Beginning Thursday, Redfin Will Not Display Zillow Listings

Redfin received notice late last Friday that on Thursday, February 9, Zillow will no longer be sending us for-sale-by-owner listings and other manually posted listings that we can display on our site.

Zillow primarily gets listings directly from individual brokers, not from the Multiple Listing Services (MLSs) that all brokers use to share listings with one another, so Zillow is governed by different restrictions than we are. This means that we will continue to display for-sale-by-owner listings from other sources, wherever it’s allowed by the local MLS to which we belong.

We aren’t crazy about the decision, but presumably neither is Zillow: Zillow’s listings got 35,000 views on our site alone in January, and many of the people who viewed them ended up on Zillow’s website too. We’ll continue to show Zillow’s Zestimates, mortgage data and any other information from Zillow we can get that would be useful to our customers. The Zestimates drive lots more traffic from Redfin to Zillow than the for-sale-by-owner listings.

Serious Buyers Likely on the Sidelines for Super Bowl Weekend

photo by Giovanni Arteaga on Flickr

Rumor has it a few people in the United States aren’t going to be glued to a TV this Sunday afternoon for four quarters of football. So if you’re selling your home, should you cancel your party plans if an agent calls and wants to show your place?

Redfin rides to the rescue with data that tells the story:

The numbers from 2010 and 2011 shows that sellers are less likely to get the request in the first place. 18% fewer people went on a home tour on Super Bowl weekend than the two weekends before and two weekends after the game. So quantity is clearly down, but what about the quality?

There’s speculation in the real estate industry that the people who do tour on Super Bowl Sunday are the more serious buyers, and looking to buy sooner. However, the data says the opposite! The numbers from 2010 and 2011 show that people who tour on Super Bowl Sunday are 13% less likely to buy one of the homes they tour that day.

Happy Super Bowl weekend!

When The Laws of Supply and Demand Go Haywire

The first month of every year for Redfin is like the first five minutes of a blind date: it doesn’t take long to figure out how the whole thing will go. We track every customer activity in a big database so it’s easy for us to see whether demand is strong right out of the gate.

And it is. While January and February closings will likely be weak, recent charts of early-stage Redfin demand suggest that in a few months sales volume will be just fine. From January to December, visits to our website increased 35%. Customers touring homes increased 26%. Customers writing offers increased 35%.

We aren’t in a tizzy about such growth, because most of it is seasonal. We get big jumps like this every year.

But we are seeing one trend this season that isn’t normal. And it could really crimp sales volume and, by extension, the whole economy. Inventory, which normally starts climbing steeply in January, has just kept dropping. In our wildly popular home-buying classes, which are mostly sold out, the most common complaint is that there’s nothing good to buy.

In some of the biggest counties, there were 30% – 40% fewer homes for sale this January compared to last January, and most counties saw the problem only get worse in the past month:

And the same is true of smaller counties, too; only Chicago has seen an uptick:

We see why this is happening in listing consultations across the country. We sit in people’s living rooms, explaining what they can likely sell their home for, and they just decide to wait a year instead, either because they want more money for their home, or they flat-out need more money just to pay off the mortgage.

The banks have an enormous number of mortgages in default, but, after the robo-signing scandal, foreclosures have been at or near three-year lows because it takes nearly a year to foreclose a property. In Atlanta last year, there was a 13-month supply of bank-owned homes; now there’s a two-month supply.

As a result, the limit on sales volume, which has long been demand, is increasingly now supply. American real estate is, in some places, like a giant store, the shelves half-full, often with damaged goods. Fixing this problem will be hard because it requires a fundamental re-structuring of debt, whereas stimulating demand is often a simple matter of lowering interest rates.

What this means for the individual home-seller is that Tim Ellis was right. Tim, Redfin’s real estate analyst, prepared a comprehensive analysis showing that homes listed in winter sell for more money, faster, with less risk, than homes listed in summer. The findings were so surprising that I delayed their publication for nearly a month, insisting that Tim look at possible confounding factors. After I ran out of reasons to block the report, we published it, but I still didn’t believe it.

But anyone who listened to Tim, and hung a sign in their yard this winter, is probably glad she did. Good listings have very little competition just now in most markets, and plenty of demand. Just this weekend, we sold a Portland home in 48 hours, with four offers coming in all over asking price.

This may change, as many sellers who took their homes off the market before Thanksgiving will be back on the market in February or March, after waiting the requisite 90 days for brokers to market the property as new again. But in many places now, we see a lot of demand, and not much to buy. It would be interesting to hear from real estate consumers and agents alike if your experience has been different or the same.

How to Keep Your Job When You Don’t Know What You’re Doing

The great venture capitalist Ben Horowitz wrote last night about how the investors in his own startup once told him they wanted a real CEO. What struck me about the essay, which was mostly about how Andressen Horowitz helps founding entrepreneurs develop into great leaders, was Ben’s striking response to the insult: he acknowledged the investor was right, that he didn’t have the resources or skills of an experienced CEO.

None of us do, but it’s hard to admit. When, as a founder of Plumtree, I was told by our investors that they wanted a “real executive,” I thought they were simply wrong, discriminating against me because I was young, because my suits didn’t fit, because I never belonged to a fraternity. I thought about what they owed me for the past two years of blood, sweat and tears, not the performance I had to deliver over the next two years.

The difference between my reaction and Ben’s got me thinking what a miracle it was that I survived at Plumtree, and now how I’ve managed to last this long as a first-time CEO of Redfin, which I joined when it was only a few people in an apartment.

It certainly wasn’t because I knew what I was doing. And this is true of Redfin’s entire executive team. Almost all of the executives I work with today have been at Redfin for five years or more. And none of us five years ago had the skills to do the job we were hired to do.

This was mostly because anyone who had those skills would never have worked for Redfin in its early days: Redfin’s website was a Flash-based application that used its own hand-stitched map rather than Google’s, it was fully available in only one market, we had a few hundred thousand dollars in capital, and we were competing for people’s attention with national, richly funded businesses run on open platforms by some of the best entrepreneurs I’ve ever met, at Zillow and Trulia.

Naturally, seasoned executives ran in terror from us. But the Redfin team prospered because of two basic traits:

• We worked hard
• We wanted to learn

The second trait is most important. When I was nearly fired at Plumtree, I was working very, very hard. But mostly I worked hard at proving that I already knew what I was doing. This convinced everyone that I wasn’t interested in learning, and it often made me feel like a fraud; whenever I learned something, I pretended I knew it all along. Our chairman, the great investor Pierre Lamond, liked to say that “I didn’t even know what I didn’t know.”

And this is what he told me when he said I was fired.

I begged Pierre for mercy even though I knew he had a reputation for being Ming the Merciless. And the begging embarrassed him so much he looked away. Somewhere in my blubbering, I said “I’ll learn.” For the first and perhaps the last time in his life, Pierre relented. If I hadn’t got a second chance, I’d probably be a mid-level systems consultant sleeping in a Milwaukee Holiday Inn right now.

These days, it’s very fashionable to keep entrepreneurs around as executives. That’s a good thing. But what’s even better is that this has allowed entrepreneurs to be open about what they want from investors, which is the time and space to learn. If you want to learn, you can learn. And if you work 16 hours a day rather than eight, you can learn twice as fast.

Just make sure you’ve got a Pierre, or a Ben, behind you, and maybe a mentor like John Kunze or Bill Campbell too.

What Happens on a Home Tour Doesn’t Always Stay on a Home Tour

Real estate has a weird side, and we at Redfin think it’s about time the public had a glimpse into it. We’re proud to introduce Real Estate Confidential (@REConfidential), a new Twitter feed that lets the public in on the strange and sometimes inexplicable things our agents encounter when they’re giving home tours.

Of course, we remove the names and identifying information to protect the innocent and quirky, but these are true stories shared directly by our agents. A first dozen covered drugs, sex and aggressive tenants. Here are a few of our favorites:

Real Estate Confidential is just the latest way that Redfin is taking our “there’s-no-such-thing-as-too-much-information” philosophy to the next level. We still have Agent Insights, where our agents who have toured a home give you the inside scoop that you won’t find in the listing descriptions. We still survey every customer and publish every review. And now, there’s Real Estate Confidential, giving the behind-the-scenes dirt on what really happens on a home tour.

Got your own home tour stories to share?  Tweet them to us at @REConfidential!

Law & Order, Special Victims Unit: How To Get “The Man” On Your Side When Starting a Company

Just before I joined Redfin, I’d wanted to start a company but my brother got sick and I fell in love and soon I was in Seattle. What I never forgot was the lawyer who was going to help us incorporate that business, Ilan Lovinsky, a partner at Gunderson Dettmer, and brother of the great Noam Lovinsky.

Ilan may be the savviest mofo I’ve ever met, and yet he’s got soul too, which is just another way of saying he’s not a lawyer so much as the consigliere every CEO hopes her lawyer will be. He’s also a Redfin hound-dog, casing the site daily for listings.

And now today at noon Ilan’s giving a talk at Redfin in San Francisco, as part of a series we’re hosting for Redfin employees on how to run your own startup. Our goal is to attract the kind of people who will one day found a business, to keep them as long as we can, then to launch them into careers of rap-star wealth and profligacy.

You’re invited, to come in person or to dial in.

So far, the series has been one hit after another.

We’ve had Roy Gilbert — former nuclear submarine officer and head of Gmail, Google India and Grockit  – come by to talk about management best practices; he explained how a Twinkie once out-rowed an NCAA Division-I oarsman.

And James Slavet from Greylock gave a five-step tutorial for dazzling a venture partners’ meeting. I went over everything you’d ever need to know about financial statements, in 45 minutes flat. And TellApart’s Mark Ayzenshtat took us deep into the science of customer profiling and re-targeting.

Now Ilan is going to hit the legal ins and outs. This may sound dry to you. But I’ve heard this talk before. In a Sand Hill-road parking lot Ilan once gave me his 15-minute guide on “how not to get f—-ed” and it was like the Businessman’s Book of Revelations.

You can come by in person, to 88 Kearny, 13^th floor, in downtown San Francisco. Or you can just dial-in to a web conference:

Web: https://redfin.webex.com/redfin/onstage/g.php?t=a&d=662069306
Password: redfin

Call: 1.866.625.9936
Code: 6223346

If you’re coming by in person, please sign up here by 10:30 a.m. today so we can order lunch for you. I’ll be there with a Music-Man baton and a top-hat to introduce Ilan and slurp from his boob of wisdom. If you have a great idea for Redfin, we can chat before or after.

Twelve Months of Tech-Savvy Hunkiness

Absurd Ideas that Have Gone through My Mind While Working at Redfin over the Years:

• Goth Fridays
• Everyone Wear Red Pants Just Like Glenn Day!
• Everyone Dress like Vice President of Real Estate Operations, Scott Nagel Day! (We actually got this one to happen…)
• Redfin: The Movie (Casting occurs with every new hire…)
• The plot for Redfin: The Movie. Must include international intrigue, car chases, explosions, and most definitely a martial arts master, a dog side-kick or both.
• The Men of Redfin I.T. Calendar

Several of us joked about making a Men of Redfin I.T. Calendar over lunch a few years ago. We created multiple scenarios such as, “A voluptuous Ken in a provocative pose in the server room!” We laughed our asses off and went back to work.

But the joke always resurfaced. So this year I simply walked over to their man cave/office and asked them if they’d be willing to pose for a calendar. Here are their responses when individually asked:

Ken: Sure
Daniel: Uh, I guess so. Sure.
Andy: I guess so. Okay.
Mac: Why would anyone want to look at THAT?!??
Eric: Hell yes. I am so in.

A disturbingly enthusiastic Glenn Kelman even offered to pose for November. (“Um, yeah. Thanks Glenn, but I really want to give the I.T. guys their moment in the sun, you know what I mean? But I’ll definitely keep your offer in mind.”)

Baby New Year/I.T. Manager Eric

We printed up and handed out 300 Men of Redfin I.T. Calendars for our annual company meeting in Vegas last week. Anyone who wanted one (???) donated any amount they saw fit to MIND Research Institute. We chose MIND because they do amazing work, the money sent to them goes to the right places, we like math and computers, and the guys of I.T. really liked them. We just hope they’ll accept our final check given the unconventional fundraising method.

Winter Wonderland “Twins” of Systems Analyst Mac

Shot over the course of a month around the office using thrift store props and crappy IKEA floor lamps, these images would not have been worth diddly–squat if it weren’t for a little help from my Redfin friends. Hippie Goddess Lily Supardan brought her expert photographer’s eye and Graphic Designer Angela Salvo magically transported our studs to idyllic shires, romantically secluded beaches, and winter wonderlands through the miracle of Photoshop.

Colossal and eternal THANK YOUS to our heroes of the I.T. Department: Ken Brush, Eric Hollenbeck, Mac Jonson, Daniel Kasen, and Andy Wickell for their willingness to make love to the camera for the next twelve months. They brought Smizing to new levels, thereby making the halls of Redfin full of even more laughter. And, we finally got that picture of a voluptuous Ken in a provocative pose in the server room.

Ken hiding Easter eggs in the server room

Want your own calendar? Be of one of the first 50 people to donate $15 to MIND, then leave a comment here saying: “I donated! Send me a calendar!” We’ll contact you about how to ship your calendar later this week.

Updated 5pm we inadvertently uploaded some gigantic images. We apologize both for the file size and for the extreme closeups you may have experienced.

2011 Prices Down, 2012 Hopes Up

Happy new year Redfinnians!

One more little gift under the tree for you! Just in time for the holidays, we released Redfin for iPad!

Like a magnificent medieval triptych, the app has a three-in-one interface — a map, a kaleidoscope of listing photos, a single house in all its glory — all in one screen. The app shot to the front page of Apple’s App Store from the day of its debut.

One other sugar-plum feature for Redfin fans: we now offer a monthly home report that shows you pictures and prices for all the homes that sold in the four or five blocks around your place. To sign up, just search Redfin for your home address, view the property’s details, then click the big sign-up link.

Hope and Darkness

The holiday spirit seems to have affected more than Redfin’s elf-engineers. Prices fell again, and yet analysts and investors are daft with the holiday spirit, convinced that real estate may finally be ready to recover. Why on the darkest day of the year, are we always so hopeful?

One can only conclude that hopefulness is in our nature, and thank goodness it is! Let’s consider all the reasons this coming year will be better than the last.

Prices Down 1.2%

But first, that lump of coal! The latest numbers show prices fell 1.2%:

Case-Shiller Home Price Index for October 2011, Not Seasonally Adjusted

Three months ago, we said that price gains were just a summer fling. Sure enough, once you adjust for seasonal swings, the index is now at a new post-bubble low.

But hey, it could be worse: last October, experts predicted a 5% – 10% drop but in fact prices over the past year dropped only 3% – 4%. As we’ve been saying all along, we’re at a rocky bottom with a downward trend. The West is stable:

The East and Midwest, slightly less so, mostly because Atlanta fell off a cliff:

Sure, Call It a Comeback If You Like

Now our favorite housing swami, the studly Bill McBride at Calculated Risk, has said that most of the price declines are over. All week, the most-emailed story in the Wall Street Journal has been about the hedge funds now buying up residential real estate:

Big money is starting to wager on housing. Hedge funds run by Caxton Associates LP, SAC Capital Advisors LP, Avenue Capital and Blackstone Group LP have been buying housing-related investments, betting on a rebound. And formerly bearish research firm Zelman & Associates now predicts a housing pickup, as does Goldman Sachs Group Inc.

We aren’t surprised: all year, Wall Street has bombarded our site with web robots trying to download data in bulk. But the Street has been wrong before. As one analyst cautioned: “The smartest money in the world has been carried out on stretchers betting on a true recovery for housing.”

You Want Good News? We’ve Got Plenty

What has convinced some investors that the housing market will be nice instead of naughty? All sorts of good news:

• New construction is finally doing better, with inventory low, sales rising and confidence rising too.
• As we predicted last month, pending home sales hit a 19-month high.
• Actual closed home sales increased 4%.
• The number of homes on the market declined 18% over the past year.
• And to almost everyone’s surprise, foreclosure sales fell to a four-year low.

But don’t get cocky kid! Our own opinion is that home prices won’t fall or rise much in 2012. Prices can’t rise far before banks and regular home-owners put more properties on the market. And they can’t fall far because of increasing rents and — for now — declining foreclosures.

The Monster Under the Bed

The $24,000 question is: will foreclosures come back with a vengeance? Insiders warn that the backlog of foreclosed properties is “shockingly large,” a point no one disputes.

We worry about this, but less than others: the banks themselves don’t want to go back to 2008, when they ruined their own balance sheets by flooding the market with foreclosures at fire-sale prices. And many home-owners fretting about expiring teaser rates are discovering that the new rate is lower than the old one.

Rates Are Low, and May Stay That Way

So what I worry about is interest rates. How long can the whole economy hold together given the apocalyptic politics around U.S. budget deficits? Rates keep falling, now to 3.95%, and government lenders now expects rates to remain low at least through mid-2012.

Which brings us to our final prediction for 2012. If prices are low and relatively stable, and rates remain very low, sales will pick up. Just a guess. Or maybe a hope. Happy new year, and thanks for all your Redfin support!

Best, Glenn

More Crow, Please

Well, now I feel silly. Earlier this evening, I wrote a blog post about the boycott against the pro-SOPA crowd; SOPA is the bill to stop piracy on the Internet. I said that the boycott was a form of censorship when in fact a boycott is an exercise in free speech. I was 100% wrong, moreso because I’ve argued in favor of mass movements before.

The commenters on my post, namely Mary Hinge, Chris Dixon and Sasha Aickin, are 100% right.

Why did I say something wrong? Well the whole boycott just reminded me of my days in college, when I saw very strident people make it very difficult for someone to express an opposing view. Even though I was sort of a wanna-be hippie myself, I always empathized with the guy being shouted down by the other hippies.

The issue back then was political correctness. Yes, I am one of those people who believe that the words we use to describe people of different races and sexual orientation matter, but still I’ve never been comfy with the idea of political correctness. The pressure back then somehow felt to me like a violation of free speech, when really the pressure itself was a part of free speech.

And now it sometimes feels to me that we are using far more powerful levers, on Facebook and Twitter, to shout down the pro-SOPA people. It is totally legit, especially since they have pretty big levers too. I still think we’ll regret that we didn’t engage in a more civil way. Something should be done about piracy. No one who built the Internet seems to have serious intentions of doing it. Any action the government takes will be despised.

But businesses and financiers have the right to organize together to crush a bill, just as today’s Internet companies and venture firms are now doing, alongside the studios and producers on the other side.

I apologize for being stupid, but I wasn’t trying to be provocative. I was sincere in my stupidity, if that makes any sense. I have posted many, many times about Internet piracy because it bothers me more than most people, and posted even more often arguing for moderation generally, because I’ve lately been feeling like the whole world has gone mad.

But I was still wrong about whether the boycott was a violation or a shining example of free speech. It’s a shining example. If you have ever gotten into an argument in which you hoped your unassailable logic would slay the will to live of the other side, please print this blog post out. My will to live has been slain for the moment, and I can’t delete it so I just have to eat it.

SOPA Witch-Hunters, Count Me Out

UPDATE: I was wrong in this post in saying that a boycott stifles free speech. A boycott is a form of free speech. I retracted that argument in a subsequent post a few hours later. *sigh*

The opposition to the Stop Online Piracy Act (SOPA), the bill before Congress to punish websites that publish pirated songs, movies and essays, has united behind the theme of free speech.

But now in a turn worthy of the pigs in Animal Farm, Paul Graham, Chris Dixon, Fred Wilson and others are organizing a campaign to intimidate and silence those who support the bill, retaliating against law firms, journalists and investors alike.

Who knows who was the first to sharpen a stick at both ends, but many were clearly eager to join the fray. Joyce Kim encouraged entrepreneurs to fire lawyers who support SOPA. Chris Dixon wondered aloud if journalists from pro-SOPA newspapers should be excluded from press events (update: Chris in the comments has made clear that he wasn’t saying he was in favor of excluding journalists from anything). Paul Graham just joined the mob, immediately agreeing to block pro-SOPA investors from getting access to the startups he advises.

To which I can only say: please add me to the black-list. Not because I support the bill. As I’ve written before, it is flawed in exactly the way most democratic legislation is: it’s a dog’s breakfast of competing interests, force-fed to the innocent and guilty alike.

I just don’t like bullies. Especially hypocritical bullies. If you actually believe in free speech, and not simply the free distribution of other people’s intellectual property, you should let journalists, law firms and investors exercise their rights to it alongside your own. And yes, working on a bill in an open, democratic process is a valid expression of speech.

Instead, we are threatening anyone who disagrees with us. Like all ideologues, we have convinced ourselves that the other side is a wealthy special interest as if we are not very wealthy, very special and very interested. We imagine that we are trying to protect the Internet only for noble purposes, but it’s also true that we stand to make billions of dollars from the Internet staying just the way it is.

And like all violent ideologues, we have convinced ourselves that the issue is so pressing it demands extreme action. The stakes in this case are usually described as “breaking the Internet,” when in fact it’s already broken: not for the folks profiting today from the Internet, but for all the folks who create the beautiful books, articles, movies and music that the Internet is so often used to steal.

What we need is a discussion about how to make the Internet work for artists, software companies and regular folks alike. No one in software seems interested in that conversation: more than a month ago, we asked everyone opposed to the bill to suggest a better way to prevent piracy, and still no one has.

Now, we have taken this a step further. Not only are we refusing to engage in a constructive way, we are threatening anyone who engages in a way that is disagreeable to us. When no conversation is possible and no action from us is forthcoming, we can hardly blame the Luddites, bureaucrats, idiots and meddlers for being ill-informed or hasty.

Over the holidays especially, we need to stand down from the crazed ideological stances and self-interested politics that are ruining this country, and work together with people we don’t always like to figure out how the Internet — and everything else — can be made better, not worse.