The Online Real Estate Boom

The offline real estate boom may be slowing, but the online boom continues, as a John Cook survey piece in today’s Seattle P-I demonstrates in passing by mentioning many of the companies, from Redfin, to iGenHome, to Zillow. Most of ‘em are seemingly map-centric Google mashup-ish things, which is nice, but not particularly exciting — especially when the buyer side of the market is slowing down.

One interesting real estate startup exception of which I recently became aware is Altos Research. While the company has not yet officially launched anything, you can get a sense of its plans by scanning the company’s blog. Some intriguing stuff.

Related posts:

  1. Real Estate: The End is Nigh(-er)
  2. Announcing the IG Real Estate BubbleWire
  3. California’s Real Estate Glut — in Agents
  4. Best/Worst Real Estate Broker in California
  5. Is “Rich Real Estate Broker” an Oxymoron?

Comments

  1. Niki Scevak says:

    Paul, enjoy your blog and am a long time listener, first time caller of sorts.
    A company I founded, Homethinking.com, launched over the weekend on the sell-side of real estate, which I’d hopefully-not-too-selfishly add to the mix.
    Homethinking is an online service that helps home owners choose the most remarkable neighborhood realtors to sell their house. We measure performance by monitoring real estate transactions to know which houses each realtor has sold, for how much and how long on average it took them to do so. There are also user reviews by home owners who have sold their house with the particular realtor that helps determine the rank of them.

  2. Don Riley says:

    Cable companies are quickly getting into the real-estate advertising market as well. Comcast now has on-demand lisitings that contain individual home showings (only for limited number of high priced properties currently). It seems much easier to look at homes this way , as both a husband and wife can sit on the couch and look at perspective properties on the big scrren as opposed to surfing the web (often individually) on a 17″ inch screen. You can see where this is going. Just another reason not to buy newpaper stocks !!!

  3. Jessie B says:

    Great post Paul. Reviewed the Altos Research and they present some very interesting data, which may help support my thoughts of the future of real estate. It seems that in the near future there will be two types of real estate models that will emerge due to cooling markets and current pressures on commission structures. I believe the high touch, high cost (5-7%) real estate agency ala Nordstrom and the low touch, low cost, ala Costco. The current model of independent contractors who sell 6-10 homes (making most of the commission) a year working for a large franchise will be forced out from both ends because they don’t have the funds or backing required to roll out technology like igenhome, zillow, homepages, etc because they are too busy trying to earn a living. They will also be forced out of the low end as recent stats indicate the average REALTOR earned $38-40K a year based on the current commission structure of 5-6%. If commissions continue to drop due to price competition, say by 30% (which would make average RE commissions 3.5-4.5%, which is not out of the question) then the average real estate agent cannot “afford” to be in business. This divergence has happened in all other types businesses (consumer goods, supermarkets, hardware stores, etc) and consumers have become accustomed to each model. They now demand better, faster cheaper service or faster, better, more “professional” service, which the current real estate models have difficulty providing. I think you will see leaps and bounds made on “for sale by owner” models as well as “full service” models who will bring the full data, 24 hour accessibility, online transaction management etc. We all know that there is alot of money focusing on the 61 billion dollar nugget… it’s just a matter of time.

  4. zack w. handley says:

    A huge de-aggregation is about happen as soon as the MLS is freed for the common man. I think, RE sales commissions will probably drop to 1% on each side (2% total) because of this democratization of data. What does the typical agent do anyway??? Forward, the MLS???
    There is a huge opportunity and it will be fleshed out by tech companies and not Realtors.