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?
Christina Ethridge - North Idaho Real Estate
June 10, 2009 at 10:16 am
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!
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
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.
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.
June 10, 2009 at 11:33 am
Rob, I was referencing the gap narrowing.
I’m surprised the data is this steady, honestly.
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.
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).
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.
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.