Matthew Ferrara just left an interesting comment about Realtor.com Home Values…
…that reminded me of this video from the previous head of REALTOR.com:
[youtube=http://www.youtube.com/watch?v=0DNtYtM_gX0]
“…Instead of just copying everyone else, maybe REALTOR.COM (and by extension, NAR) could make some decisions based upon market realities. And the reality is that Zillow (and other similar tools) are really inaccurate because the “conditions” on the ground are always so fluid that “estimates” based upon “market data” which is always stale because of “time” are really bad education for consumers. REALTORS should know better. Many consumers buy homes “regardless” of their estimated market comparable – and many sellers are able to sell for higher (or can’t sell nearly the same as a computerized estimate) because of all sorts of NON estimated items – like poorly performing schools, local tax changes, crime, etc – NONE of which can be accurately reflected by a computer. Only by REALTORS who keep up with “the full marketplace” of issues that impact homes.
If I interpret this right, Ferrara thinks that realtor.com should not offer such an AVM product, but should instead focus on helping real estate professionals educate consumers on the fact that AVMs aren’t worth the digital real estate they’re printed on…
My guess is that Ferrara has his pulse on the finger of most realtors and they’d love to hear this… but at the same time, Zillow has single-handedly changed the public’s expectations. Consumers now expect free home valuations when they go online and if they don’t get it from a realtor, they’ll go elsewhere…
And I’m looking forward to future roundtables.
Matthew Ferrara 2:49 pm on June 14, 2008 Permalink |
Great follow up – and I totally agree. Zillow has changed the public’s expectations and caught the real estate industry with its pants down.
In fact, that’s what most of these “so called” industry changing companies do: They just go around the slow-moving, stay-in-the-same-lane REALTORS and go direct to the public. REALTORS really do a very poor job of even RESEARCHING the public – I ask in EVERY CLASS whether ANY of the attendees has purchased NAR’s Profile of Home Buyers and Sellers – and NONE OF THEM EVEN KNOW IT EXISTS! So how are they going to invent anything – a pricing tool, a marketing tool, a new service – if they don’t know a thing about the consumer themselves.
For two decades, while internet and technology companies have wreaked havoc on the industry, the COMMON theme amongst REALTORS was “hunker down” and close the shutters! Notice the San Diego MLS this week’s “latest technology” was to create another security barrier against – GASP! – customers getting into the MLS!
So copying the “estimator tool” is still silly – because it means that REALTORS won’t actually stand up and say that the “zestimates” are wrong; Instead, they’ll say, “Hey! If you want wrong estimates of your house values, we’ll give them to you TOO!”
And around and around we go… where we stop, nobody knows!
- MF
Justin Zimmerman 12:37 pm on June 15, 2008 Permalink |
I agree with Mr. Ferrara, data is rearward looking and as you would find in any investment prospectus… “past performance is not an indicator of future results”.
This is the logical argument.
However “consumers” are rarely rational.
In fact “irrational” actions have put our housing market into the compromised position it is in today.
But the argument on this blog post is not about the marketplace, it is about what actions Realtor.com should take in reaction to the competitive pressures to maintain top billing as the search portal of choice for the public.
Keeping the issues relegated consumer expectations v. reality.
Since Zillow has irrecoverably changed the consumers expectations on how home values should be delivered… via the internet for free.
The reality is that we know these estimates are a loose interpretation of value and should really be prefaced with… “the following statement of value is an estimate, for a more accurate measurement of value, please contact your local real estate professional”.
What are the chances of Zillow doing that? (lol).
But what should Realtor.com do?
1. Play into the “gravity” the Zillow exerts and give credence to their model by building their own online value estimation service.
2. Or fight a very tedious uphill consumer education battle to make the public aware of Realtors value in determining home prices.
Pandora’s box is open… embrace it.
Clearly there is no way to erase the consumers mind that Zillow is out there and for all practical purposes works… they get an instant estimate of value as opposed to nothing.
But to create a similar value estimation service on the Realtor.com for the benefit of the consumer could be a boon to the site and the Realtor brand, especially with the right public awareness campaign (Realtor and general consumer)
I don’t think it has to be an either/or debate.
Do both. Build and Educate…
(I make this statement I assuming Realtor.com’s technology plan and capabilities are equal to or greater than Zillow and other private endeavorers)
To do nothing, gives us more of the same…
Eroding confidence in the value of the Realtor, decline in web traffic to Realtor.com, and a ever widening gap through which new technology companies will push through and exacerbate our current dilemma.
To conclude my thoughts lets look at what history tells us.
Microsoft v. Google
We are Microsoft.
We built an industry, provided the protocols on how things get done, and became a pervasive force in defining an ear of business practices, influencing laws, and shaping the American dream of home ownership for millions of people. We did an awesome job, but the times have changed.
The future is Google.
Using the platform Microsoft created (personal computing in people’s homes), Google began leveraging that existing infrastructure to give away services for free (searches, email, google docs, mapping) to create a totally consumer centric business business model and eroded the value of some of Microsoft’s core offerings.
The facts.
Microsoft isn’t dying, it’s just trying to figure out how to reevaluate it’s position as once former monopoly for computing…
Which means we need to “think different”.
- JZ