Industry

Friday Flash: Blood and guts

Author
Brian Boero
No.
856
Date
03/14/14

So listen: last week was interesting. I predicted portal blood sport for 2014, but things have gone medieval before the Ides of March. Try not to get splattered.

I’m going to leave it at that, but do want to touch on one thing: Trulia.

They’ve put a heavy focus on industry relations over the past year, led by respected industry vet Alon Chaver. And they seem to be gaining traction, cutting deals with RE/MAX and NRT as well as lining up some MLSs for direct feeds.

I’m not sure last week’s developments will set them back, but the competition for industry affection just got a lot more intense for them.

They will have to react to Zillow, which is not what the company really wants to be doing.

Trulia finds itself in the same situation on an even more important matter: Brand. Trulia has always been a company that eschewed major PR and advertising in favor of a focus on product and, in the early days, SEO.

By announcing a $45 million consumer ad campaign, the company has given us the sense that it’s been drawn – by Zillow – to a battle it would prefer not to fight.

This is not a comfortable place to be. To get out of it, Trulia will have to differentiate strongly. I’m sure we’ll see some moves. I think they need to come soon.

If I told you that the MLS had no role in almost half of all home sales last year, you’d think I was nuts. But that’s exactly what an analysis from data and technology company CoreLogic shows.

You can argue that number down some, sure – but the basic fact remains: the gravitational pull of the MLS as the center of the real estate universe has weakened. To suggest that this is just a consequence of low inventory is wishful thinking. It’s really a function of two things:

  1. It has become really easy for people to communicate, share information and create digital enclaves. I’d feel silly even mentioning this but for the consistent denial of this reality by many invested in the matter.
  2. We are witnessing something I’ll call the “atomization of real estate.” Value and connection are massing around smaller units in the industry. The agent team phenomenon is the prime example of this, but so are private listing networks. I don’t think this trend will reverse itself.

This doesn’t spell the end of the MLS. Far from it. If MLSs pursue a strategy of cooptition rather than aggression, I think it presents an opportunity to create more value for subscribers. That takes guts, but it’s doable.

Fighting this is a dead-end. Just look how silly the state of New Jersey looks trying to stop Tesla from selling cars to people who want them.

Let’s not do that.

With stuff like this going down, and with an RFP for creating a national “Pre-MLS” database floating around the industry, a lot of people are jittery. I tend to focus on such things because I think their emergence, however they play out, is healthy for the industry.

But there’s a lot of just plain good stuff happening. Most markets are healthy; I know of more interesting real estate startups in stealth mode right now than at any time I can remember; Homeownership is retaining its aspirational grip on the American mind.

In other words, enjoy the weekend!