There’s news and then there’s news. Consider:
A real estate industry study released today shows that most popular consumer real estate search engines, including Trulia, Zillow, Google and Yahoo!, offer home seekers only a small fraction of the homes actually available on the market — and that many of the listings are inaccurate or out of date. Real estate searches on these popular sites in three sample markets — Miami, Dallas and San Diego — failed to provide users with as much as 92 percent of available listings in their home searches.
“Holy cow!” you might think. “The mainstream media is writing something actually factual about the defects of venture-capital-funded Realty.bots! No puff, no fluff, just the straight dope!”
Contain yourself. This is not news. Like most “news,” it’s a regurgitated press release. “Cui bono?” “Who benefits?”
The study, commissioned by Roost.com and conducted by the WAV Group, points out the stark contrasts between different online property search methods available today and concluded that the most accurate source of listing information is the local Multiple Listing Service (MLS). The WAV Group specifically researched how popular consumer real estate search sites including Trulia, Google and Yahoo!, among others — which aggregate listings from a variety of third-party sources — stack up to sites like Roost.com, which are enabled by the MLS. The MLS is the real estate industry standard database for sharing information on local homes for sale and is available only to licensed real estate agents and brokers; all the listings on the MLS are derived from local agents and brokers. To serve the needs of agents wishing to make MLS property search available to consumers, MLS boards nationwide have deployed a standard called Internet Data Exchange, or IDX.
This again is obvious, of course, so it’s perfectly understandable that mainstream media mavens seem not to know it. But it’s completely self-serving on Roost’s part. The actual news in this “news” would be:
Trulia/Zillow available everywhere (even on your phone), Roost unknown to founders’ mothers
But when would you ever expect to find news in the newspapers?
In fact, in the cities where it operates, Redfin.com has the most comprehensive inventory of homes for sale, this because it blends MLS listings with an aggregation of by-owner listings. Estately.com, which recently expanded into Los Angeles, combines comprehensive MLS listings with extensive neighborhood, schools and transportation information. If the subject turns to better IDX systems, Roost is playing a weak hand.
But here’s a more important fact: No one is buying every available home — or every available anything. We each of us buy whatever it is that we we buy from a limited inventory. We don’t think to object that Lowe’s and Best Buy and Sears and Walmart don’t have the same inventory of refrigerators. When the real estate commissions are divorced, what we currently think of as “the MLS” will become a host of private enterprises, and the same sort of situation may obtain. There is no such thing as a truly comprehensive inventory of homes for sale, and, in the near future, particular inventories might well be less comprehensive. So what? This makes no difference in refrigerator or automobile sales, and it will make no difference in home sales.
But: Even more interesting to me is that Roost is announcing to all the world that the Realty.bot market is, in its view, a Red Ocean — a space where sharks compete with each other for every scrap of meat, and my rapacious feasting must necessarily leave you hungry. Zillow.com, in particular, was started as a would-be exemplar of the Blue Ocean Strategy, so there is real, actual news in this “news”:
The gloves are off, folks. The Realty.bots may not yet be at each other’s throats, but Roost.com is ready to put a big fat shiner on any real estate start-up that needs one.
As a matter of disclosure, Roost offered BloodhoundRealty.com a free trial feed when they came to Phoenix, but I got tired of trying to work out the technical details for what is, in the end, just another IDX system. IDX is itself a very Red Ocean, and it’s plausible to me that IDX is so much ho-hum while the Realty.bots are so very much gee-whiz! precisely because mainstream media reporters are so clueless about what is truly what in real estate. Oh, well. Life is not always fair.
Even so, this is a funny episode, if only because the man-behind-the-curtain in the “news” business is so completely exposed. If you take that question — “Who benefits?” — along with you as you read the “news,” you will discover more than you ever wanted to know about how little news there is in the “news.”
Technorati Tags: disintermediation, real estate, real estate marketing, technology
David G from Zillow.com says:
To Forbes’ credit, they do indicate that this is a republished press release but still, you’ve got to be pretty starved for content if you just start regurgitating each release that comes your way. It’s not just the MSM; the blogosphere fell for this FUD first (see Techcrunch earlier this week) yet to their credit, most bloggers have commented that the study is bogus.
Never forget the man behind the curtain. Apparently the back-story to all this bluster is that roost is currently looking to raise investment. This PR blitz has been in the works for a few months and is targeted at propping up the company’s on-paper valuation during the raise. So we’ll probably be seeing more of this. What is clear is that roost doesn’t need any friends but I am surprised that they’d attack their target customers so directly – if listings are missing from the major portals, that’s not only a critique of those sites; it’s an indictment of the agents and brokers that roost claims to serve.
August 26, 2008 — 8:42 am
Greg Swann says:
> see Techcrunch earlier this week
See, I knew I was right not to be reading my feeds! 😉 Actually, I had heard rumblings here and there, but Arrington is always such an fanatical idiot about real estate that I didn’t bother to look.
August 26, 2008 — 8:49 am
Gary Frimann says:
Gregg,
Yes, there is very little “news” in News. The media does not truly know what is going on in real estate. I feel that our local papers and TV channels have correctly predicted 8 of the last 4 recessions!! Further, they are so far behind he curve.
They are not trained ecconomists, agents, legal experts.
BUT– They do influence what the public perception will be. A story about some agent committing fraud, and all agents are then painted with a huge swath, making it that much more difficult to do business.
If, in California, where I’m from, we could get a statewide MLS and make that bigger than Zillow or Trulia, and offer all the “gee-whiz” stuff, it would be great. I guess the problem is the money. Those guys get millions from VC’s. We, as agents are trying to be self supporting.
August 26, 2008 — 8:51 am
Greg Swann says:
Okay, I went to look. Started stupid, ended with a vendor-fest. It turns out HomeGain is the perfect answer to any question! Glenn’s comment was great, but Heather Fernandez showed us all why she was so effective writing soundbites for CongressCreeps.
August 26, 2008 — 9:12 am
Michael Fisher says:
“failed to provide users with as much as 92 percent of available listings in their home searches.”
Add to that Zillow’s auto-feeds that make some properties show up on the site 5 or more times for the same address making more homes for sale (about 30-40% more) than there really are.
Search: 51 Terrace Cir. 92677 as an example, one feed from local MLS, one feed from agent paid lead generator directing you to the agent’s own site, one feed from another bot, one the agent’s entry and the final one from the broker’s feed. If it were a forclosure then you could add 2 more auto-feeds to this home, only those 2 saying “address undisclosed” further frustrating Mr. and Mrs. Lookie-Loo.
Quantity not Quality, for shame.
August 26, 2008 — 11:30 am
Heather @ Trulia says:
@Greg – as you know, it takes skills to make the big bucks in the public sector.
Bottom line is that we are focused on creating the best product possible (and we don’t claim to be there yet). As I think about it…the fact that someone is paying for a study to debunk us, might mean that we are doing something right!
August 26, 2008 — 2:30 pm