Trulia Trends report: hottest ski towns and more

Today we issued our February 2007 Trulia Trends report, a monthly snapshot of what consumers are searching for on trulia.com and real estate trends.

This month’s Trulia Trends identifies the top five most popular ski resort towns favored by mountain lovers across the country (graphic above). It also lists the biggest movers and shakers across the U.S.–both in terms of search behavior and list prices. And new this month, Trulia Trends introduces a “spotlight on…” section, an up close look at real estate in one city every month. Big surprise, our launch city is beautiful San Francisco.

Interesting findings:

• From July 06 – Jan 07, search traffic for ski resort locations increased 2.37x above all searches on Trulia. Best time to buy a home in the snow? If home buyers want to beat the rush, Trulia search data shows that July is best.
• The eastern half of the U.S. saw the biggest percentage gains in overall search queries. The sole New York entry on the top ten list was Queens, NY, indicating that the increase of development in the borough has been met with an increase of consumer interest.
• The representative U.S. home shopper on Trulia is looking for a 2,075 square-foot single-family home with 3.2 bedrooms and 2.2 baths at a cost of $479,254.
• Second home shopping season: seaside communities in locations as diverse as New Jersey and Florida were popular with home shoppers in January.
• Old is new again? Resale properties in Phoenix and neighboring Gilbert, AZ experienced price appreciation above 5%, despite competition from extensive new development in these regions.
• Keep an eye on Ohio: Akron, OH was tenth on the list of “biggest risers” in search queries and saw the second largest price increase during January.

In our “Spotlight on San Francisco”, we identify the 10 neighborhoods that are the biggest risers and biggest fallers in terms of search behavior.

San Francisco homes averaged $1.07mm on Trulia in January. Two of the top five neighborhood risers–Sunnyside and Bernal Heights–underscore that home shoppers were looking to obtain San Francisco’s style with out its notorious spend. With an average list price of $792,530, the Sunnyside neighborhood continues its path to SF’s next hot spot. And Bernal Heights views are still priced at a discount, with average list prices at $794,313.

Thanks again to Jonathan Miller at the Matrix for his help creating this report.

Download the full report here.

We Luv Those Lists

We heard from Stefan Swanepoel that Trulia has been acknowledged in the 2007 Swanepoel TRENDS Report as one of the Top 10 Trendsetters for 2006. In addition to us, the lineup includes: Blogging Systems, First American, Google, HouseValues, Obeo, RealEstate.com, RealtyU, Redfin and Zillow. Stefan reports that he and his team selected 10 Trendsetter companies that “stood out as leaders in changing the industry during 2006.”

If the 2006 edition is any indicator, this nifty report provides a good summary view of trending across real estate. Last year Swanepoel provided a soup-to-nuts look at key drivers in the market, and it sounds like he’s beefed up the 2007 Report by about 50 percent. As he describes it, the Report “…summarizes all the key strategies, companies, new business models and initiatives impacting residential real estate. Each of the top 10 trends are carefully analyzed to provide brokers, association leaders and top producing real estate agents with a clear picture of where the industry is headed together with a special ‘take-away’ section at the end of each trend.”

Looking forward to the read!

Trulia Trends report – what are consumers looking for on Trulia?

Today, we are launching our first Trulia Trends report – a monthly look at how people are shopping for homes online.

Why’d we do it?

People have been buying homes for centuries, traditionally relying on many sources–including professional counsel, historical sales and pricing information–to understand local real estate trends. With the Internet, they can now also get a real time view point of consumer interest, before the real estate transaction occurs. While we’ve only scratched the surface, we believe this will help both consumers and real estate professionals stay ahead of their local market, and stay abreast of what’s happening across the country.

In the report, we’ve culled data from user searches for the month of December across 15 major cities in the U.S. A few things that surprised us:

• Our 10 most popular properties were evenly split into two categories: the bargain home in a hot market or high-end property listings that ranged from $1.25mm to $25.9mm
• Real estate consumers in some cities—like Boston, Seattle and San Francisco—may be interested in moving out of state, while consumers in cities like Phoenix, Charlotte and Milwaukee prefer to keep it local
• Up-and-coming neighbhorhoods were as popular as long established neighborhoods in many cities

We’ll be releasing this data on a monthly basis, so if there is anything that you think should be included, let us know. Thanks to Jonathan Miller at The Matrix for his help creating this report.

View the full report for yourself here. And the press release here.

Viral Growth- More Than a Buzzword

Like many other companies, we think a lot about “viral growth” – how it comes about and what we can do to get more of it.

The idea behind the term viral growth dates back to 1976 with Richard Dawkins’ publication of The Selfish Gene. This book proposes evolution as a cultural phenomenon, the units composing this evolution being “memes” rather than genes. The major difference between biological and cultural evolution, besides the anatomical one, is that a meme can spread much more quickly than a gene. This is true now more than ever, as the Internet blasts through ever more communication barriers.

What is a meme? It’s a framework for thinking about things– fairly analogous to a thought, or an idea– but it really could be anything. Examples of memes: wearing clothes, wearing white after labor day, wearing a suit to work, Who Wants to be a Millionaire, the phrase “Is that your final answer,” cotton, the story you have about the biggest fish you ever caught, an agent’s reputation. A meme is anything that can be passed on from person to person and whose rate of acceptance varies directly with its ability to entertain, help, or in some way be useful.

Viral growth is when a meme spreads very fast, without the aid of marketing dollars. But how is this growth achieved? Why is one meme selected over another? There are 2 concepts to keep in mind:

1. It’s the audience, stupid. The success of a meme depends largely on its environment. Imagine a genetic disorder that turns blood cells into hard, sickly crescents that clog vessels and deprive your body of oxygen. You’d think it’s a horrible disease that no human would want, but this disorder is a veritable BMOC in one particular setting. It is sickle-cell anemia and is widespread in sub-Saharan Africa, where it counteracts malaria by killing off infected cells before they spread. The point is, almost no gene or meme is completely and utterly bad (or good), but the audience needs to be right. On the other hand, electricity seems like a pretty useful thing to [almost] everyone who encounters it in its non-lighting form, but it doesn’t sell in Lancaster, PA.

2. But what does the audience want? The problem is, it’s nearly impossible to know exactly what your audience wants. This is partly because your audience doesn’t know; witness the roughly 80% percent of home sellers that hire an agent after trying to sell their house themselves because they “knew” they didn’t want to pay a commission. But mostly it’s because you’re just one entity with a particular view on the world, which may or may not be in concert with the audience’s desires. The only way to check this ignorance is to innovate continuously, keeping things that work and dropping things that don’t. Instincts and experience can launch a product, but in the absence of exceptional luck, measuring and testing are required to really make it work.

Good luck!

What do people search for?

It’s Friday afternoon and I am getting ready to go out and start celebrating my birthday which this year conveniently falls on Saturday. People around the office have been making fun of my metrosexual party shirt so I had to put a sports jacket back on. Now I feel the need to express myself in a different way, so I am writing this blog post. I’ve been playing around with the overture inventory tool for a while and noticed some interesting things pertaining to real estate market search patterns across the Web. So, what do people search for?

Around 3 million people searched for the term “real estate” in October. But which cities are most popular? The table below gives the most popular geographic searches for “real estate” compared to the city population. The higher the ratio, the more popular the city is.

Lahaina, HI data looks very suspicious. Imagine over 200K people all moving into a city with less than 10K population. Hmm….it’s either a developer paradise, favorite web surfing location, or some kind of bug. Nevertheless, for everything else, the numbers are pretty interesting.

Charlotte, Raleigh, Durham are up-and-coming cities with quickly developing technology industries, seen as places for high-tech workers to find refuge from the exuberant housing prices of San Francisco and New York. Prices in Chicago and Phoenix have been growing steadily in the last few years. Could the current lack of interest be explained by the fact that the prices are topping out and it is not feasible to make a quick arbitrage buck? Can you help me explain the rest? As for me, its time to go and celebrate.

What is a “normal” American home?

In my role as a developer here at Trulia, I find myself using our massive amounts of home information to answer random questions that interest me. I figured I would take the readers of the Trulia Blog along with me on one of my data journeys. This particular question came about because I am still a bit shocked by the crazy home prices out here in the SF Bay Area. I grew up in the Detroit, MI metro area, and the whole idea that you have to be semi-rich to own a home is quite a culture shock for those making the move I did. This led me to wonder: What exactly is “normal” for the price of a basic 2 bed, 2 bath home? And where exactly can you expect huge deviations from this norm? In other words, it’s one thing to have a city full of huge mansions that everyone knows are expensive, but where do even the homes that most would consider “basic” places carry significant price tags?

Let’s start with the median value of a 2 bed, 2 bath home. For everyone who hasn’t opened a stats book in a while, the median is the value that comes from lining up all values in order and picking the one that is exactly in the middle. Using the Trulia database, I can’t only say that the median value is $249,900, but I can also say that the property that represents the median in Trulia’s database is this condo in Sarasota, FL.

So let’s take this concept city by city – here are eight median 2 bed/2 bath properties on Trulia in cities far more expensive than my hometown. Because it’s the median, the actual homes in the Trulia database will change. But they (and their price tags) are interesting none-the-less.

1. Coronado, CA – 120 C Ave, $1,579,000
2. Laguna Beach, CA – 990 Meadowlark Dr, $1,350,876
3. New York, NY – 300 E 40th St, $1,295,000
4. Malibu, CA – 6435 Zumirez Dr, $1,130,000
5. Islamorada, FL – 101 Gulfview Dr, $910,000
6. Newport Beach, CA – 280 Cagney Ln, $829,000
7. San Francisco, CA – 1011 23rd St, $815,000
8. La Jolla, CA – 5366 La Jolla Blvd, $799,876

So what have we learned? Don’t live in California. Okay, just kidding, but I learned that you can literally sell your middle-of-the road Laguna Beach home and get the mansion of your dreams in 95% of the US (MTV reality show not included). As for me, I work in San Francisco and am anchored to the Bay Area for the foreseeable future. Luckily, all this doesn’t really matter to me because I plan on winning the lottery. If anyone has any pointers on how to do this or can put me in contact with this guy, please leave a comment.

Blogging pioneer Robert Scoble at Trulia

We were honored a few weeks ago when Robert Scoble, the very cool tech evangelist, blogger and VP of media at Podtech.net, came by to interview Pete on the ScobleShow.

Robert also filmed a demo of Trulia and our tools – check it out here.

Scoble made waves over at Microsoft from 2003-2006 as part of the Channel9 video team, where he walked his camera into rooms with engineers, Bill himself and everyone in between. His book is a must read for brokers and agents considering using a blog to communicate with their customers.

NARdiGRAS Redux

NAR held their annual conference last week in New Orleans and I’m happy to report that Bourbon street is alive and well!

RIS Media hosted the “Power Broker Panel: Managing in the New Market” where high level real estate executives pondered how technology is changing/helping/hurting today’s brokers and agents – and what they should do about it.

Participants were (all bios are here):
Brian Buffini, Chairman & Founder, Buffini & Co.
Earl Lee, President, Prudential RE Affiliates
Alex Perriello, President & CEO, Realogy
Jim Sherry, President, Innovative Solutions
John Featherston, President & CEO, RISMedia Inc.
Dave Liniger, Chairman, Co-founder of RE/MAX International
Harley Rouda, CEO & Managing Partner, Real Living
Arthur Sterbcow, President, Latter & Blum

Thought I’d share a handful of their observations:

Sherry on print ads: I think we advertise so much print, because you can’t measure the effectiveness…so it’s an even worse deal than you think it is.

Lee on managing in the new market: We need to look at things on less of an emotional basis – and separate that data that gets distributed from the value that we bring to the table.

Sterbcow on agent value: The thing I learned about the market [through Hurricane Katrina] is the importance of a real estate agent as a human being or connection point to another human being. No website will ever replace that relationship – ever.

Rouda on internet ads: 34% of all media consumption is on the Internet, but only 6% of all ad spending. In our industry that number is even higher with 77% of consumers going online, but we spend far less than 6%. There is an opportunity to reach the consumer online with the right message that’s untapped.

Liniger on internet ads: 12 months ago we spent our money on traditional real estate advertising – properties, TV, print, radio — several thousands dollars for first time this year went to online marketing.

Rouda on the market: 2006 is going to be much worse than you thought. But we’ll rebound by the end of Q2 2007.

Perriello on the media & advice for agents: I hope Harley [Rouda] is right – but one thing that we can be sure of is that the media will be negative. The market is not bad – it will be 3rd/4th strongest year for real estate and consumers don’t know that houses are selling. Of the advertising that you do, make 20% sold listings.

Lee on a consolidated MLS: I’m a states rights guy. You cannot dictate from above. It will be a disservice to the industry if we do that.

Buffini on how to deal with change: Agents need to get out of the passive mode. When I was 25 I could eat pizza and oreos and lose weight. In my 40s, I walk by my kids eating oreos and I see the shadow of my backside increase. Agents need to break old habits of waiting for leads to call. They need to watch their diet.

Speaking of diets, the next time you head down to The Big Easy, I highly suggest Emeril’s Delmonico restaurant; an iconic New Orleans restaurant, now with a Lagasse twist!

Is age nothing but a number?

This graph shows the percent of existing homes that were built in a given year in San Francisco (an old city), Houston (a new city) and Las Vegas (a very new city). It’s interesting to correlate the peaks and troughs with events like the San Francisco earthquake at the turn of the century, the Great Depression in the 30s, World War II and other significant events.

After the April 18, 1906 earthquake in San Francisco, there was a significant spike in home builds — the yellow line shows that 2.2% of San Francisco homes were built in 1906, 2.4% were built in 1907 and 2.65% were built in 1908 (these numbers might sound small, but SF hasn’t gone above 1% since 1951!).

Taking a look at Houston from the late 70s to early 80s, it looks like the Oil Embargo bolstered home building in the city, which abruptly ended when the embargo was lifted in 1986 (ah, oil and money bring back fond memories of Dallas…).

And Vegas baby? Roughly 45% of all homes on the market were built in the past 10 years. Maybe all those kids that played poker online have decided to take it up full time.

Any other interesting observations? We’d love to hear them!

Are agents in trouble?

Real Estate Professionals occasionally approach me with concerns about the increasing amount of free information being made available online. Things like:

• If consumers find all the real estate information online, why would they need me? Or why would they pay a “full” commission?
• Why do you display crime rates for cities and neighborhoods? That does no good for my marketing efforts!
• If buyers see the average home price for a given region, what do they think of the home I’m selling that is above/below average? It can’t be good for sales.
• Why should I display the complete address of my listing? Consumers will find the home by themselves and have no reason to contact me, the listing agent.
• Consumers can now go and list their home on Craigslist, for free! How can I justify my service fees?

These concerns are all legitimate. Part of the agent value proposition to a buyer in the past included access to (otherwise unavailable) information, like a weekly print out of the latest for sale listings. For those selling their home, the agent could do his/her marketing magic and list the home with the ultimate marketing tool (at least in a seller’s market): the MLS.

Now, with the ability to view hundreds of thousands of web sites with IDX listing search capabilities, the Internet has practically commoditized “access to listings” as part of the real estate equation. Now you can search price comparables from numerous broker sites (e,g., check out www.johnlscott.com for fresh comps directly from the MLS) and information ranging from past sales transactions to schools to crime rates can be found on thousands of Web sites.

Also factor in the mindset of the latest group of home buyers, the Gen Xers (30-41 years) and their Gen Y (12-29 years) followers, who are hungry for information online. They are called a “fiercely independent” group that thinks they can learn to fly a space shuttle over a weekend given access to Google and enough coffee. Maybe.

So there are two trends developing: free access to information and a generation that wants to do it themselves. Are doctors in trouble because you can find information about any disease or drug online? No. Are agents in trouble? Not at all.

The dissemination of information doesn’t devalue the “traditional” agent; rather, it’s about acknowledging that the agent value proposition is evolving. Online sites with listings search and market data allow agents to focus on what they do best—to be the neighborhood expert who understands the market, provides advice and handles all legal and backend aspects—with more time to get more customers.

When agents think about winning value propositions for information-hungry consumers, particularly us do-it-ourselves Gen Xers, it’s now about: “Let me show you the best tools and information you can use to familiarize yourself about the market, and I will use my sophisticated marketing, pricing and negotiating skills to maximize the value you get from your home sale/purchase.”

Yes, the value proposition is changing, but this is great news for the industry. A well educated, hard-working real estate professional will come out as the winner in the middle of all this change – and be more productive than ever.