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Comparing Traffic: Homes for Sale vs. Apartments for Rent

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Comparing Hitwise Data

Hitwise.com is an analytics firm constantly combing data for gems like the chart above. In this particular chart, you can see queries for “homes for sale” versus “apartments for rent” and the reason this is intriguing is that query data going back over the past five years has been an almost dead-on indicator for the real estate market. That said, is data showing that despite a spike in interest in homes for sale in February and again around April that “apartments for rent” surging is a swing in the pendulum? Sure, why not?

Who This Benefits

Who benefits from a leveling of the interest in “homes for sale” versus “apartments for rent”? REITS or Multi-family investors are likely to glow at this news, as are their agents. What you might not be thinking about is the people searching for “apartments for rent” are the lookie-lous of yesteryear. The days of starry eyed “I wanna look at 40 homes for fun then drop you as an agent because I wasn’t *really* going to buy” are over. For now, at least.

People are discouraged and while that perception is often wrong (Austin is an example of a thriving city where people are still scared due to national news), could this be a weeding out of the people who should be discouraged? Those who can’t qualify under new mortgage rules anyhow? Those who want to look two years in advance? Those that have no money to put down? Those that think they can afford $200k when really they only qualify for $80k?

We’ll see what this indicates in terms of behavior in the long run. My feeling is that people are comparing the two options right now which is another possible reason for an equal interest in the U.S. between apartments and homes. What do you think this raw data could mean?

Lani is the Chief Operating Officer at The American Genius - she has co-authored a book, co-founded BASHH and Austin Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

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16 Comments

16 Comments

  1. It means we need to keep our noses to the grind stone developing long term relationships with clients, customers and prospects 🙂

    I know I know, not the answer you were looking for!

  2. Benn/Ag

    June 10, 2009 at 10:32 am

    Christina, actually, you’re right, what I feel most agents should get from this is they need to take their reasons to buy to renters directly- if there was ever a use for direct mail, I think it’s now.

    Although many have kicked their mailing habits, maybe it’s time to take up light mailing with some pull marketing, with reasons and ways to engage said agent online, etc…

    It’s all about the 1.5, not the 2.0

  3. Rob Hahn

    June 10, 2009 at 11:25 am

    Um, the Hitwise data is showing a pretty close correlation between “homes for sale” and “apartments for rent” searches. I’m not seeing the divergence you might be talking about. If you mean the gap between “sale” and “rent” have narrowed, that’s true — but I’d still be concerned that the “rent” searches haven’t crossed the line over and above the “sale” searches.

    If anything, I’d be concerned about June, which shows a dip in “rental” searches compared to “sale” searches. We’ll have to wait to see what July and August reveal, I suppose.

    -rsh

  4. Benn Rosales

    June 10, 2009 at 11:29 am

    Rob, that would only mean folks are renewing rather than actually moving- in other words, waiting out the storm. There’s opportunity in that there data in many communities around the nation.

  5. Lani Rosales

    June 10, 2009 at 11:33 am

    Rob, I was referencing the gap narrowing.

    I’m surprised the data is this steady, honestly.

  6. Matt Carter

    June 10, 2009 at 7:17 pm

    Google “Hitwise blog” or go to “Resources–>Analyst Blogs” from the home page to see what Hitwise’s Bill Tancer has to say about the numbers.

  7. Lani Rosales

    June 10, 2009 at 7:39 pm

    Matt, the image and the word “Hitwise” are linked to Tancer’s article on the data (their formal trackback doesn’t work, it’s been updated to a direct link, thanks).

  8. Matt Carter

    June 11, 2009 at 11:49 am

    Here’s a couple of other attempts by Hitwise analysts to correlate the frequency of certain search terms with homebuyer behavior, including queries that include the word “foreclosure” and an exploration of the possible link between searches for “homes for sale” and sales of existing homes.

    Hitwise found a “very strong correlation” between searches for homes for sale and sales of existing homes, but that was more than a year ago (both were on the wane at the time). Be interesting to see if the correlation is still as strong — you would think searches might have picked up more than sales.

  9. Missy Caulk

    June 11, 2009 at 9:12 pm

    Lani, they are definately comparing in Ann Arbor. You can no longer sell here in 3-4 years and be guaranteed to not bring money to closing.

    When our residents and med school students move in they want to buy but are counting the costs.

    I get tons of leads for rentals but doing a rental is twice as hard as a Realtor because we are acting as lender (pulling credit, etc) for 1.2 mo rent so it is hard to gets agents even on my team to want the hassle.

    Just being honest.

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Austin

Austin tops the list of best places to buy a home

When looking to buy a home, taking the long view is important before making such a huge investment – where are the best places to make that commitment?

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Looking at the bigger picture

(REALUOSO.COM) – Let us first express that although we are completely biased about Texas (we’re headquartered here, I personally grew up here), the data is not – Texas is the best. That’s a scientific fact. There’s a running joke in Austin that if there is a list of “best places to [anything],” we’re on it, and the joke causes eye rolls instead of humility (we’re sore winners and sore losers in this town).

That said, SelfStorage.com dug into the data and determined that the top 12 places to buy a home are currently Texas and North Carolina (and Portland, I guess you’re okay too or whatever).

They examined the nerdiest of numbers from the compound annual growth rate in inflation-adjusted GDP to cost premium, affordability, taxes, job growth, and housing availability.

“Buying a house is a big decision and a big commitment,” the company notes. “Although U.S. home prices have risen in the long term, the last decade has shown that path is sometimes full of twists, turns, dizzying heights and steep, abrupt falls. Today, home prices are stabilizing and increasing in most areas of the U.S.”

Click here to continue reading the list of the 12 best places to buy a home…

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Housing News

Average age of houses on the rise, so is it now better or worse to buy new?

With aging housing in America, are first-time buyers better off buying new or existing homes? The average age of a home is rising, as is the price of new housing, so a shift could be upon us.

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aging housing inventory

The average home age is higher than ever

(REALUOSO.COM) – In a survey from the Department of Housing and Urban Development American Housing Survey (AHS), the median age of homes in the United States was 35 years old. In Texas, homes are a bit younger with the median age between 19 – 29 years. The northeast has the oldest homes, with the median age between 50 – 61 years. In 1985, the median age of a home was only 23 years.

With more houses around 40 years old, the National Association of Realtors asserts that homeowners will have to undertake remodeling and renovation projects before selling unless the home is sold as-is, in which case the buyer will be responsible to update their new residence. Even homeowners who aren’t selling will need to consider remodeling for structural and aesthetic reasons.

Prices of new homes on the rise

Newer homes cost more than they used to. The price differential between new homes and older homes has increased from 10 percent traditionally to around 37 percent in 2014. This is due to rising construction costs, scarcity of lots, and a low inventory of new homes that doesn’t meet the demand.

Click here to continue reading this story…

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Housing News

Are Realtors the real loser in the fight between Zillow Group and Move, Inc.?

The last year has been one of dramatic and rapid change in the real estate tech sector, but Realtors are vulnerable, and we’re worried.

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Why Realtors are vulnerable to these rapid changes

(REALUOSO.COM) – Corporate warfare demands headlines in every industry, but in the real estate tech sector, a storm has been brewing for years, which in the last year has come to a head. Zillow Group and Move, Inc. (which is owned by News Corp. and operates ListHub, Realtor.com, TopProducer, and other brands) have been competing for a decade now, and the race has appeared to be an aggressive yet polite boxing match. Last year, the gloves came off, and now, they’ve drawn swords and appear to want blood.

Note: We’ll let you decide which company plays which role in the image above.

So how then, does any of this make Realtors the victims of this sword fight? Let’s get everyone up to speed, and then we’ll discuss.

1. Zillow poaches top talent, Move/NAR sues

It all started last year when the gloves came off – Move’s Chief Strategy Officer (who was also Realtor.com’s President), Errol Samuelson jumped ship and joined Zillow on the same day he phoned in his resignation without notice. He left under questionable circumstances, which has led to a lengthy legal battle (wherein Move and NAR have sued Zillow and Samuelson over allegations of breach of contract, breach of fiduciary duty, and misappropriation of trade secrets), with the most recent motion being for contempt, which a judge granted to Move/NAR after the mysterious “Samuelson Memo” surfaced.

Salt was added to the wound when Move awarded Samuelson’s job to Move veteran, Curt Beardsley, who days after Samuelson left, also defected to Zillow. This too led to a lawsuit, with allegations including breach of contract, violation of corporations code, illegal dumping of stocks, and Move has sought restitution. These charges are extremely serious, but demanded slightly less attention than the ongoing lawsuit against Samuelson.

2. Two major media brands emerge

Last fall, the News Corp. acquisition of Move, Inc. was given the green light by the feds, and this month, Zillow finalized their acquisition of Trulia.

…Click here to continue reading this story…

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