The Real Estate Dot Com Bubble?

from the timing-is-everything dept

Just as it’s become clear that the housing bubble of the last couple of years may finally be in decline, has anyone noticed a glut of real estate related dot coms? The latest to hit the scene is Zillow, which tries to accurately predict the value of your home. It seems like a fairly narrow area to focus on (and it’s a bit surprising to see them have 75 employees already). The article suggests that their business model is to sell ads, but it seems like they’d need to sell an awful lot of advertising to make this worthwhile — and seeing the reaction of some real estate agents in the article (who seem to think only they can accurately determine a home’s value), this may be an uphill battle. However, it seems like we’ve been hearing about an awful lot of real estate related dot coms lately — each targeting a different slice of a market that was booming last year. If someone came along and strung all these different offerings together, maybe there’d be a real business, instead of a collection of random (and sometimes interesting) features.


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Comments on “The Real Estate Dot Com Bubble?”

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43 Comments
Christopher Pride (user link) says:

There are soo many of these

This is a warning to never invest in a real estate site. I am a Realtor and there are hundreds of these companies. Most of them are trying to gather buyers, only to “sell” them to real estate agents. Your agent is then forced to pay a portion of their paycheck to this company who did no service for you other than forward your name and number off to an agent you could have just as easily contacted yourself.

I dont know a single agent who uses these sites and we can safely assume the vast majority will decline as they realize that it’s not that easy to gain a foothold in this market.

The Real Estate Chick says:

Re: Re: There are soo many of these

Every experience is individual, and please remember, just as in every profession, there are many of this out there for the “right reasons.” For example, my team of 3 agents takes only 3 Buyers and 3 Listings at any given time. That gives us enough time every week to really focus on each client. Plus, we are exceptional negotiators and coordinators. We’ve been tremendously rewarded for this — our client base is loyal. We’ve saved most people multiple times what our fee is and made their transaction pleasant. I’m sorry you had such a bad experience, but please don’t paint with such a wide steamroller. Best.

Anonymous Coward says:

Re: Re: There are soo many of these

For clarification, Realtor is capitalized because it is not the generic term for a real estate agent (that would be something like “real estate agent” or “real estate broker”) Realtor is a copyrighted term which can only be used by real estate agents that are members of the National Association of Realtors, the main trade group of the real estate industry. According to their rules, it must be capitalized.

Doesn’t change the fact that whoring in a comment is low.

Anonymous Coward says:

Re: There are soo many of these

A “Realtor”?! Nothing less, Realtor with the capital R. Man, you surely think a lot of yourself. Realtor – an occupation requiring no skills, no education, no knowledge whatsoever. Just lack of shame and the ability to look people into the eyes and lie without blinking.

The Real Estate Chick says:

Re: Re: There are soo many of these

I don’t know what happened to you, but I am sorry for it. There are many of us that invest our lives in being excellent at our jobs. Unfortunately, in every profession, you are judged by the newest and least effective person to have just joined your ranks. Please know there are many Realtors who do excellent work for their clients, save them tons of moeny, manage an insane transcation for them. Homework is essential to finding the best service. I think, unfortunately, our generation (I’m assuming we’re close in age, I’m 33) is so tech driven we forget about human relationships sometimes. There is no way to judge that by blind web research. Referrals from friends and family remain the best way to judge the value you can enjoy from any service experience.

Anonymous Coward says:

Re: There are soo many of these

There are a lot of other people in the real estate business beside realtors: mortgage brokers, developers, appraisers, etc. They too need or produce information.
Let me tell you… the realtors assessment of the value of your house has no true meaning. Only a certified appraiser is authorized to determine this information, as far as most banks, state, and federal governments are concerned. So, a service like this has value to mortgage brokers who want a rough estimate before engaging the services of an appraiser.

David McDonald (profile) says:

Re: There are soo many of these

Zillow is not tryingh to connect buyers to agents. From the NYT piece:

“… And in contrast to many other real estate Web sites, like Realtor.com, run by the National Association of Realtors, or Home Pages.com, owned by Housevalues Inc., Zillow does not try to connect its users with agents…”

From what I read, they are aggregating available real estate data and providing it to the user, which they hope will help the user make an informed decision.

Marvin says:

Re: Treat As Urgent....

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Ben McNelly (user link) says:

Adding to teh bubble..

I still say there is room for growth in this area. Think about the new home buyer. Every year we are getting closer to the next generation of buyers actualy looking at homes, and this generation is prety tech savy. I would expect to see better working systems for real estate browsing, as well as 3D views and tours. I expect flash to reinvent this the way quicktimes VR did.

Dave says:

Yeah, lots of redundancy

I am a part-time real estate investor and IT worker, and it’s quite amusing to see the frequently silly web ideas that real estate people have. Or even if they’re not silly, they’re often things that have already been done since 1995.
————————-
The latest thing is a spate of imitators of the Million Dollar Webpage, which was covered on this site. Even if people aren’t tech savvy, it wouldn’t hurt to just pay attention so that you can tell what’s already been done. But real estate agents are blinded by their search for the newest get-rich-quick scheme.

Tim says:

Why Zillow Makes Sene

The single biggest hurdle to lower commissions in the real estate business is that agents routinely claim that they are the only ones that can accurately set sale prices.

If Zillow is successful, it allows the For-Sale-By-Owner market to be much more successful. Don’t believe the PR-they are all about picking up the value created in the FSBO market between 6% and a $50 ad.

kim levy says:

Re: Why Zillow Makes Sene

i used this site it is wonderful
allows you to adjust values great idea works very well this stock is worth it anybody know the symbol super……………………..super
great tool for realtors don’t be afraid ….great shopping tool for consumer if you dont like this site bigggggggggggggggg mistake these guys have a winner

The Real Estate Chick says:

Re: Why Zillow Makes Sene

If people routinely make 17% more in the transaction when they use a Realtor as opposed to when they FSBO (MAR 2004), why would you care about the 6% fee? Just like with E-Trade, people get cocky and think they suddenly know everything just because it’s on the Internet. Real Estate is an insane transaction to experience. Unless you do it every day, the emotion and stress overwhelms and often costs everyone lots of money they shouldn’t lose. I have a great client base and am not worried about my career, but it worries me to hear folks talking about exposing themselves to such risk because they (usually mistakenly) think they save money by doing it themselves. Listen, my dad was that way, bought every TimeLife install-it-yourself book ever made. But he was miserable and always stressed out about every project he ever took on. Sometimes it costs a little money to enjoy life, but it’s worth it. And, as in real estate, that joy usually also translates into more $! Karma begets Karma, Discount begets Discount!

David Crowell says:

Re: A real-estate site I'd like to see

I too wanted a site like that. As a programmer I wrote it. I wanted to go commercial with it… but the real estate industry gaurds the data. As someone suggested agents justify their commision by setting the price. I think they do it by controlling the home for sale information. I did scrape the data off of realtor.com and found a house for myself. It worked very well. I was able to compare homes side by side.

Haggie says:

No Subject Given

Every realtor that I know is a cute, married chick with half a brain that doesn’t really have a career but likes to think they are really doing something with themselves when they have lunch with “the girls” every day.

And I’m suppose to trust these people with the single biggest purchase and subsequent financial commitement I will ever make? Yeah, right…

The Real Estate Chick says:

Re: No Subject Given

I am a 15-year veteran of marketing and public relations work b4 going into RE. I know my shit. I work insane hours and manage tons of emotional crap for my clients. I am their nanny, driver, housekeeper, marriage counselor, financial adviser and friend. I often don’t have time to eat lunch, much less “lunch with the ladies.” I would never hire a part-time doctor, and I am not a part-time Realtor.

Ron Hands says:

a calm response

Yes, I am a Realtor. I am also a husband and father. What I am not is a whore or a vulture and I take offence in those comments. Of the million or so Realtors in the US most of the ones I know are honest and caring people. As for FSBOs, I have no issues with people who want to sell their home on their own. I commend them. As for my occupation requiring no skill, education or knowledge I partially agree. It takes very little money and effort to get your license. However, to become a good Realtor it takes a great deal of skill, education, knowledge, time and effort. That is what I have been doing for the last 11 years to build and grow a strong honest business. By the way, Realtors do not set the sale price, sellers and buyers do. We don’t just list a home to get others to show it, we are a service that a seller pays for to market their home and find them a buyer. Over my career I have help nearly 1000 families find their new home or sell their old one and my clients like the service I provide which is why over 70% of my business are repeat customers. As for the poster Anonymous Coward, I’m sorry you hate Realtors so much. I hope in the future you take some time and relax a little and try to understand that we are not as bad as you think.

Your Mom says:

Re: Re: a calm response

Anonymous Coward…you are a thread crapper. I am not a realtor, but have worked with and met some great people in that profession. It’s obvious you are an angry person or perhaps had a bad experience with a realtor. Either way, good luck if you ever try to be the salesman for your own home.

Amen says:

Re: Re: Re: a calm response

Amen. I’m not a “R”ealtor either, but Anonymous Coward, I wish you’d go away. Calling people retarded and whores, what’s that all about?

I’m happy to pay the Realtor that I work with since A. He only charges me 1% to list a home and B. The longest he has ever taken to receive an offer is 2 weeks.

Precision Blogger (user link) says:

Here's what WikiPedia says about "Realtor"

Here’s what WikiPedia says about “Realtor:”

“Realtor” is a U.S. registered collective membership mark identifying a real estate broker or immovable property agent (immovent) who is a member of the National Association of Realtors and subscribes to its code of ethics. Although the term Realtor is sometimes used interchangeably with real estate broker or immovable property agent or immovable property broker (immover), its use is reserved for active members of NAR. All
Realtors (Immovers) possess some kind of real estate (immovable property) license, but not all licensees are Realtors.

As a trademark name (like Kleenex facial tissues and Pampers diapers), “Realtor” should always be capitalized. The NAR requires its members to typeset the term in all capitals with an accompanying ? symbol. Many newspapers and other publications use mixed case in deference to their own style guide.”
(end of quote.)

It is highly unusual (but not unknown) for a trademark to be a noun. Usually, much use as a noun “genericizes” and kills the trademark.

I think it is incorrect to talk about “copyrighting” the word Realtor in this context.

– The Precision Blogger
http://precision-blogging.blogspot.com

admin (user link) says:

Re: All this doesn't matter since their data sucks

Indeed. Having assisted in protesting my condo
developments recent tax revaluation, I know what
units are what. As a simple test, I chose 4 units
which are identical (in same ‘row’, same size, same
lot(haha!),etc) and there was a 50k variance (10%).
Further, a larger unit adjacent to these 4 was valued lower.
Moving into an adjacent town, a property which I
personally know the sale price of 4 years ago –
when it was sold to be leveled and mcmansioned –
is listed at the same price. The new owners would
be quite distraught to know they overpaid 2.5X and
that doesnt even consider their 35k+ tax bill!
So yes, this site is a waste of time

San Diego real estate (user link) says:

Real estate bubble leaking

The San Diego market saw its’ top in the Summer of ’05! Since than, numbe4r of homes for sale have been increasing each month, sales are way off and December saw a tiny appreciation rate.

Once January ’06 stats are in I think many will see a real decline not only in sales but also appreciation. Very soon we will be talking not of APPRECIATION in real estate but DEPRECIATION.

For a insightful ‘insider’ article on the San Diego market, view:
http://www.brokerforyou.com/blogger/index.html

The Real Estate Chick says:

Anonymous Info

All real estate is local, just like politics. And that’s local as in to the region, then the city, then the neighborhood, then the block and then the house. Unless you are in the real estate market every day for years, how can you accurately predict what one home should command in the market? A blind # from a dot com is just that. No one at that internet company has seen/inspected the home, no one can ascertain what marketing was done and why and no one knows why it is your neighbor got $X for their home. That’s what Realtors are actually very good at, because they do it day-in day-out. Oh, and we are the negotiators and the transaction coordinators on top. We’re still the value of the century when it comes to service sector, yet everyone wants to get worthless info from the internet, where the ONLY motivation is to sell you advertising.

Dude with Smartz says:

Why Real Estate Agents are Held in Low Regard

In the Southern California market, Realtors price homes in ranges: e.g. Home ABC is available for sale at $600,000 to $640,000 . IMHO, this is downright playing dirty in the marketplace. And yet all the realtors down here, particularly in the San Diego County marketplace, pull these shenanigans. Instead of putting a specific price on a home, they price every home in a “price range”, and then they see what comes back from the buyer. This is ridiculous. No 1, a home should be either For Sale, or else it should be Auctioned Off as these “price ranges” tend to indicate. Yet the Sneaky Realtors are not calling them auctions at all! This is a primary reason why a majority of people do not trust realtors nor want to deal with them anymore – because they pull sneaky-snake tactics like this in the marketplace. And then there are the “Agreements” – here in California the “Standard Agreement” from the Nat’l Assn. of Realtors is extremely onerous; for a “Standard Agreement”, why is it 12 Different Agreements with Subparts & Extenuous Verbage. A huge turnoff to say the least. The above is just skimming the surface of what goes on here in California.

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