If you thought the housing market was competitive, try online real estate sites. After a couple of years of seeming stability and calm, the sector is now booming with new startups offering everything from estimates on the value of your house (and your neighbors) to discounts on broker commissions and ratings and reviews of local sellers' agents.
According to comScore, traffic to U.S. real estate sites grew 23% from April 2005 to April 2006, representing an increase from roughly 34 million to 42 million unique monthly users. The most visited sites, according to comScore, were the Move.com network (formerly Homestore) followed by MSN Real Estate (the biggest gainer), HomeGain, AOL Real Estate, RealtyTrac.com, Rent.com, ServiceMagic, Apartments.com and newcomer Zillow.com.
The National Association of Realtors (NAR) says that approximately $12 billion dollars in the U.S. is spent annually on real estate marketing and advertising, much of which is still allocated to traditional media. The Newspaper Association of America reported that print real estate classified advertising grew 26.3% from the first quarter of last year to $1.1 billion in Q1 this year. Indeed, roughly one quarter of the projected $18 billion in print newspaper classifieds this year will be contributed by real estate listings.
In contrast to print and other traditional media, spending on real estate marketing online is estimated at somewhere between $1.2 billion and $2 billion for 2006. Yet the NAR reports that the percentage of potential U.S. home buyers using the internet as part of their housing search process went from 2% in 1995 to 77% in 2005.
That discrepancy, between consumer usage of the Internet and the internet's share of real estate ad dollars, makes the sector ripe for expansion—and future consolidation. Here's a partial overview of some of the new or noteworthy sites and tools that have launched or re-launched recently. It's not a complete list—given the importance of vertical real estate sites, SearchDay will be looking more closely at the sector going forward.
Google's all-purpose content upload site offers real estate listings from a growing range of sources, including the New York Times, former Knight-Ridder newspapers and several vertical real estate sites. In a mysterious and somewhat serendipitous process, Google's "one box" real estate pull-downs occasionally appear on search resultswhen users input certain combinations of keywords. These listings are also available to consumers directly via Google Base. (As a side note, the pull-down menus in Base offer a window into Google's approach to vertical search more generally.)
Google Earth also features real estate listings, based on its API and the development efforts of various real estate firms. Here is Forsalebyownercenter.com and Prudential Real Estate, Chicago. While the richness and possibilities for realtors are greater in Earth, the exposure is more limited. To date there is only token usage of Google Earth for real estate search by consumers.
Owned and operated by real estate lead-generation provider HouseValues, HomePages was one of the first professional sites (after HousingMaps) to use maps as the primary display and navigational vehicle for real estate listings. The site offers complete MLS data also provides extensive neighborhood and schools information. It also offers a range of subscription-based ad opportunities for local agents.
Started by former Jupiter analyst Niki Scevak, Homethinking rates the performance of sellers' agents in an effort to help people evaluate and find agents to represent their homes. Homethinking takes public data and consumer reviews and effectively gives homeowners a scorecard on how well or poorly local realtors in their markets perform. Here's an example. The site is almost unique in providing this qualitative and quantitative information on real estate sales professionals. Advertising on the site is primarily pay per phone call, which currently commands $40 per call according to Scevak.
One of the original "mashups" that began the mapping API frenzy almost two years ago, HousingMaps combines Google Maps and Craigslist real estate data. Site creator Paul Rademacher left his job at Dreamworks Animation to work for Google full time on the heels of his unpredicted success with the site. And the site ignited a craze to plot real estate listings data on a mapping interface, a model that has been adopted by most of the newer real estate verticals to launch in its wake.
Not a real estate site per se, but a video production and private label "video magazine" service for realtors and realty companies. Run by Brad Inman, who is also behind local video and travel site, TurnHere.com, the site offers the emerging online ad medium of video to real estate industry professionals.This roundup of real estate vertical search sites will continue next week.
NOTE: Article links often change. In case of a bad link, use the publication's search facility, which most have, and search for the headline.
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