Online land commercial center Zillow today affirmed that it has contracted Errol Samuelson, the previous president of Realtor.com and boss methodology officer of Move, Inc., as its “head industry improvement officer.” Samuelson will take official oversight for the organization’s business-to-business items and devices, including administrations like Diverse Solutions, which helps land executors advertise their business, and Agentfolio, a correspondence stage for purchase side operators and their purchasers.
Samuelson, who has about 20 years of experience in the land business, will report straightforwardly to Zillow CEO Spencer Rascoff. Samuelson turned into the president of Realtor.com in 2007 and joined Move, Inc. in April 2013.
“We’re excited for Errol to join the Zillow gang. We’ve since a long time ago respected Errol for his administration and also his point of view and approach in pushing in the interest of the land business to grasp and influence advancing innovation and times,” said Rascoff in a proclamation today. “We put colossal esteem on cultivating extraordinary organizations and building imaginative items that backing our industry accomplices, and Errol is the ideal individual to lead this new part.”
The move likewise indicates how paramount the B2b business has gotten to be for Zillow, which opened up to the world in 2011. While the organization began as a land quest administration for homebuyers when it started in 2006, it immediately ventured into other land related administrations too. Generally, the organization has finished this through acquisitions. Simply a year ago, for instance, it procured Buyfolio (which has now gotten to be Agentfolio). Differing Solutions was procured in 2011.
It’s been a big day for housing news: building permits rose to a five-year high, and the Case-Shiller Index showed home prices jump a whopping 13.3% year-over-year in September.
It’s impressive data, and it’s easy to think the market has turned back into a runaway train. But looking at these two data points without context might lead you to the wrong conclusion, when in fact, the housing market is slowing down. But that’s a good thing, and here’s why:
Since bottoming in late 2011, the housing market has really bounced back. As recently as this summer, home values were rising 7% year-over-year, according to data put together by our economics team here at Zillow, and some very hot metro markets have experienced annual appreciation above 30 percent, levels not seen since the height of the housing bubble.
For homeowners who watched their home values plummet in earlier years, this has been a boon. At the same time, historically low mortgage interest rates and a slowly but surely improving jobs market helped lure more buyers into the market.
But now we’re seeing things slow down. The Zillow Home Value Index – which is more timely than the Case-Shiller Index – showed U.S. home values falling for the second consecutive month in October. Those were the first consecutive monthly declines in two years. The pace of annual appreciation fell to 5.2 percent, and we expect it to moderate further over the next 12 months, to 2.7 percent.
Historically, homes in the U.S. appreciate at roughly 3 percent to 5 percent per year, so sustained appreciation much above that is a red flag. Additionally, home values were rising much faster than incomes in many areas, and while very low mortgage rates helped plaster over this growing affordability problem, it is becoming more exposed as rates rise. If homes get too expensive for local homeowners to buy, then home prices by necessity have to slow their growth or even fall.
In other words, slow and steady wins the race, and housing is better when it’s boring.
So why the high numbers today? First, Case-Shiller: Zillow Chief Economist Stan Humphries this morning said: “Honestly, I’m just not sure what to make of these numbers. A slew of recent reports, including Zillow’s October data out today, pending home sales and new home sales, all indicate a slowing market with formerly stratospheric home price appreciation rates beginning to fall back to earth. Zillow’s own data, which excludes REO re-sales, shows the same markets that dominate the Case-Shiller indices – particularly some of the California markets – to be cooling. This suggests that Case-Shiller’s inclusion of REO re-sales is heavily skewing overall appreciation in these markets. If people are really focused on REO appreciation, they should take a closer look at Case-Shiller. But I think most people are more concerned about the broader market, and I’m not sure Case-Shiller is doing a good job of characterizing that market.”
And as for the building permits, that’s likely due to short inventory of available homes. Low inventory was one of the drivers of the robust appreciation earlier this year, and there’s been a lot more demand for homes. Now, builders are really beginning to pick up steam in order to meet this strong demand. And as more housing units make their way onto the market, the supply crunch will fade, and some of the huge price increases we’ve seen because of many buyers fighting over few properties will begin to ease.
All of this adds up to a housing market that currently looks much different than even a few months ago, and will continue to evolve and find its footing over the next several months. The key words are moderation and balance, as the market slows to more sustainable and healthy levels.
So today, I’m going to read you series of three short stories. And why’s that? Because I believe that storytelling is at the heart of communities, families and cultures. It’s also at the heart of memories. It’s the most shareable type of content that has ever existed, on or offline. And as a digital marketer, especially here in New York, I believe it’s in the DNA of what it feels like to own a home.
I’m going to share with you some of the things we’ve learned from Corcoran’s digital journey over the past 5 years, and how we’ve been able to aggressively grow our brand during one of the worst housing markets in history, inside of one of the most competitive markets in the world. I’m going to describe how we work with the ideas of customer relevance and empathy, through the idea of surfacing the right content, at the right time, for the right person, in the right place.
But before we get to that, we need to talk a little about online customer experience. As everyone here knows, growing and maintaining meaningful relationships is at the heart of the referral business, and when it comes to working with digital platforms, one of the critical questions to answer is how do you connect the customer with the most appropriate, helpful and targeted message?
How do you ensure that what you’re sending, sharing, posting, tweeting, pinning, linking, digging, filming or even just saying remains relevant in the moment where the customer is actually experiencing it? It’s a challenge increasingly facing by brand marketers, and one that’s a strong counter measure to the increasing volume of content noise online.
Is 7am really the best time to be sharing our open house that’s happening in 5 day’s time? Do those we’re connected to want our market reports sent to them on weekends? Do they care what’s hit the market this week on their birthday? With more and more content accelerating through email, news feeds, streams, apps and websites, there’s no doubt that being able to cut through the noise and rise above everyone else’s content is the key to staying top of mind.
For some context on this, half a billion people use Facebook for over 20 minutes every day, over 100 hours of content is uploaded to YouTubeevery minute, and an average of over 10,000 tweets blast their way through Twitter every second. If that wasn’t bad enough, the poor average American office worker enjoys no more than 3 uninterrupted minutes at their desk at any one time, a direct result of the more than 150 billion emails that get sent every day (thankfully not all of them from Corcoran).
So when we think about this climate, we think about how the customer actually behaves, and look at the information that determines and informs their decision making process. We are
firm believers that data is the soil in which ideas grow. The key data point we focus on is where our customers are spending time online. We believe that time spent, not visitor volume, is a key driver of digital lead generation. There’s a tremendous volume of ineffective real estate marketing approaches which unfortunately assume that the path of the real estate customer is a straight line, gracefully moving from syndicated search to listings, to agent contact, to showings, to closings.
Some call it the conversion funnel, some call it hub and spoke. So beautiful. But so wrong. I believe that the path of the real estate customer, and indeed customers of any product or service, is an inherently non-linear one, and as we know from the highly detailed National Association of Realtors’ Annual Customer Surveys, the window for the process of initially being considered ‘in the market’ to ultimately closing, is on average a two-year process. A window that notably expands in direct relation to markets slowing due to economic factors. Where customers start is a very different place from where they end up.
Now, many of us assume that when we think about real estate search, the role of the portals such as Zillow, Trulia and Realtor.com is an essential one. In our case here in New York, it’s Streeteasy and The New York Times. And while that’s true, what we see is that the use of these platforms is only about the final 6 months of that overall 2 year cycle.
It’s also highly loyalty-driven, these customers make choices about their tools and stick with them. There’s only a 15% overlap between Zillow and Trulia users for example. So each platform has a different audience, marketable to in different ways. For us, we see Trulia to be much more effective in Brooklyn, especially with rentals, over Zillow, which tends to be more Manhattan and sales centric in terms of click-throughs and overall agent contact effectiveness. So many of us in the real estate industry treat syndication as one big lump of leads, but the reality is that the individual nuances for each platform allow for subtle, but effective differences in marketing to surface.
And there’s no doubt that the commoditization of online listing information through the aggressive growth of these platforms has noticeably disintermediated the role of the agent, questioned the value of brokerages, and captured a tremendous volume of online attention.
Customers, especially younger customers such as first-time home buyers are willing, and now able to perform extensive research on their own terms, and in their own time, often becoming more knowledgeable than the agents they ultimately reach out to. They’re also incredibly fickle when it comes to brand loyalty, which can be eroded in a matter of seconds. Already unable to distinguish between most of the national real estate brokerage brands, one poor experience can preclude them working with that brokerage ever again. So in one sense, these portals are where customers are browsing the shelves independently of brands and real estate professionals when they shop, and in enormous volume. At the last count, over 100 homes per second are being viewed just on Zillow’s mobile platforms alone.
But working with this climate is simply table stakes at this point. When we think about the effectiveness of search and syndication, we need to think about what happens in that 18 month research window before someone begins to use these tools. And we need to use a lens of empathy when we do that. What happens prior to someone beginning to focus their search? Before they begin to pick neighborhoods, or enter price, bedrooms and bathrooms into a property aggregator? Before they actively look for a referral? At Corcoran, we work with something called ‘The Zero Moment Of Truth’ which is named after an Insights white paper published by Jim Lecinski, a brand marketing executive at Google. Lecinski talks about how creating a disproportionate volume of mindshare prior to the search process, with particular regard to mobile and social, can aggressively inform and direct a customer’s decision making process.