Real estate sites are redefining the property business with property listing, realtor directory, mortgage calculator, financial advice and neighborhood info all at the click of a button. According to National Association of Realtors, the percentage of potential U.S. home buyers using the internet as part of their housing search process rose from 2% in 1995 to 77% in 2005 to over 80% in 2006.
It is a business that primarily belonged to the newspaper industry before, but has since shifted over to the Internet in a massive way.
According to comScore, total Internet audience for real estate web sites grew by 15% from 34.79 million unique visitors in January 2006 to 39.85 million unique visitors in January 2007. The top players are Realtor, RealtyTrac, Homegain, Apartments, Rent, Zillow and ZipRealty. Hitwise, estimates that the top-10 real estate sites accounted for 30 percent of visits to all web sites in the real estate category in February 2007.
We have been reviewing the online real estate industry and have covered ZipRealty, Zillow and Move from the Web 3.0 perspective. Oodle, Trulia, Loopnet are some of the up and coming real estate sites.
The Context for real estate sites is to allow users to search, buy, sell or rent properties, seek assistance for moving in or read advice on home finance or relocation. There are niche spaces like Loopnet and MyNextDeal, which are very good online marketplace dedicated to commercial property. Again, Roomster focuses on room sharing. Move has a separate section for aged buyers. The section contains special features and articles on home selection, finance, mortgage rates, health care tips for senior citizens. The real estate sites have got their context right.
Most real estate sites are rich in Content, furnishing information on home or rental listings, local realtor or lenders directory, property details, neighborhood, etc. These real estate sites have very good tools to aid users in deciding on their dream home and make the right property decision. While Zillow contains more than 70 million home listings in its database, Move offers detailed information on individual homes with full coverage on essential amenities like garage, alarm system, air conditioning, nearby clubs, colleges, local community, and neighborhood.
Tools like Mortgage Calculator helps users calculate estimated monthly mortgage payments, tax savings and compare ARM loans and traditional loans. Again, ZipRealty’s Price Reduction Index monitors housing trends across 18 markets in the US giving monthly increase or decrease in housing purchases. A Make Me Move tool in Zillow enable home owners to set a price for properties that they would like to sell without actually putting it in the market.
Community features on most real estate sites are weak and needs a lot of work. Some sites have business blogs, information posting, question-answer forums, etc. Trulia Voices is by far the best community that I have come across. Move also has decent community features. But a lot more is desired in today’s community driven online world.
Personalization is under utilized in most real estate sites. Registered users receive e-mail alerts for preferred home listings and latest updates on property price, market trends and new features. They allow users to save searched homes, create their own resources, comparables lists, etc. but nothing great, which leaves scope for improvement. The best, ofcourse, is ZipRealty’s personal agent service.
Vertical Search is good on most real estate sites. Sites like Realtor or Zillow allow users to search home by zip code, city, property type, family, square footage, lot size, bedroom, and bathroom and finance options. Move, on the other hand allows you to look for pet friendly condos or check for high-speed Internet connection or concierge service in corporate housing apartments.
Real Estate sites earn most of their revenues through commission fees charged on transactions done through them or by allowing users dedicated access to high-quality databases, information and tools through subscriptions. But a few sites like Zillow are out to change the battleground as they are providing property listing and transactions free of cost and their business model is built on ad revenues and value added services like uLocate a mobile service for which it charges $2.99 / month. This model, however, is unproven as of now.
Real Estate ad spending on the Internet is steadily growing and as the chart below shows, is projected to account for almost one-third (32.1%) of total real estate advertising revenues. Sites like Loopnet have come up with newer ad model that draws money from premium member subscription. Again, Zillow’s EZ Ads is aimed at targeted advertising where the advertisers can target their campaigns by zip codes specifying the number of views.
Real estate industry may be going through a downturn but there are no signs of real estate sites cooling down.
Also, real estate agents have slowly started utilizing these sites and VCs have started taking interest in the real estate vertical. Zillow has raised $57 million in venture capital from Benchmark Capital and Technology Crossover Ventures. There have been talks of Google testing a real estate search engine site.
With newer players like Trulia, Loopnet, edgeio and Oodle, the online real estate industry is fast becoming a popular vertical and replacing newspaper sites as the source of classified property content. The New York Times Co. has recently launched two sites targeting luxury home listings.
Clearly, the online real estate industry is maturing and what needs to be seen is how these sites are about to integrate Web 3.0 and establish newer business models.
This segment is a part in the series : Web 3.0 and Real Estate