Spencer's Blog

Homeowners are delusional

2008-08-06T20:23:59Z

This won't be new news to any of you listing agents working with frustrated sellers, but most homeowners haven't adjusted their expectations of value yet. Everyone realizes that house values have declined; but no one wants to believe that their home has declined in value. Here's the data from ZillowBlog to prove just how delusional homeowners are when they ask themselves "what is my house worth?":

62% of U.S. Homeowners believe their home’s value has increased or stayed the same in the past year. In reality, 77% of U.S. homes have declined in value over the past 12 months.
While only 38% of homeowners think their home has declined in value, about 77% of homes actually have declined in the last year
People living in the West seem to be a little more realistic, with 44% believing their home’s value has increased (28%) or stayed the same (16%); however more homes in the West have lost value, with 88% of Western homes declining over the past year.

Here's today's front page of the San Francisco Chronicle business section:

If you’d like to learn more about what’s happening to real estate prices in your area, next week we’ll release our Q2 Real Estate Market Reports, which chart home value changes for 165 metropolitan statistical areas, the largest report of its kind. New this quarter, we’ll also look at % of homes sold for a loss, and % of home sales that were foreclosures.

You can tune in to our Q2 Market Reports Conference Call on August 12 at 11am PT, to hear Dr. Stan Humphries discuss these reports as well as some more findings from today’s survey. To sign up for the Web version of this call, visit here. Or, you can dial in directly at 1-800-240-2430.

What's new at Zillow?

2008-08-04T20:57:44Z

It has been too long since I've written a post explicity about Zillow. I try to keep you current on what's going on at my company, but I'm pleased to tell you that things are happening so quickly I have hardly had time to keep up.

So here's a recap of what's new at Zillow over the last few months:

Broker Advisory Board: Zillow announced the creation of a newly formed Broker Advisory Board, full of industry heavy-hitters.
- Steve Baird, president and CEO of Baird & Warner
- Ken Baris, president of Jordan Baris
- Bob Blount, CEO of RE/MAX Allegiance
- Sherry Chris, president and CEO of Better Homes and Gardens Real Estate
- Craig Cuyar, senior VP and CIO for the Realogy Franchise Group
- Dan Elsea, president of brokerage services for the Real Estate One Family of Companies
- Pat Lashinsky, CEO and President of ZipRealty
- Mike Montsko, president of the Weichert Lead Network
- Harley Rouda, Jr., CEO of Real Living, Inc.
- Mark Woodroof, managing partner for Prudential Gary Greene

We created an "All Star" badge for our top contributors. This badge can be seen on the site with the blue ribbon, but it can also follow you to your website much as i've done here on this blog. Look at the All Star badge on the right side of the blog.

The All Star Badge, and our two other badges ("View My Profile" and "Confirmed Lender") all come with co-branding which means your site's visitors that click through will get to see your pretty face follow them around Zillow. Here's Brian Brady talking about this, and here's an interesting discussion about it.

Zillow Mortgage Marketplace now offers free widgets with mortgage rates and co-branding. See the right side of this blog for examples.

While we're on the topic of mortgage rates, Zillow Mortgage Marketplace continues to grow like a weed. We now have over 3,200 lenders participating, and they have provided over 320,000 mortgage quotes. We've also added features like a mortgage calculator and mortgage rates.

We added "street view" to our site, giving even more photos of most homes in the country.

We added "email search results to a friend" which allows you to send search results to your client (if you're an agent), to your agent (if you're a homebuyer) or to yourself if you're like me.

We launched a saved search email feature so homebuyers can now receive email updates when new listings match their search criteria. This makes home shopping on Zillow much easier.

Zillow now has over 3 million listings of homes for sale, a 6-fold increase since the beginning of 2008.

We added the ability to embed a Zindex graph from our local pages onto your blog. So for example, on this San Francisco real estate page, you can click on the "embed" next to the graph to get the code for the chart.

We added RSS for profile pages, so if you want to keep track of me (Spencer Rascoff) or DavidG or Drew, you can add us to your RSS.

It has been a busy summer!

Finally, for a great primer on how agents can use Zillow to their advantage, please check out Sara Bonert's excellent post.

NPR interview with me

2008-08-01T13:16:07Z

Here is a half-hour radio interview with me that just posted online but won’t air on the radio until September. I did the interview a few months ago in New York. It will air on the XM/Sirius NPR station (though not on terrestrial NPR).

It's mostly about my Hotwire experience, but we also discuss real estate a bit. Towards the end, I give ActiveRain a nice plug.

It’s a very cool radio show – she interviews entrepreneurs for about 30 minutes. The host (Jess Harris) is a friend of mine from college. Mine is the last interview that she’s doing because she just left to join a hedge fund, but the old shows are very cool. But you’ve probably heard me say that before. I found the Baby Einstein and Richard Branson ones very interesting. Ian Schrager also. And of course, Rich’s is great also. ;)

Entertainment companies facing huge challenge from the Web

2008-07-31T11:49:18Z

Really interesting research report from Lehman Brothers about how the Internet is affecting the entertainment industry. In short, the analyst concludes that digital revenue won't make up for the decline in traditional revenue, so entertainment companies are in trouble. It sounds a lot like the challenge facing newspaper companies as they try to transform their businesses for a wired world.

From the report:

"We believe the feature film and TV content businesses are on the verge of structural changes that appear destined to impact the core revenue and profits of Entertainment business models. In our view, the structural shift created by ubiquitous technological change -- a shift that has materially impacted the music industry -- could also disrupt the core economic models of the creators of the majority of film and TV content. So far, cannibalization from digital distribution has remained limited, as DVD sales were down only 4.7% Y/Y in 2007, according to the MPAA. But we believe "packaged media" is a declining business and find it difficult to quantify how new digital revenue streams could even begin to offset the $24 billion/year U.S. retail home video market -- a market which we believe has just entered secular decline... On the Television side, not only have DVD sales of TV shows helped recent profitability, but digital disruption of TV takes place in our homes in the form of DVR's, which are now roughly 26% penetrated in the U.S. and make traditional ad-supported broadcast television an increasingly ineffective way to advertise to consumers."

Here's the scary takeaway: "We of course hope that the industry can mitigate the structural problems that the Internet and digital distribution have presented to Hollywood, but at this time we believe the Entertainment industry itself may be unprepared for digital media as a disruptive technology."

Congratulations to Active Rain

2008-07-22T11:22:32Z

Congratulations to Active Rain and its community of members. The member counter in the upper right indicates that they (we?) are about to top 100,000 members. When I first started blogging on AR I remember the counter being around 50,000.

Congratulations on the stellar growth.

What me worry?

2008-07-22T11:17:38Z

Recession? Layoffs on Wall Street and Main Street? Banking crisis? Don't tell it to these people.

I'm in Palo Alto today to give a speech about Zillow at the UBS Global Technology Conference. The place is jampacked with venture capitalists, institutional investors and tecnology analysts. Blackberrys and iphones are buzzing, and there's altogether too much networking happening over breakfast plates of pineapples and melons. If we are in the midst of a recession (which we are, by the way), then no one has told these people.

Which brings up another imponderable I've been noodling. I keep reading that people are driving less because of high gas prices, and I also keep reading that people are working less because they're losing their jobs. So what exactly are they doing? I guess they're looking at "real estate porn" more -- Zillow's traffic is WAY up this year. Still, I wish it were under more pleasant circumstances.

I've gone RSS and I'm not coming back

2008-07-16T16:29:16Z

I'm an email junkie, not to mention a time management junkie. So when I started seriously reading blogs about two years ago I decided to subscribe to blogs via email. As the number of blogs which I followed grew close to 100, this became challenging -- I was getting 100 emails a day just from blogs, on top of the 400-500 emails a day that I get on other work-related matters. Ouch.

So for a few months I used RSS into my personalized homepage on MyYahoo. I found this to be less than ideal as well because I frequently spend the whole day in meetings and I just use my Blackberry to do email. So I wasn't able to use the web to go to MyYahoo, and therefore I couldn't stay current on my reading. So I went back to the email system. Sigh.

A few weeks ago though I changed everything to email RSS, and I'm here to tell you that it was a brilliant move.

What to do:

1. If you're on a blog that says "RSS" or "RSS 2.0", click on it.

2. Your browser will then put the blog onto whatever your personalized homepage is. For me it automatically comes onto MyYahoo. I assume igoogle and other homepages are the same. Here's what I see:

3. Click "Keep It".

4. Click the wheel icon -- the middle one in the upper right of the module. Then click "About".

5. Copy the "content url"

6. Now you can either delete the blog from your homepage by clicking the X in the corner, or you can leave it there. If you intend to delete it from your homepage, then you could also have gotten the RSS url by right clicking on the "RSS" icon on the blog in the first place and clicking "properties":

7. Now go to your Outlook and where you see "RSS Feeds", right click it and "add a new RSS feed". Then paste the url and you're all set. You can create folders just like you do for your email.

Here's what you'll see:

The advantages of reading blogs this way are almost too numerous to count. I can't believe it took me this long to switch over. They include:

1. You see new posts as they are published.

2. You can forward individual posts to others via email.

3. If the blog is mult-author, you can pay particular attention (or not) to specific authors.

4. Your email inbox doesn't get cluttered.

Try it. Trust me -- if you monitor more than a handful of blogs, you'll be glad you did.

Home price trends: US vs Europe

2008-07-15T23:14:23Z

Deutsche Bank published an excellent report comparing US home prices with Europe. Here's the key takeaway:

"US home prices will decline significantly further in 2008, begin to stabilize in the first half of 2009, and remain depressed for some time thereafter. As for Europe, house prices are likely to stabilize in 2010 at the earliest. Assuming a similar shape of the house price cycle as in the early 1990s, the next up-cycle in house prices is unlikely to occur before the middle of the next decade in either the US or Europe."

Let's hope Deutsche Bank is wrong, though I doubt they are.

Charlie Rose interview of Jamie Dimon

2008-07-11T18:01:55Z

Fascinating interview by Charlie Rose with Jamie Dimon, CEO of JPMorgan. Hard to watch the interview without thinking to yourself: Jamie Dimon is a stud.

H/t to Paul Kedrosky.

My Remodel

2008-07-07T23:52:21Z

I blogged about my bathroom remodel over on Zillowblog.

Some interesting things I read over the last few weeks

2008-07-07T23:47:40Z

Get ready for $7 per gallon gasoline: CIBC research
Interesting NYT article on a lawsuit in which lawyers are using Google Trends to show the relative query volume between obscene and non-obscene keywords on google.
Hilarious email from Bill Gates in 2003, frustrated with his computer and with Microsoft products

I'm back (and my apologies)

2008-07-07T23:43:52Z

Have been offline for a few weeks. Vacation + backed up on email. But I'm back now, and I look forward to getting back in the saddle.

Sorry.

Should I challenge my tax assessment?

2008-06-13T01:45:50Z

I just got my new tax assessment in the mail and it went way up -- from $856,000 to $937,000. My Zestimate is still much higher though.

Should I challenge my tax assessment? Does anyone out there know what the usual outcome is in King County (Seattle) for challenges? Might my assessment end up HIGHER if I challenge it?

Free admission to Inman Connect (with a catch)

2008-06-04T14:58:30Z

Write a great blog post about how you or a client can use Zillow and the top three will get free admission to Inman Connect, the industry's best networking event for bloggers.

Click here to learn more on ZillowBlog.

On CNBC tomorrow morning (5/27)

2008-05-26T22:29:35Z

Around 8:10am EST, 5:10am my time. Better get to sleep soon...

Talking about real estate. (What else?)

Update: here's the video.

Zillow Mortgage Marketplace - is it working for lenders?

2008-05-22T14:01:33Z

A few weeks ago I posted some stats with early results from Zillow Mortgage Marketplace. That was on April 25, when Zillow Mortgages was 3 weeks old. It has been another month, and the product continues to grow like a weed.

After 7 weeks, here are the stats:

We've also added leaderboards of the top lenders:

And rate tables showing the current mortgage rates in the Marketplace:

But the question everyone wants to know is: does Zillow Mortgage Marketplace deliver for lenders? Are the 2,231 lenders providing quotes each day getting business?

Since we're not in the middle of the actual transaction, it's hard for Zillow to know whether we're helping lenders close business. However, we've looked carefully at the repeat rate of lenders -- are they increasing or decreasing the rate at which they're giving Loan Quotes? We'll publish some of that data soon, but in the meantime: it's looking very good.

The other way for us to figure out if this is working is by just asking borrowers and lenders. We've just completed our first borrower survey, and the results are very good. (A lender survey will be upcoming.) My colleague Mary Miller blogged about the results over on ZillowBlog, but here are the two numbers you need to know:

more than 40% of borrowers contacted at least one lender
about 30% said their either closed or plan to close a loan soon with a lender from Zillow Mortgage Marketplace

These mortgage leads are real!

For a more specific drilldown, try the following:

1. Goto www.zillow.com

2. Click on the "mortgage" tab. It will take you to the mortgages section.

3. On the right side, use the dropdown. The default is "United States", but change it to a state like California and click "go". It will take you to a page on California mortgages.

4. The default sort order here is by date created. So the first block was created most recently. You can change the sort order to drill down in different ways:

5. Then drill down to particular loan requests and scroll all the way down to see the Loan Quotes. I find this fascinating -- it'you're witnessing a completely transparent financial marketplace. Hours of rate voyeurism for your viewing pleasure.

Realty Times: "Realtor.com isn't bringing any game." Ouch.

2008-05-21T09:30:44Z

Blanche Evans, the well-regarded senior editor of Realty Times, and one of the 25 Most Influential People in Real Estate according to REALTOR Magazine, tears into Realtor.com today in an editorial.

She writes: "For a tech company, Realtor.com is surprisingly out of touch. Why should agents be excited about paying Realtor.com for privileges they can get for free elsewhere? There are other sites like Zillow climbing up Realtor.com's back that offer agents a lot more for free. ....On Realtor.com, they don't even get their names on their listing unless they pay enhancement fees. Other sites are willing to provide all kinds of enhancements ---including agent profiles for free. Zillow takes listings from feeds and individual. No limit on photos, tours, videos or anything else. They even provide agent profiles for free. It's such a good deal, Zillow has seduced major franchisors Realogy and Keller Williams, along with ZipRealty, Prudential California and dozens of top regionals. In six months, they've added two million listings and counting."

She concludes: "Zillow isn't the number one real estate destination site yet, but it's got momentum. Realtor.com isn't bringing any game. They need to come up with something better than four free photos, and quick."

Thank you Blanche for the kind words and astute analysis.

Fascinating foreclosure data

2008-05-20T23:15:23Z

There are a lot of ways to report on foreclosure statistics, most of them inaccurate. This is because most foreclosured homes go through several steps on their way to the final sale from the bank to a new owner, so statistics frequently overcount actual foreclosures.

I think the best way to look at foreclosures is to measure what % of sales in a given time period were sold by a bank versus sold by a regular (non foreclosed) seller. This measure helps show both the size of the foreclosure problem AND its size relative to the non-foreclosure market.

There is a lot of great discussion about foreclosures going on at Zillow in our "Discussions".

So without further ado, here are some fascinating charts. I have these for every county in the country, so if you want to see yours, just email me.

Here's the entire US (reminder -- here is a lot of data on US house values):

Foreclosures in Maricopa County (Phoenix) (and again, a reminder -- here is data on Phoenix real estate)

Los Angeles County foreclosures (and here's data on LA real estate):

Talking Seattle house prices, Rainier Club lunch on May 19

2008-05-15T22:26:36Z

No lunch plans for Monday? Come be my guest at the Rainier Club in downtown Seattle at a gathering of the Real Estate Roundtable. Dr. Stan Humphries (Zillow's head of data & analytics) is the guest speaker. He'll be comparing the Seattle residential real estate market with the rest of the country.

While supplies last.

Please email me at spencer AT zillow DOT com to rsvp.

Keller Williams adds their listings to Zillow

2008-05-08T11:52:35Z

I'm pleased to tell you that Keller Williams, the fourth largest real estate franchise in North America (with 650 offices and 73,000 associates) is now sending their listings to Zillow. If you're a Keller Williams agent, this means that you no longer have to manually upload your listings to Zillow. Instead, they'll come automatically via a listings feed.

From the press release:

"Our agent-centric business model means we are committed to providing our agents with the best marketing platforms possible," said Cary Sylvester, director of technology with the Keller Williams Realty International Service Center. "The Zillow Listings Feed program is a tremendous marketing opportunity for our agents and their sellers. Add to that the fact that two-thirds of Zillow's five million users are in the market to buy or sell now, or plan to within the next one to two years, and our agents are tapping into an audience that needs them."

"We're also proud to say that because of our 'My Listings, My Leads' lead routing philosophy, all the leads generated from our agents' listings on Zillow will go directly to the listing agent for free," added Sylvester.

Zillow now has over 2.2 million listings, and we're proud to have Keller Williams listings among them.

Radio interviews about housing prices

2008-05-07T11:11:01Z

I spent 6 hours today (from 3am until 9am my time!) doing radio interviews about house prices around the country – Columbus, Akron, Tampa, Pittsburgh, New York, Portland, Grand Rapids, Boston, Denver and several others. Here are some observations:

While nationwide homeprices are down 8% y-o-y, there are obviously huge variations by city. (Many of you have commented this on my previous post.) My interview with a Pittsburgh radio station was pretty upbeat – after all, they’re only down 2% and parts of the Pittsburgh area are actually still appreciating. Contrast that with the doom and gloom affecting Tampa (17% decline, and 3 out of 4 buyers from 2006 are now upside down on their loan).

There is an extraordinary amount of interest in real estate and mortgages. Extraordinary. Each of these radio news programs devotes a significant amount of their airtime to real estate and personal finance issues. Our industry is right in the sweet spot of several national issues, which have resulted in so much press coverage: the national recession, the price of gas (and how it affects home values in suburbs), the presidential election, the weak dollar, the writedowns on Wall Street due to subprime loan exposure, the Fed's actions on interest rates, and much more.

People out there seem to understand that the terms of their mortgage matter as much if not more than the price of the house they're considering. This is a new development. I haven't seen any data on this, but I'd guess that if you asked homeowners 5 years ago what type of loan and rate they have, fewer than 10% would know. I'd guess that now it's closer to 50%.

I detected a lot of early optimism from the interviewers ("so are we almost out of the woods?" "it feels like we're seeing a light at the end of the tunnel"), which I believe is misplaced. Zillow's data shows that each of the last five quarters have had increasing rates of decline, meaning that things are still getting worse. Personally, I think it's much too soon to call a market bottom. The WSJ had an editorial on this yesterday titled "The Housing Crisis is Over" (as Richard pointed out in a comment on the previous post). I wish that I agreed.

The interviews reminded me of something that I take for granted everyday: the extraordinary access to online information available to homebuyers, sellers, and owners. For almost any question that a consumer might have, there is an answer on the internet. Now before you all flame me in the comments, I know that this isn't always a good thing! A lot of those "answers" can be incorrect, incomplete, and/or misleading. Real estate professionals are needed to correct, explain and expand upon those online tools. No doubt.

Most of the markets that I did interviews in this morning have experienced very bad y-o-y declines, but almost all of them still show healthy 10 year appreciation rates. (Examples: Tampa is down 17% this year, but up 8% per year for the last 10 years. Grand Rapids is down 8% this year, but up 2% for each of the last 10 years.) It's important to keep the current downturn in perspective: housing is still a good place to invest your money. What other asset class returns 5-10% a year with only the rare down year, and lets you live inside of it?

I got a lot of questions about "blame" - who's fault is this current housing downturn? While not a very constructive topic, it's human nature to ask this question. And it's my human nature to try to avoid answering it.

Finally, it's worth noting only one of the 20 or so radio interviews that I did today was with a woman; this compares with about 50% among the print interviews and close to 90% of the broadcast TV interviews that I do. Where are all of the women in radio?

Home prices continue to slide

2008-05-06T11:22:26Z

Zillow released our Q1 Home Value Report today -- a comprehensive look at what's happening to house prices nationwide. And it's grim. Here are some highlights (or lowlights):

- nationwide, home prices declined 8% year-over-year, the 5th quarter in a row of declining prices and the largest decline in the 12 years for which Zillow has data

- 5 of the top 10 declines were in California

- 130 of the 160 cities we studied declined; 29 of the 30 largest cities declined (Dallas was the holdout)

- 45% of homeowners who bought their home in 2007 are already underwater on their loan, and 52% of people who bought in 2006 are underwater.

Here is more data than you can shake a for sale sign at:

Conference Call on Housing Prices, 5/6 @ 11am PT

2008-05-06T00:17:33Z

Zillow released our Q1 Home Value report tonight. I'll blog about the findings tomorrow when I have time, but I wanted to give you a heads up that our head of analytics (Dr. Stan Humphries) is hosting a conference call tomorrow @ 11am PDT to discuss the findings. If you're a data junkie, you should tune in:

Dr. Stan Humphries of Zillow will host a conference call this Tuesday, May 6 at 11 a.m. PDT/2 p.m. EDT. To participate, dial 800-218-0713. To download call-related slides, visit the Zillow Press Room at http://zillow.mediaroom.com

Note: Tomorrow's call is mostly for media. There will be another call in a few weeks geared more towards real estate professionals. But feel free to join tomorrow's call if you'd like.

I'll be on Bloomberg TV on 5/6 @ 8:30am EST

2008-05-05T23:16:33Z

Discussing housing trends.

Identity Theft – it can happen to you (or at least to your spouse)

2008-05-05T15:21:38Z

I had read plenty of scary articles about identity theft, but until last week I had mostly rolled my eyes about the topic, figuring that the media was making a bigger deal of the situation than it actually warranted. But last week I started noticing some strange behavior in my wife’s checking account – I knew that she didn’t frequent the Target, Walmart or Old Navy in Huntington Beach CA. Thanks to online banking with Bank of America, I could look at copies of the checks and it was clear that someone else was writing checks against her account. Apparently this is pretty easy to do – if you know someone’s checking account number you can have checks printed that match the bank routing number and account number. In total, someone stole about $1500 -- 10 checks for about $1000 and another 5 illicit direct withdrawal transactions for about $500.

Bank of America was very helpful and made the situation as painless as possible. They credited the $1000 from fake checks right away, but it will be a few weeks before we get back the $500 in withdrawals. It could have been a lot worse.

The lesson here is to keep a close eye on your accounts and report suspicious activity immediately.