by Brian Brady
Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL
Have you been watching Zillow.com lately, in the press? They’ve done a nice job at selling the mainstream media that they are the “real estate statistics” firm of choice. With the introduction of Zillow Mortgage Marketplace, they are aggregating real-time live quotes and are positioned to trump other media sites for accurate mortgage rates reporting.
I”ve admitted that I’m a Zillow-phile. As a mortgage wonk, I love the data they gather and the reports they publish. I read Spencer Raskoff’s Active Rain Blog, weekly. I’m constantly comparing my terms offerings to the realistic quotes on ZMM (I’m a few hundred bucks more expensive but a helluva lot cheaper than the average quote-ask me why sometime). Their Zestimates are getting more accurate as they rewrite their algorithms and gather more market data. As a reporting service, Zillow could and should take the national lead.
Lately, I’m starting to see Zillow try to emerge as an advisory firm of sorts which is fascinating to me. I’m not speculating here, watch what’s happening:
I started reading Spencer’s blog with this post about trading commissions; I realized that we had a common background and that we probably speak the same language. This recommendation confirmed that thought.
This was the first time I saw Zillow offering its data as analysis, by Zillow economist Stan Humphries. Then, Spencer Raskoff suggested that Zillow would have prevented the rampant speculation, from 2004-6. Interviews on Bloomberg, radio shows, and CNBC, all “reporting” about the rapid decline, with really cool granular data. Most recently, I spotted Spencer on Bloomberg, reporting about the decline and offering his prognostication about the market. Today, Spencer took a well-deserved pot shot at the NAR economists.
Silly Active Rain chatter? I think not. It’s my opinion that Zillow.com is fashioning itself as the econometrics firm for real estate, I call it “REconometerics” just to give it a name. Where will they take that “new” product? They can:
- Publish the data, like a newspaper, as interesting content for readers,so that Zillow can sell more ads.
- They can create an investment advisory service, helping wealthy landowners properly manage their real estate assets.
- They can create a research service/newsletter, destined to become an industry standard.
Maybe I’m wrong but I’m watching the wonks at Zillow start to make market predictions. I’d like to see them publish their predictions rather than criticize the other economists. We can start right here, on BloodhoundBlog Radio.
Jim Rake says:
Brian – Rascoff’s use of Beck’s video is priceless. Would imagine NAR is doing all it can to distance itself from its former employee, David Lereah.
The larger problem, as Spencer says, is “that NAR has sorely damaged their credibility as a source for housing information by refusing to acknowledge that we’re in the midst of a horrific housing downturn.”
And, then Beck, who many consider to be competent and fairly objective, ends his piece by advising his viewers “that if you want honest advice about your home, don’t listen to the people who are trying to make a living selling them”.
While NAR’s efficacy is certainly a topic many of us enjoy discussing, one wonders what mechanism they use to ensure the accuracy (truth) of the material their spokespersons/employees produce for publication.
August 30, 2008 — 8:34 am
James Boyer New Jersey says:
Great article, I also have been noticing that Zillow seems to be evolving and your article made that fact all the more clear in my head. I tend to disagree with Spencer Raskoff ideas that having Zillow and all the web tools we have now but did not have in 2004 would have prevented the bubble and then bubble burst in the real estate markets in many parts of the country.
August 30, 2008 — 2:27 pm
Barry Cunningham says:
we covered this way earlier in the week…….was beginning to think most in the RE blogosphere did not have the stomach to watch..it was unreal
August 30, 2008 — 3:01 pm
Louis Cammarosano says:
It might be a good move on Zillow’s part to focus more on the content side of the business.
It would differentiate themselves from the countless listings sites trying to make money selling ads around listings.
If done correctly Zillow could become the bankrate of real estate information.
Dueling digs and ezads are probably not big money makers.
BTW- the contention that had Zillow content been available back in 2004 we could have avoided the rampant speculation is ludicrous.
Having information available never stopped people from acting irrationally. If Greenspan when he was Chairman of the Fed could not do it, I don’t think Zillow content would have any greater powers of persuasion.
But then Spencer and the Zillow crew ARE good at media….
September 1, 2008 — 7:23 am
Dan Sullivan - Denver Lofts says:
While I think that Zillow still has plenty of problems, it is quickly moving in the right direction, and within a year or two, will be the go-to site for neighborhood sales data and analysis. Easily something that our MLS systems could accomplish, but won’t bother to.
September 4, 2008 — 1:52 pm
Spencer Rascoff says:
Interesting post Brian. There’s no question that at Zillow, we’re focused on using our data in the media. I (and several colleagues) spend a lot of time on that. As you pointed out that I pointed out, I think NAR has left a big gaping hole for someone (hopefully Zillow) to be the voice of objective data in the real estate and mortgages space.
On the hypothetical thought experiment about whether the housing run-up and subsequent debacle would have been less extreme had the Internet been more highly evolved a few years ago… Louis has a good point that people still act irrationally even in the face of plenty of information. But I still think that a lot of bad decisions were made because people didn’t have enough information. As an example, many buyers during the run-up got caught up in the frenzy, thinking to themselves that they had to bid more than the next guy for a listing or else the house would be gone tomorrow. If those buyers could have easily looked up that home on the web and seen a price graph of that home’s value over the last 10 years, at least some of those bidders would have said to themselves “wait a minute, what the heck am I doing here? Why am I bidding $600K for a house that was only worth $300K 2 years ago?” Surely some people would still have gone a little nutty, but I do think the ascent and descent would have been less steep. My $0.02.
September 10, 2008 — 9:55 pm
Brian Brady says:
“I think NAR has left a big gaping hole for someone (hopefully Zillow) to be the voice of objective data in the real estate and mortgages space.”
You’re naturally suited for such a thing. I had a great conversation with David and Drew tonight about how Zillow can suck the air, for pricing/lock reports, out of the mortgage space.
I can’t help you do it in the real estate space but you could make more predictions. Zillow’s value as a data aggregator is established. Will you move it along to become a data analysis firm?
September 10, 2008 — 10:09 pm