I wanted to have a compelling title for a little experiment I recently did with my listing at 206 Palmita Place in Downtown Mountain View. It’s a newer construction home and I thought the location and price would appeal to couples or small families. Based on that demographic, I assumed more people would be searching for homes online, so I built a custom website for the house, and posted links to it on a number of real estate websites in addition to the ones like mlslistings.com that link to data on the MLS.

I also followed conventional wisdom and ran ads in the Palo Alto Weekly and Mountain View Voice newspapers, and an entry in the Open Homes Section of the San Jose Mercury News.

I then did some informal polling at the various open houses, asking visitors where they found out about the open house, leaving it as an open ended question. I also tracked hits to the website and looked at who the referring domains were. I found the results interesting and surprising.

Where did they come from?

Over the course of 4 days of open houses (Thurs and Fri evenings, Sat and Sun afternoons) we had 135 groups of visitors through. Of these, only 2 said they came based on the ad in the MV Voice, 1 from the Palo Alto Weekly and 1 from the SJ Merc. Another 11 groups had seen the open house directional signs (I blanketed the neighborhood) or the For Sale sign in the yard as they were passing by. That’s 14 out of 135 groups, or about 11%. The other 89% of visitors either found the listing online or were referred by their agents.

Online sources

I also tracked where hits to the website came from. There were over 2200 hits to the website, and initially 70% of those came from Movoto which is an online real estate information / referral site. After the first two days, mlslistings.com caught up, and after the first week was the source of about 70% of the hits. The house went under contract after a week, so I stopped tracking then.

While I admit that I am biased, I have had a theory for a while that newspaper ads for listings, especially in Palo Alto and surrounding communities, are more for advertising the agent and getting him or her more clients than getting potential Buyers into your home.

The National Association of Realtors estimates that 74% of home buyers begin their search for a home online, and the estimate for Silicon Valley is 92%. I’m still running an ad for my new listing in Redwood City, but it is only 1/4 page and that is because the sellers believe that potential buyers read the paper. I am also flooding the internet with placements and links, and I’m trying an experiment by posting the home on Zillow as well. It’s another experiment, and I’m partially doing it to get under Kevin’s skin as Zillow is a hot-button for him.

I’m tracking the marketing response on the Redwood City house as well, and I’ll do a post on the results from that when it goes under contract. In the meantime, I welcome your comments and hope for a bit of banter on online vs. print marketing.

Thanks for reading.

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Tags: 94041, Advertising, Alternative business models, bay-area-real-estate, Business of real estate, California Association of Realtors, Demographics, Fun with Zillow, Home buying, Home selling, Keller Williams, Movoto, Online-real-estate-advertising, Real estate, Real-estate-advertising, Redwood City, San Jose Mercury, Technology, Zillow

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My previous post on what impact the recent stock market fall might have on the Palo Alto real estate market generated some interest and questions. Friend and reader Greg asked about the (apparently) surprisingly high percentage — 25% — of Chinese buyers in the Palo Alto real estate market, a fair question considering the premise of my article, namely, that the Chinese stock market could have an effect on Palo Alto home prices. He also asked about what the percentage of home owners might be of Indian descent.
Mea culpa; in my previous life, I was taught better: don’t just throw out numbers, but document their source. The 25% is an estimate that’s been floating around our industry, provided by one of the title companies; I’m not sure which one.

Is that number right? I decided to go straight to the source — county records — and do a quick, random, and admittedly unscientific search. I downloaded 1000 Palo Alto home records (yes, I’m one of those people who does things like that) and skimmed through the first 300, noting whether the owner was likely Chinese, Indian, or other.

The results? Not exactly 25%, but definitely in the ball park: 18% Chinese, 3% Indian, and 79% other (including 3 lonely fellow Dutch families like mine!)

18% obviously ain’t 25%, but it’s certainly in the right ballpark, and I’d say it certainly passes the initial back-of-the-envelope consulting sniff test, if I may mix metaphors.
My study wasn’t particularly scientific: all 1000 records were centered around one home (because that’s how my county data provider gives the data) and I didn’t filter by date. A more rigorous look at the numbers would have chosen only recent home transactions — say, in the last two years — and would have chosen homes at random throughout Palo Alto. It’s possible, for instance, that the neighborhood from which I drew the homes has a higher or lower percentage than average. I suspect the 18% is a fairly accurate number for Palo Alto as a whole, but that the percentage of recent home buyers who are Chinese is higher.

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Tags: Demographics, Palo Alto, Real estate

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