Real Estate Blogosphere reaching a Ceiling?
Here's a simple question - is the universe of readers of real estate related websites finite and capped? Here is some evidence that points to "yes":
- US internet user growth is maturing... the internet user base grew only 2% since last year... that caps the audience.
While the US has retained its position being home to the world's biggest online population with over 153 million total Internet users, it registered a marginal growth of just two percent in a year.
- Traffic on Zillow.com and Trulia.com, two new national sites on the cutting edge with consumers, remains flat, principally due to the cooling real estate market...
Does the steady state audience mean that real estate blogs will all compete for a limited set of eyeballs? Will the new blogs suddenly find it hard to establish an identity and the rest of the blogs start to see readership dwindle due to the dilution of content? Here is some evidence that audience for blogs and other Real Estate 2.0 applications will continue to expand:
- Morgan Stanley says broadband adoption in the US continues to grow - and real estate sites will benefit because real estate is a visually intensive broadband play with lots of photos and video...
- Online Newspaper Blog Traffic Grows 210 Percent Year over Year - consumers are beginning to read blogs integrated into online newspapers and they'll begin to find the blogs that aren't affiliated with the press.
- Joel and Drew (ok, and I ) are saying Facebook and the social media will "infiltrate" real estate and create the conduits that funnel more consumers into the real estate space. Social media is a natural way to connect real estate professionals with consumers, it's more personal and more trusted than straight search.
Addendum: Realty Thoughts provides more data on the real estate traffic ceiling.
Technorati Tags: real estate 2.0, zillow, trulia, internet usage, broadband, facebook, social media, blogging, blogs
Interesting take on an interesting thought...I think your points are valid as far as a large percentage of the readers of larger or national real estate blogs reaching a plateau. What I mean is that for some of the really big blogs, where else is there to go at this point but sideways (or down but I'm an optimist). At the same time I think there is a smaller sub-culture of bloggers (one which I consider myself a member) that hasn't even come close to tapping the market for readership. In my area (Massachusetts) there are 3 or 4 active blogs that have to do with real estate and all are focused in the Boston market (mine excluded...)
The suburban markets, I think, are just catching on to the idea of blogging as a means of real estate marketing, promotion, etc...and I don't even think it's a trend that has begun to catch on. My blog is only a month old or so and hasn't been ranked by google although I do attach a link to all my email correspondence.
Your post seemed to want to take the wind from my sails but again I think of my market as an exception to the rule.
As a side note, until last month when I started blogging, I had never heard of Zillow or Trulia. I don't think they have hit the east coast yet or at least not the Massachusetts suburban real estate market...
Just my thoughts...
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On the contrary, I don't mean to deflate the expectations of new bloggers and others embracing Web 2.0 interactivity, I'm just being realistic... I'm a believer in Web 2.0 and how the most innovative practitioners (including your new blog, one of the first to focus on commercial real estate) will gain stature over their competition. Recall there are millions of real estate professionals who will still be sending out postcards and advertising on shopping carts.
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Pat,
That is a very interesting article. I also wanted to quickly than you for emailing me that Trulia question last night. I have been trying to determine for some time now, how to estimate the amount of "potential" traffic that I would be able to receive if I was atop the all the major search engines. I remember following the real estate trend online about 2 years back and how everyone was looking to me (at the office) to let them know how many searches per month were being conducted. I watched it slip from 100,000 a month to a simple 20,000, within just 1 years time. Of course, this search string was for Virginia Beach Real Estate and other comparable strings. The internet users may be flatlining finally, but my compitition is still stealing loads of my "wanted" traffic.
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I think the consumer will start reaching out with applications like Trulia Voices. More Web 2.0 interactivity will gain acceptance, particularly with the rise of social media, and consumers will get used to participating in real estate dialogue... your blog will be the beneficiary.
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If web 2.0 companies are supposedly so consumer friendly then why are they not drawing additional traffic?
HomeGain a web 1.0 company, who also has an instant home valuation tool (try it at http://www.homegain.com ) still outdraws Zillow and Trulia combined.
For a discussion on why "HomeGain Beats Zillow" see blog thread.
http://www.futureofrealestatemarketing.com/why-homegain-beats-zillow
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Louis, I can hear your voice here and in the FoREM threads - Web 1.0 works and we're established, but dammit, Web 2.0 gets the buzz.
Yes, I know Alexa is a flawed traffic monitoring vehicle, but the downward traffic trend for Zillow (red), Homegain (blue) and Trulia (green) over the past year demonstrates a contracting online user base for real estate.
Although Homegain is in a great position to upgrade with Web 2.0 features, it would facilitate a direct connection between the Realtors who provide Homegain with its revenue and the consumer. The lead generation business model doesn't benefit, and that's why that model is quite suited to Web 1.0.
So my question is, can Homegain and other lead generation companies show me a business model that projects higher revenues and profitability over the next few years? I just can't see it in the Web 1.0 world where the consumer and Realtor are matched based on the payment of a lead.
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Hi Pat. Good post and overall blog. I am a regular reader of it.
There is a great comment above related to web 2.0 and how we haven't seen mass adoption. I believe it is because sites that have gone to market are still focused on showing the cool technology, rather than making it useful and consumer focused. Zillow is fun to check out but I am not really sure why I would continue to go back to Zillow. Trulia is great if I need to browse listings but if I am not in the real estate market right now, the site doesn't allow me to do anything. In order to experience mass adoption and grow the number of people reading and visiting real estate sites (I firmly believe the universe is NOT even close to being capped), you need to focus on the complete lifecycle of the transaction, need to make the site consumer centric, need to make the site useful for people who are not in the transaction right now. No site has accomplished this just yet.
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Hi David, I enjoy reading the Qube Exchange and look forward to the launch of PropertyQube. Your post on why Web 2.0 will gain acceptance follows the concept thread of this post. I believe that users not in the real estate market have no compelling need to follow real estate online, but they will maintain an inactive interface with real estate via Web 2.0 properties like Facebook. What makes Web 2.0 exciting is when users do become active in the markets and can "go live" with the networks they are creating.
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I view the current web 2.0 companies and the media hype they engender as analogous to all the fanfare that surrounded the original crop of Internet ".com" companies that were going to put traditional retailers and businesses out of business.
Companies like Pets.com, cdnow.com. drugs.com all came out first with great user interfaces, online shopping carts and wish lists. With such an array of features they certainly were going to put "bricks and mortar" stores out of business.
At some point companies like Walmart, Costco, Walgreen's, nordstroms all learned how to put up web sites and then leveraged their superior customer and business knowledge in making their Internet businesses profitable.
The same will happen in real estate. Web 1.0 companies, like HomeGain and "bricks and mortar" franchises like Remax will add web 2.0 features when and as it pays to do so.
Adding heat maps, HVAL tools, blogs, user generated content is not all that difficult. The trick is making those features pay.
Making real estate pay is something that companies like HomeGain and Remax have a long history of doing.
Have Web 2.0 companies like Zillow and Trulia figured that out yet?
Did pets.com or drugs.com ever figure it out?
They got a lot of press in their day and if they were around today, no doubt they would appear in plenty of blogs.
Both the web 2.0 companies and their .com counterparts attracted a lot of investment. Most of the .com investors lost it all.
Adding web 2.0 features to an existing Web 1.0 business' web site will prove no more difficult than was adding ".com" to an established "bricks and mortar's" business.
Business is still business whether its ".com" "web 2.0" or bricks and mortar" and those companies that understand business will be the ones that profit.
The rest is all just noise in blogsphere.
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Louis,
I really did not realize just how smart you were until I read this comment after being directed to it from the latest transparent (technology?) entry.
As you point out, until you actually make money -- it's just a pets.com being funded by other people's money.
More and more agents are starting to figure out that making improvements to their own real estate (domain) is far more valuable in the long run then making improvements to somebody else's.
Expect that number to accelerate..
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Try compete.com for web traffic too
http://snapshot.compete.com/homegain.com+zillow.com?metric=uv
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Considering that I follow about 70 blogs daily, I wonder about separating the stats for consumers and professionals.
There is always the question of early adapters and the "entertainment" factor with new technology.
We have yet to see how the masses will react once they figure out how to use rss to their advantage.
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First of all how do you find the time to follow 70 blogs??? Second, if you could either email me or post them, I'd be interested to know what 70 blogs you follow...I don't want to "bog" down this blog with all of your favorite blogs but I'd be curious to see the list.
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Rob, I'll send you an OPML file of the 80 blogs I follow on my google reader. You can load it in, check it out and either pare it down or delete it if you want... of the 80, about 60 are real estate related...
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Pat,
I do see a major shift in the consumer as they relate to Real Estate in general here in the Portland Or. area. More and more of my clients are coming from sources that are Internet born. I asked Mike as I met him for the first time yesterday how he came to find me. His answer: He was searching on Craig,s list for a hard money lender. There was a link in his search to a post that I wrote that included the subject of Hard Money lenders.
Interestintg article.
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Financial industry has gone through the same changes more than a decade ago with the rise of online discount brokerage firms, websites, blogs and ezines offering financial advice and tips. These two - financial and real estate - industries share a similar future trajectory, with the investment industry slightly ahead of the real estate industry.
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A thought provoking post. I think the answer has to be yes, unless computers find themselves in the hands of more of the world's population and the means to speak to all people is made possible. If zillow or trulia could speak Spanish or Chinese their charts would skyrocket.
Real estate websites will continue to evolve into forms not yet seen, trying to create spaces where human beings can exercise their social nature. But the question remains how to create consumer participation in real estate sites where people are accustomed to looking only when they have a real estate need and then leaving--with no reason to return until the need arises again. This is where sites like Facebook may have the right idea---build a truly social site and then add a real estate component & not the other way around.
Human beings are inherently social but the means of fulfilling that social need may not translate well to looking for a place to live.
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Most real estate blog traffic is other agents and real estate professionals. I think consumers are just beginning to get into searching and accepting blogs as legitimate portals for real estate information. We are just beginning to see production from blogs as a lead generation source. REached a peak? Not even begun!
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Pat looks like the trend you spotted
continued in May-at least according to compete.com
http://snapshot.compete.com/zillow.com+trulia.com+homegain.com?metric=uv
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The interchange between Pat and Louis from Homegain was very informative..fast forward to today and it seems much of what Pat says still rings true. In fact Joe from Sellsius had an interesting study on his site today. Who has the real data?
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Pat: Fast forward - have you found the answer?
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