Online real estate's dirty little secret
If you’re in the “traditional” real estate brokerage business, make sure you send Glenn Kelman at Redfin a gift basket this holiday season. Make it one of those extra fancy ones, with the mini salamis and the macadamia nuts.
I’m serious. He deserves it.
Glenn’s a really smart guy, with really smart people working for him, who has spent the past few years giving me and you a world class education on consumer engagement, marketing, and website user experience in the course of building his company.
This week, the company released a significant update to its website. It is worth a close look. Redfin has used its access to MLS data to generate powerful and easy-to-understand analytics.
Consumers searching for homes on Redfin.com can now get accurate and current data on list prices, sold prices, days on market, price reductions and more — at the neighborhood level. One particularly ingenious graph displays these last two data points side-by-side, allowing buyers to get a clearer read on the “offer now or wait” question.
This type of thing is not entirely new. Altos Research provides similar charts, but they are not derived from MLS data, and thus not as useful. Terradatum’s Broker Metrics product does offer a solution that is MLS based, but its coverage is limited. Much of this information is available inside MLS systems, but is not optimized for public display.
And currently none of these solutions get users down the neighborhood level, where market data really becomes meaningful.
Redfin’s effort sets a new standard for presenting market information on a brokerage website, which has heretofore been too reliant on stale public solds data.
This development also raises a larger issue: The value an MLS delivers to its subscribers. With dues dwindling, MLS organizations across the country are bolting applications onto their platforms in a scramble to justify their fees or generate new ones.
However, I think it might be more effective for them to pool resources and develop web applications based on the goldmine of information sitting at their feet. We have 12 years of research — and the fantastical attractive power of the Zestimate — telling us consumers love value and market data. Shouldn’t more MLSs help their subscribers give it to them?
Most brokerage companies do not have a roomful of web developers or millions in VC like Redfin does, but they do have access to MLS data. And the off-the-shelf solutions I mention above offer some of what Redfin has done.
Some brokers will move on this. And I am nearly certain we will see more vendors enter the data and analytics space in online real estate. There’s lots of opportunity here.
— Brian Boero
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