REALTY CHECK #3

How’s the market?” is the first question asked when a New Yorker meets a Manhattan real estate broker.  In Q4 of 2008, 985 Coops were sold in Manhattan. In Q4 of 2009, 1,264 coops were sold. That increase of 28.3% marches in tune with the 10 year Q4 average of 1,270. So there is action in the market. But prices continue to decline.

The degree of decline is dependent upon whether the metric is median sales price or average sales price. Although the average sales price declined by 19.6 in Q4 of 2009 (975,049 coops sold) over Q4, 2008 (1,213,382 coops sold), the median price declined by only 6.7% in Q4, 2009 (630,000 coops sold) over Q4, 2008 (675,000 coops sold).

The median is a more accurate measure of broad based market conditions, as “luxury” (higher end) properties skew the averages upward, beyond the market experience of the buyers who reflect street level economics.

Examining Trulia.com gives us a sense of the tenor of our times.

Target Market

OLR is for home buyers and brokers. Property Shark if for home buyers, brokers, attorneys, builders, architects, and property researchers. Both are property-centric. Trulia incorporates and broadens those target markets by deepening the web experience with category data unrelated to specific properties.

Brokers can submit and track listings, write blogs, interact with other brokers and link up with “affiliate partners” who will design web sites and flyers. Buyers may research industry practices, find a broker, compare median and average sale prices in nearby cities and acquire real estate vocabulary skills.

A researcher may wander through and subscribe to so many services and features that he may live the Trulia weblife from the dawning of his curiosity’s first click to the flickering of his midnight candle’s last lick.

The site is so suffused with listing updates and mortgage trend rates, loan evaluators and credit estimators, neighborhood trending and school spending, that once captured, the web visitor feels compelled to ride every horse on the web carousel until he has travelled miles from his original intent.

Trulia is designed to appeal to the widest possible real estate viewing audience. Whatever your original question, your inquisitiveness will be incited more than sated by the plethora of answers to questions it had not occurred to you to ask.

Perhaps this ambitious agenda is due to Trulia’s monetization approach (see below), which demands a maximum number of views by a maximum number of visitors to achieve maximum ad rates, not unlike any broadband or broadcast network.

Functionality

Trulia’s home page exemplifies the difference between function and functionality. The banner slogan across the top of the home page promotes Trulia as “the best place to start your search.” The journey can be circuitous.

The search bar invites the visitor to select a for sale or recently sold category and then request a location, property type, price range, bedroom/bath, and square footage designation. But that primary search objective is almost lost amidst a home page listing of unrequested market data and a tower of display boxes inviting visitors to compare mortgage rates, utilize calculators, get financial advice, find recently reduced homes and “learn more” about Trulia iphone apps. Efficient search is subsumed in a sea of mixed messages. Diversity is good. Confusion is bad.

The many capillary routes do, however, enable the visitor to familiarize himself with broader aspects of the market than OLR or Property Shark might permit.

Novice buyers can familiarize themselves with aspects of the purchase process via Q & A pages, sections on moving, affordability, market trends and closing procedures. Sellers can utilize advice features such as “Top five reasons sales fail,” “10 ways to prepare for a showing,” and “10 things you must know before you go FSBO.” Brokers not only have their properties listed, but receive client listing reports, a useful monitoring tool, and can participate in B to B forums.

Trulia functions as a full-court press real estate resource for the informationally ambitious. Specific data is collected and assimilated on markets nationally, so the visitor can design his own broad based comparative studies, availing himself of the Trulia pricing and history tools.

Another Trulia trademark is its interactivity. The site is about conversation. Between brokers and brokers, between buyers and brokers, between beginners and experts.

The diversity of input and exchange on the site is both strength and weakness, as one feels pulled by diverse participants, advertisers, interrogators and information providers along many data streams. If one can maintain one’s focus, that data can lead along the path of enlightenment. If one enters the site with no objective, one can leave it with no direction home.

Monetization
Trulia’s financial model is based on paid ads from real estate industry servicers and providers. While this can be aesthetically disorienting and functionally inefficient, (as noted above), the information from advertisers can complement the visitors’ search for services.
Additionally the monetization system permits brokers to submit listings for free, increasing the listing inventory for buyers and enabling sellers to experience broad exposure.
Referring to their advertisers as “partners,” implies there is a referral fee arrangement with site sponsors. While Trulia does not charge brokers to list their (unpaid) ads, brokers may pay for highlighted exposures and services with listing partners such as vflyer, which charges monthly fees for its production and design of layouts, widgets, and Flash slideshows.
The ubiquity of advertising on all Trulia pages detracts from the credibility of those pages . . . or at least subverts the notion of their impartiality.
With ads for realty trac, free credit report.com, closing.com and numerous other companies, the site has the feel of a real estate QVC, replete with cheery salesman and simple solutions.
The deceptive aspect of the monetization strategy for the consumer is that the line between fact and fatuousness can be unclear. The solution for the user is to reference Trulia for its data, enjoy Trulia for its conversational mode of interaction, and release Trulia from the expectation of fully credible omniscience.


-Everett Sherman

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