and why should that interest somebody in the world of real estate?

A “wiki” is simply an online collaborative application.  The most well-known is arguably Wikipedia, the public-contribution encyclopedia.  Other “wikis” include spreadsheets and maps which have the ability to be used collaboratively.

Some clients of mine clued me in to Jotspot earlier this year, and we found it a pretty effective tool for collaborating on the real estate search process.  I would upload information about the properties I had previewed for them, and they could see the comments I’d made, add their own, and ask questions.  “Did that one have a nice water view?  Did the kitchen in that home have the countertop style we prefer?”  The information was viewable as a spreadsheet, in map format (which homes have we looked at in this neighborhood?), and as a calendar (which homes did we see last weekend?)

[Read more →]