A couple of weeks ago, Redfin engineers got together for a hackathon to prototype features we’d like to see on the site. One team, featuring Jane Nemenman, Jamie DeMichele, Dane Brandon and Llewellyn Botelho, built a Redfin.com widget for each listing that showed the listing agent’s track record: how many listings he had on the market, what his average discount to list price was, how long it had been since he closed a deal.
It was a great idea. But it didn’t all come from the engineers. The original insight started with our San Francisco agents, who like to size up a seller’s agent before deciding how to represent a buyer in a negotiation, on the theory that negotiating strategy is often influenced as much by the listing agent’s state of mind as by her client’s. Some agents are chronic over-pricers, expecting to give part of that away at the negotiation table. Others stand firm. And still others just need to get a deal done.
Jane, Jamie, Dane and Llewellyn wanted to give everyone this information, so that anyone using Redfin’s site could know what she was up against going into a negotiation. Then we dug into the rules that govern how we use listing data, and decided that using the broker’s database of listings to embarrass brokers publicly wasn’t a fair use of the data.
We’ll still build this into the tools our agents use, so we can help all of our customers know when to hold ‘em and know when to fold ‘em. We’ll also share with everyone the listing stats for our own agents. In the meantime, what I haven’t been able to stop thinking about was how the engineering team reacted as Jane demonstrated the widget, showing the dismal stats for one seller’s agent after another.
Folks were flabbergasted. At first, people thought it was just one agent having a tough year. But after a few minutes of clicking from one listing agent to the next, everyone began to recognize the truth: that in 2009 it was very hard for any agent to sell a home.
So when we got back to our day jobs, Jamie DeMichele — the man who also created bracket-tracking software for March Madness — looked up the numbers for all the listings put on the market in 2009, to see how many had sold by August 11, 2010. The answer? About half. He emailed me the table below, which summarizes the success rate for broker-listed properties for sale in seven major markets:
County Name
Listings Activated in 2009
# 2009 Listings Sold
% 2009 Listings Sold
# Still Active
% Still Active
Cook County, IL
134,710
44,789
33.3%
7,893
5.9%
Fulton County, GA
27,089
9,941
35.8%
1,329
4.8%
King County, WA
51,252
21,500
42.0%
1,729
3.4%
Los Angeles County, CA
130,326
68,564
52.6%
3,079
2.4%
San Francisco County, CA
9,289
5,259
56.6%
112
1.2%
Maricopa County, AZ
137,647
81,204
59.0%
5,008
3.6%
Suffolk County, MA
15,763
5,682
36.1%
393
2.5%
7-County Average
506,796
236,939
46.8%
19,545
3.9%
We shared the data over the weekend with the Wall Street Journal, which just published its own analysis. As we’ve argued in the past, the basic problem is a stand-off between buyers who expect the world, and sellers who have already taken more losses than they can bear. When no one will compromise, and the banks have been slow to foreclose on overdue mortgages, listings don’t sell.
What does this mean for you if you’re trying to sell a house? Primarily: don’t hire the agent promising the highest price, no matter how flattering that may sound. Hire the agent with the best track record. If 2010 is anything like 2009, odds are that the property won’t sell at all, or at least not at the originally promised price.
(Picture of Jamie used with his permission, at his insistence that I use one where he’s wearing cowboy boots)
The Ravens just beat the Browns 16 – 0, but those of you without a Tivo may have noticed something else about the Monday Night Football telecast: a new Apple iPhone ad featuring Redfin’s very own iPhone app. On seeing it, Redfin’s Scott Nagel, hardly one given to over-the-top displays of emotion, got high fives all around from his football-crazed children.
We knew the ad was coming, but Sasha put the fear of Apple in us and for once we kept a secret. To Conan Reidy and all the other people who say I can’t keep clam because of a few minor middle-school indiscretions, this is but one of many examples of really, really juicy stuff I’ve kept to myself…
Many thanks to the folks at Apple for hooking us up, and to Redfin’s iPhone team for building such a sweet app.
Many thanks to Michael Arrington and Erick Schonfeld for publishing an essay this morning on what I’ve learned as a CEO during the downturn. Did anyone notice that the picture of Arnold in “Predator” is strikingly similar to the picture of me?
The premise of the post isn’t that Redfin has found our way out of the woods yet, only that we’ve been in there longer than others; the housing bubble burst a year before the market did. So far, the essay is steadily climbing the del.icio.us charts.
It was originally going to be a top-10 list of tips, but Redfin’s professorial Chris Glew told me that, when interviewing for his first job at Redfin, he had surmised from my blog posts (for DIY PR, financial modeling and startup hardships) that all of his answers should be in the form of a top-10 list.
So, I made a top-9 list instead.
Thanks to Wes, Sylvia and Marc for giving the post a going-over, and to a loyal blog reader — why can’t I find his comment? — for asking why startups are so conservative, which became the point of departure for this latest effort.
Redfin was on Good Morning America today, as promised. The interview was, as always, a blast, and being in a studio was as strange as ever. For some reason, I kept thinking of the children’s book author I had met in a green room on a previous trip. He had written a beautiful little book, and had nothing to worry about. Real estate by comparison seemed so complicated and mercenary.
But then again nothing can make you feel how infinitely varied and desultory life can be like morning television. The star of today’s show was a 44-pound cat, which had entered the building on a red carpet, with ABC interns posing as paparazzi. Competition between the morning programs for the cat interview had, I was told, been fierce. In the green room, the cat tucked into the small feast that been laid out for him.
Diane Sawyer’s producer came in, and looking down at the grazing animal with a mixture of disgust and what may have been wistful envy, asked if the cat had “like, an endocrine problem.” The cat’s handlers, a group of funny Jersey ladies, said, “let’s not go there.”
Barbara Walters came through the studio in a magnificent King-of-the-Mountains-style dress, walking gingerly, with delicate eyelashes and a well-muscled man in a very tight shirt and bleach-blonde hair carrying her purse, to air an interview with Carla Bruni. I’ve been watching her since childhood, and wish I had said hello. It was strange to hear her talking so matter-of-factly about Carla’s orgies. I was interviewed by Diane Sawyer, whose youthful relationship with Henry Kissinger I had also just read about, awestruck.
We ploughed through some questions around some real estate science we’re publishing next week, remembering the advice “not to get into it” with any of the nuances and qualifications we would have dearly loved to make. As soon as the segment was over, the producers swooped in to escort Ms. Sawyer to Bryant Park, filled with teenage girls and already a little sticky with heat, for a production of Rent and a Jonas Brothers concert.
Earlier in the day, I’d asked, “Who’re the Jonas Brothers?” The entire green room fell into shocked silence.
“Dude,” the producer said, apparently having never struggled with the sense of scale that any visitor to New York’s big stage immediately gropes for. “They’re huge.”
For the first time in many, many years, I’m riding in black leather over the East River toward Manhattan. Lamont, the 67-year-old man driving the Towncar, has already explained why he lives in New York: “I love the night life.” He said that he hopes to die at 94, “killed by somebody’s husband.”
He told me about all the bigshots who had sat where I was sitting. His favorite client, Willie Mays, rode with him all over New Jersey, only to pretend to forget him when they ran into each other at a hospital. Mays walked right past Lamont, and told Lamont’s buddy (who had refused to believe Lamont really knew Mays): “He’s a good fella but he don’t where the hell he’s going. We stayed lost that whole day.”
Lamont told me about Charles Barkley, who said about New York: “where else in the f*** can you look at 200 people trying to cross the street and the second they leave, another 200 replace ‘em?”Lamont said he charmed Franco Harris’s wife, and will never again drive Star Jones, for reasons he couldn’t disclose. It’s nice to get a ride.
Last time I came here, I turned down the Lincoln Towncar — and spent 11 p.m. – 2 a.m. waiting for the A train, riding the A train, sobbing on the A train, and, finally & most tragically, watching the A train turn into an Express (to Harlem) just before my midtown stop.
ABC News paid for the car this time – but only after the usual humiliating intimations of poverty from Redfin — and it seems a shame that there’s no one here to have a party with. We’ll be on Good Morning America Friday morning, talking to Diane Sawyer about the science of real estate.
Our theme this time is how you can tell when a seller will give ground on price, and when he’ll stand firm. To get ready, we studied 9,053 records of past sales in Washington, California and Virginia.
Redfin’s Rob McGarty did most of the work, guided by stats man Mose Andre, who recently compared me to the Segway-driving illusionist on Arrested Development, “but in a good way.” (I watched the show for the first time that night and made a mental note: tone it down.)
If you want to watch the show, the hit-time is supposedly 7:45 a.m. (but subject to change). It might be more interesting than the usual interview. Ms. Sawyer has, a producer explained (with a combination of respect and terror), a reputation for spontaneity. I’ll be wearing a loud green shirt with velvet-lined cuffs. Wish us luck.
Many thanks to Ellie, Cynthia and the whole team for their support.
Being on TV is a junkie kind of rush. Even if you’re as stuck up as I am about it, you fall into hoping TV’s magic will transform you during the broadcast into something larger than life. But then you get airbrushed with make-up (new for HD, it feels soft and good), the mic-man publicly undresses you to the navel a minute before the segment starts, and you’re rushed off the set in another two minutes feeling more, not less, inconsequential.
Redfin was on Fox & Friends’ segment this Sunday to talk about our business model (save $10,000!) and to answer the usual questions (we’re not putting anyone out of business). At the end of it I felt a little blue. I walked through the saddest place on earth, a darkened “Geraldo!” set. The streets in midtown Manhattan were empty at 7:30 a.m. I answered an email from a lone Connecticut fan wondering about our expansion plans. I called my mom, and told her my day felt already over. I remembered that a 60 Minutes producer — he was such a prince — once said “everyone is always depressed after the interview.”
Then I got on the 1 subway uptown… and saw people in tank-tops and bibs. A race!
I got back to my room, changed, and ran to Central Park, in what I only then realized was an event for disabled & able-bodied people alike (registration fee paid later).
As usual for Manhattan, folks lined up for the seven-minute-a-mile pace who would almost immediately begin walking, leading to altercations with punier, faster runners. There was a small-voiced, encouraging speech by New York Road Runner’s president Mary Wittenberg and, from the beginning — and all the way through — there was cheering. I LOVE people cheering! Why don’t we do that more often?
And there were so many runners -– I had not thought there could be so many — competing on prosthetic legs, of an age that many must have been injured in Iraq. A large, magnificently muscled man running outside the lane and against the current was yelling, Marine-style: “UP AND OVER, UP AND OVER, COME ON.” It was good to see some of the vets running together. We can never re-pay them. It’s hard not to be almost-scared of the intensity of their experience. But everyone on the course was glad to be doing something with them.
A few racers ran arm-in-arm with their parents, very close to one another, some encouraging me though I should have been the one encouraging them. Melted make-up streamed down my face. And perhaps because I was deranged from trying to run faster than I really could, or because of the cheering, I was overcome with love.
Redfin is appearing on Fox & Friends this Sunday. The “hit-time” is 7:21 a.m. At the moment, I’m in the green room. There is nasty danish here. Redfin is set to air just before a segment on “the world’s ugliest dog.” One of the make-up people in the green room just saw the teaser and said “that dog isn’t THAT ugly.”
Then the room fell silent as the camera swiveled to show a dog that was, for all of its many winning characteristics, very, very ugly. I was glad to see the studio had a recycling bin, but then noticed it was full of garbage. There are many TVs here, ostensibly for piping in news, but the set to my left is showing the original “Planet of the Apes.” I asked the green-room guy who his favorite star was. He said Jerry Springer is “very down-to-earth.” He also liked T.O. “Was he down to earth?” “No,” he said, “I guess not.”
Redfin just showed up in a big USA Today feature which reports that “a growing number of home buyers swear by Redfin, an online start-up in Seattle that has rocked the real estate market.” All day, our phone has been ringing off the hook.
And then a few hours after the article was published, one of our customers chimed in on the USA Today site with his own perspective:
A great idea is one thing, putting it into practice is another. I actually used Redfin to close my first housing purchase well over a year ago. I got great hands-on experience. My Redfin agent was busy at 10pm one night putting in an offer for me because we were in a multiple bid situation and time was running out. Her expertise drafting an escalator clause really paid off. They also sent someone to the property to help coordinate an emergency inspection (one day after the house was on the market). We ended up getting the house and were happy with the service. The best part is that I never felt “sold” or wondered about Redfin’s agents motivation (conscious or subconscious).
On Monday, we looked at what makes a property hot in Boston, so we’re closing the week with a look at a market on the other coast: Los Angeles. The big question: will we see the same trends coast to coast?
We found there really are (hot) pockets of sunshine in the Los Angeles housing market, and this is not according to my trusty Magic 8-ball. We analyzed 2,364 real estate records for single-family listings in Los Angeles County, Calif. that entered the market between Oct. 1, 2007 and March 31, 2008, and sold.
Here’s a rundown of the neighborhoods with the most listings that sold within seven days on the market; the numbers in parentheses calculate the hot properties as a percentage of the total houses that sold in those areas:
Beverly Center, Miracle Mile: 12 (26%)
Brentwood: 12 (27%)
Los Angeles, Southwest: 10 (12%)
Sunset Strip, Hollywood Hills West: 10 (11%)
Westchester: 9 (17%)
For the areas where there were a significant number of hot properties, we compared the listings that sold in seven days or less with everything else that sold in those areas. Our goal was to develop a clear portrait of the hot property, so our buyers would know when they really had to hop to it. And here’s what we found:
Beds and baths were the same for both types: there was no pattern in terms of bedrooms and bathrooms. Hot and “not” (not properties took more than eight days to sell) properties both had three bedrooms and two bathrooms. The coasts agree!
Hot properties are bigger, slightly: The median square footage for hot properties was only slightly larger (.2%) than not properties, but the median lot size was 3% larger. Clearly, the LA sprawl doesn’t mean buyers get more space. Boston homebuyers got 13% larger lots with pretty similar sized homes – 1,669 square feet in Boston vs. 1,735 square feet in LA.
Hot properties are newer: the median year built (1948) for hot properties was four years later than for the nots. Bostonians bought slightly older homes, but maybe that’s because most east coast homes are older?
Hot properties are expensive: it turns out that hot properties weren’t exactly priced to move. In fact, the median list price of hot properties ($1.1 million) was 16% higher. And the high price isn’t just because the houses are bigger: the median dollars per square foot was nearly 16% higher for hot properties ($633) as compared to the nots ($548). The median list price of Boston’s hot properties was $459,000 … you can get two for the price of one in Boston.
There wasn’t a huge difference in the days on market for the hot areas (43) and the entire Los Angeles market (45), but, on average, the hot properties sold in almost five days (Boston hot properties sold in about 4.5 days).
The bottom line is that hot properties are slightly bigger, newer and more expensive. There are distinct areas and house types where properties still sell fast, which continues to support our reason for doing this study in the first place — the real estate market isn’t really clinically depressed; it’s more of a split personality, with the good stuff selling fast, and the rest languishing.
Did you just buy a home in one of these neighborhoods? What was your experience?
Bonus link: The Wall Street Journal reports on the heartwarming side of the housing bust. [Warning: shameless Redfin plug] Read about a couple who escaped their 100-mile, LA-freeway commute.
Out of nowhere last week, an NPR producer sent us a note asking about Redfin’s March Madness plans. At first I thought she was talking about last week’s open houses release. Then I was about to say we aren’t doing anything special, but double-checked first with Redfin power forwards Klaus Gosma and Loren Ellingson, who are thick as thieves.
Klaus consulted with Jamie DeMichele, a developer on our data team who on one of his first days at Redfin explained to me with perfect solemnity that we could never play basketball together because “it would be too humiliating for you.” (“Well maybe you could come over to play cards instead,” I suggested. “That would be worse,” Jamie said.)
Jamie had secretly created a customized web application for running Redfin’s big bracket competition, complete with credit card authorization for the entry fee. He, Klaus and Loren had also talked to the IT department, which had commandeered one of our projectors to stream the games in our largest meeting area. Together they came forward to explain their comprehensive plan to make sure Redfin gets nothing done for the next two weeks.
I had no choice but to write the NPR producer back to explain that yes, perhaps, Redfin was doing something for the basketball tournament. Tune in to NPR this afternoon to hear the young DeMichele and his colleagues explain our plans:
Seattle: 94.9 at 6:30 p.m.; Bay Area: 88.5 at 4 p.m.; Southern California: 89.3 at 6:30 p.m.; Boston & DC: do we really have blog readers on the East Coast? Or just stream it.
HAL 9000: What is going to happen?
Dave Bowman: Something wonderful.
HAL 9000: I’m afraid.
Dave Bowman: Don’t be. We’ll be together.
HAL 9000: Where will we be?
Dave Bowman: Where I am now.
This is the conversation I always think of entrepreneurs at near-death startups having with their software…)
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