Archive for the ‘Uncategorized’ Category
February 24, 2011
Last night, we flipped the switch on a different data source that gives us a more complete picture of the number of foreclosed homes that are not yet listed for sale. This is a part of what a lot of people refer to as the shadow inventory — homes that have been foreclosed upon by the banks, but not yet processed and put back on the market. These are foreclosed homes that are still waiting in the wings.
The change we made yesterday increased our coverage of these pre-listed foreclosed homes from under 10,000 properties to more than 80,000. This change also provides a more complete picture of each individual home. For instance, we now show the auction price and date for many foreclosed homes — these are the results of failed auctions that have already taken place.
Why is this change good? Since these foreclosed homes will probably be listed in the near future, you can add any of them to your Favorites list, and sign up to receive email alerts whenever any of them come onto the market. And we already show you any foreclosed homes that are listed by an MLS, so you’ll know exactly when these homes become available for purchase.
If you want to search for foreclosed homes, click on More Options under the search box at the top of the page, and check Foreclosed Homes from the lower left column. Foreclosed homes will show up as purple icons on the search results map. If you don’t want these foreclosed homes to show up in your searches, just make sure that option is unchecked, as it is by default.
We also plan to analyze all of this information to help us better understand market as a whole, and we’ll share what we learn with you.
But what we didn’t plan to do was flood everyone with a big purple tidal wave of foreclosed homes. We should have filtered these homes so that they didn’t show up as “brand new” listings, which would have prevented them from overloading your listing alerts. We’ve heard from a few of you about this issue, and we’re fixing it so that it won’t happen again.
If you have any questions or comments, feel free to post them at the bottom of this page, or email us directly.
February 10, 2011
We’ve been a little quiet lately, mostly because Redfin has been busy: with our annual kick-off party, a big upgrade to the website in the works for March, and a new initiative to give each local real estate team the latitude to run as a small business, judged by customer satisfaction and profits.
In the meantime, our loyal fans can read all about our daring exploits on Greylock’s blog, in an online interview published today about D&D, the TRS-80 and sexiness. Or you can see our take on home prices in a guest column we wrote, also today, for The Wall Street Journal. For the first time in three years, we think the market’s getting fundamentally better.
We’ve been writing for other blogs more because other blogs often ask, but also because it’s fun to reach a wider audience. We haven’t mentioned it here yet but we also recently published an essay on TechCrunch citing Groupon, BankSimple, Redfin, Square and Amazon Fresh as examples of a new type of hybrid business, with retail operations that make their online technologies better.
We’ll get back to posting to this blog next week. I miss talking to you guys.
December 15, 2010
Ahoy Redfinnians! We just got word from Apple that an update to our iPhone app will hit the store in the next hour or so. The big new feature is the ability to run saved searches from Redfin.com on your iPhone:
You can also save searches run on your iPhone, for later use from either the iPhone or a web browser:
Our goal is to build a home-search application that easily moves from your computer to your mobile device and back again. Since we first released an iPhone app, we’ve shared users’ list of favorite properties between the iPhone app and our website, and allowed an iPhone user to photograph a listing and upload the picture to our site. Saved searches is the next step.
We also want to make it easy for people to move from the virtual experience Redfin offers to actual service from our real estate agents. Some day, the iPhone app will let people schedule tours or contact a Redfin agent about a property.
Even we have been surprised at how important the iPhone app has become to our business. Last Saturday, when we assembled a dozen Redfin users to hear what they had to say about us, one attendee was shocked to learn we even had a website. Her entire Redfin experience had been limited to our iPhone app.
This just puts an exclamation point on Fred Wilson’s thesis that companies should build for mobile first, and the web second. There are few activities more mobile than a real estate search, and few that engage users so deeply. Next up for us are Android and iPad apps.
We’ve been promising to support other devices for a long time, but when each device is a side-project, we end up putting it off. So now we’re building a dedicated mobile team. Before anyone asks when we’re supporting Android or the iPad, can I direct you to the jobs page of our website? If you know a pioneering engineer in San Francisco, have her send me a resume: glenn (at) redfin (com). It’s a very, very sweet gig.
November 16, 2010
Last week we pulled back the curtain to give you a behind the scenes look at what is happening in the real estate market in Seattle, the Bay Area, the Washington Metro Area and Chicago. Mixing our proprietary market data with our agents’ on-the-ground insights gave us a solid look into the trends that shaped the October housing market.
A few national trends caught our eye:
A Gentle Decrease in Sales Volume: Last month we saw sales volumes plummeting in just about every major metropolitan area we covered. This month most of the numbers are still heading south, but nowhere near the precipitous drops we saw going into October. There were a few areas that bucked this trend, most notably Seattle with an increase of 7% and Washington DC with an incredible increase of 20.8%.
Inventory is Scarce: The inventory numbers, without exception, are down across all the metro areas. Sellers are pulling their listings off the market and waiting for spring before they try again. We should see more of the same next month with some relief coming after the first of the year.
Same Old Same Old with Prices: The expectation was for median price to head down as we head into winter, but it looks like it’s holding pretty steady in most areas with a downward trend of 1% – 3%.
Have you seen any trends in the housing market? We’d love to hear war stories from people in the thick of the real estate market. Post something below and spark a discussion.
You can also dive into a local discussion about our reports on Seattlebubble.com, YoChicago.com or the Bay Area’s Socketsite.com.
October 29, 2010
It has become an article of faith among politicians and journalists that the foreclosure freeze will drive down home prices. “The moratoriums, both state-mandated and self-inflicted, can be incredibly destructive,” a professor of real estate recently warned. “This can lead to further house price declines.”
Then on Wednesday, a treasury official told Congress that robo-signed foreclosure documents and lawsuits over foreclosed homes would “exert downward pressure on overall housing prices, both in the short and long run.” By Thursday, CNBC was airing a special segment on the mortgage mess asking how the real estate market would recover from the halt in foreclosures.
This question was impossible to answer because it doesn’t make any sense. When there are fewer foreclosures, there is less downward pressure on housing prices, not more. A joint Harvard-MIT study recently concluded that foreclosures sell for 27% less than comparable listings. The Center for Responsible Lending estimates that foreclosures lower the value of neighboring homes by $7,200.
One could argue that preventing banks from foreclosing on homes may defer the ultimate recovery, but the immediate impact is simple to gauge: if there is a decrease in distressed inventory, prices will stabilize, or even rise.
This isn’t a theory; it’s an empirical fact. Look at what happened in Southern California’s Inland Empire, which was awash in foreclosures through 2009. When bank-owned listings became scarce, buyers began competing with one another to buy those that remained, and 2010 prices steadily rose.
The truth is that the foreclosure freeze is a terrifying threat to banks, and perhaps to all of Wall Street, which could spend a decade in courts sorting out who owns what. But if the pace of bank-owned listings reaching the market actually slowed — which is not at all a foregone conclusion, given the enormous backlog banks are still working through — it would probably come as a welcome respite to the real estate market.
October 25, 2010
Big news! Redfin has begun clustering listing search results! We’ve rolled out the feature to Seattle, Portland, the Bay Area, Sacramento and Phoenix so far, and expect to offer it across the site by this Friday.
Clustering fixes a big problem. For years, the result most Redfin.com visitors have seen when first searching the site has been an error message that prompted users to zoom in:
Visitors’ most common reaction to this warning was to leave. And many did just that. The problem is that first-timers often start by searching broadly, on cities like Seattle or Boston that contain thousands of listings, which are difficult to display on a single map.
Most sites create multiple pages of results, forcing the user to flip through pages for listings that in reality may be separated by only a few feet of lawn.
But we prefer to think of Redfin as an application, not a book, where the map shows the entire lay of listings across the land. If we can’t create a work-space that shows all the listings for an area, we don’t show any listings at all.
With today’s upgrade, we still ask users to zoom in on a workable number of properties, but clusters guide that process, creating targets on the map for users to click, sized according to the approximate number of listings in that area:
Redfin dynamically sizes and locates the clusters based on a real-time survey of listings in the area. As a result, we never show an out-of-date view of the listings in an area. To calculate the size of very large clusters quickly, we do however round to the nearest multiple of ten or five.
My God, It’s Full of Stars!
What you’ll notice first when you click on a cluster from a Safari or Chrome browser is that the cluster explodes into more clusters, or a scattering of homes, that slide and re-size across the screen. This looks cool. And we coded it in a cool way, using CSS Transitions, a technology associated with the new language of the web, HTML5.
When you mouse over a cluster, you see the shape of the cluster, the number of houses and condos within the cluster, and their price range. This mouse-over display uses CSS Transforms, also associated with HTML5.
What delicious eye-candy! But it serves a larger purpose, to animate the whole work-space so that it can stream more information to our users. As Redfin engineering vice president Sasha Aickin notes, a 30-second video conveys more information than a picture you stare at for 30 seconds.
We think animation can have a similar effect in a real estate application. So now that we’ve committed to emerging web standards, you’ll see plenty more dynamic features added to Redfin, highlight listing photos and charting pricing trends. The experience, we hope, will blow you away.
(Almost) No Browser Left Behind
But what about the rest of the browsers? Firefox 4.0, now in beta, also supports these animations. And except for Internet Explorer 6.0, all the other browsers still show clusters, but without the mouse-over or animation effects. We worked hard to recognize which browser you prefer, and to support that choice.
We’ve still got more big changes to the website coming this week, but we’re rolling them out bit by bit to make sure the site doesn’t crash.
For now, many thanks to the designers and developers of clusters, Navtej Sadhal, Darren Yeung, Michael Smedberg, Ben Fulton, Dan Fabulich, Andy Taylor and Jane Nemenman, all of whom, undoubtedly, are anxious to hear what you think…
October 20, 2010
Last week we pulled back the curtain to give you a behind the scenes look at what is happening in the real estate market in the Bay Area, the Washington DC Metro Area and Seattle. Mixing our proprietary market data with our agents’ on-the-ground insights gave us a solid look into the trends that shaped the September housing market.
A few national trends caught our eye:
Sales Volume Keeps on Dropping: The Bay Area had one bright spot in Marin County, but other than that untouchable enclave the number of homes sold dropped anywhere between 7% – 23%. The Washington Metro Area experienced a huge slow down in the number of homes sold by as much as 23% – 45% across the board. In Seattle the slow down wasn’t quite as precipitous, but it was down by 16.6% overall. The bottom line is: Sales volume is down pretty much everywhere we looked.
Sporadic Bursts of New Listings: The number of homes coming onto the market has stayed extremely flat with some freak exceptions. Alexandria shot up by 19%, but this is mostly due to the lack of new listings the month before. San Francisco shot up by 21%; unfortunately our agents are not seeing a surge of fantastic new listings flooding the market, instead they are seeing the same old listings and that isn’t making anyone very excited.
Median Price is Not Budging…Yet: We are not seeing a huge swing in the median price of homes in any of the markets. This probably won’t hold true throughout the brutal days of winter and we expect to see some more movement in the coming months.
Have you seen any trends in the housing market? We’d love to hear war stories from people in the thick of the real estate market. Post something below and spark a discussion.
September 27, 2010
Our Washington DC market manager, Karen Krupsaw, was in my office last Monday getting ready for her first board meeting. We weren’t worried about her presentation, just because her point of view has the violence and certainty of a hawk descending on a field mouse.
Instead we worried about the Q&A; most board presentations are carefully scripted events that don’t go according to the script at all. The questions just start flying.
But Scott Nagel, our VP of real estate operations, pointed out that regardless of what questions Karen faced, there should usually only be four possible answers: yes, no, a number, I don’t know. “When in doubt,” Scott said, “my personal favorite is I don’t know.”
This Q&A protocol was one we first settled on when pitching Redfin to investors. And the reason for it was a tendency we noticed in one another to give a spiel instead of a direct response to a question.
Scott’s advice works on a surprisingly wide range of questions. If Google gained access to local listings and brokerage data today, could we compete in real estate search? No. What will our revenue will be in 2012? I don’t know. How long does it take a new market to generate profits? 6 months.
You can elaborate on these responses, but directly answering the question starts you off on the right foot. For her part, Karen did a fantastic job answering the board’s questions, but not always because of our help: the first question she got, within a few seconds of being introduced, was “What’s your background? Where’d you work before Redfin?”
September 23, 2010
What a coup for Redfin! The founder and former CEO of CarMax, Austin Ligon, joined Redfin’s board of directors this week, and also made a small investment in the company. The note we sent out Monday night to everyone here at Redfin captures some of our excitement at Austin’s arrival:
The big news this week is that Austin Ligon, founder and former CEO of CarMax, is joining our board of directors! The board’s role is to ensure the management team makes money for shareholders over the short term and long term. The board meets quarterly to see whether we’re making money, and to go over any big initiatives we have planned.
A board usually consists of major shareholders and one or two folks known as outsiders, who have extensive operating experience but a very small stake in the company. Until now, the board has consisted of venture capitalists from firms like Madrona, Vulcan, DFJ and Greylock. I’m also on the board.
Austin is an ideal outside board member. CarMax, which opened its first store this week in 1993, is in many ways the Redfin of used cars, building trust with consumers by being honest and open with information in an industry that people haven’t always trusted. Like Redfin, CarMax is complicated, with huge analytical and online components, and operations spanning many locations.
Austin helped build CarMax into a company with $7.5 billion in 2006 sales, and retired a few years ago. He’s participating in Tuesday’s all-day board meeting. The board will join the Seattle employees for lunch, so if you have any questions, grab a chair next to Austin and fire away.
What does this mean for Redfin? Well, it’s a big vote of confidence in our business that someone of Austin’s caliber wants to get involved. Beyond that, Austin should help us figure out some tricky issues around managing a field organization, building a consumer brand and scaling a business. And he is a firm advocate of taking a long-term view and building a customer-driven business, both consistent with our values.
If you want to read more about Austin’s perspective, check out his presentation to Redfin when he visited our Seattle office this summer. We’ll announce the news publicly this week or maybe next!
The morning after we sent this note, we had our first board meeting with Austin; his insights were even better than we expected. Over the course of the day, it became clear just how relevant Austin’s experience is to Redfin — it was almost as if he were genetically engineered to be able to help us — and how much inspiration we can take from CarMax’s success. Here are some of the similarities between Redfin and CarMax that Redfin’s management team was talking about long after the meeting was over:
- CarMax focused first on building consumer trust, in an industry where consumers were skeptical, and no brand was well-trusted.
- CarMax pays its field organization to do the right thing, not just sell cars at any cost.
- CarMax is unapologetic about offering low, no-haggle pricing. The industry in which it operates has been unapologetic about trying to maximize per-transaction profit, and hostile to the ideas of value or efficiency.
- CarMax believes that only way you can disrupt an industry is by being better and cheaper, not just one or the other.
- CarMax grew slowly, market by market, perfecting the customer experience before expanding.
- CarMax builds competitive advantage by gathering data about inventory, customers & operations that individual dealerships can’t match.
- CarMax accumulated operational expertise in a complex business that eventually created barriers to entry so deep that the company now has virtually no competition.
- CarMax’s first contact with customers is online, in an industry where the in-person salesman had been king.
- CarMax’s online competitors are lead-referral sites, which send customers to dealers of varying quality, operating in a broken system.
- CarMax has always focused on the long-term, limiting its initial appeal to investors, but maximizing return on invested capital over time.
- CarMax built a culture of respect for its employees, despite competing in a dog-eat-dog industry. For the sixth consecutive year, Fortune just chose CarMax as a Top 100 company to work for. No auto dealer or manufacturer has ever made the list.
- CarMax lobbied Congress to override anti-competitive state laws, and failed.
The only argument I’ve gotten in with Austin so far is whether the largest class of American state legislators consists of car dealers or real estate folks. Welcome Austin. We’re glad to have you aboard!
September 22, 2010
TechCrunch’s Sarah Lacy just published an essay on how Silicon Valley has still been eating steaks throughout the recession. She makes the case using the upside-down logic that is unavoidable in the Valley, based on venture and merger activity.
This is true. A recession is the best time to be an early-stage company. But for later-stage companies with customers and revenues, times have been hard. Redfin will emerge from the recession fundamentally different from how we came into it. It’s not an experience that we would wish on anyone, but we’ll be much better for it.
It’s easy to see how a hard time changes an organism when you have an identical twin brother. A week before graduating from college, Wes broke his leg playing soccer. He knew it was a bad break when it happened because he felt only a great thirst, not pain, and because he saw how everyone else on the field was looking at him.
I flew out to Chicago after my own finals to help. What I noticed first coming into Wes’s room was the smell. His surgically repaired leg smelled rotten. He couldn’t sleep from the pain. Often, he couldn’t stop crying.
Taking over his convalescence from his girlfriend, I came to the bizarre decision that it was the perfect time to put him on a Grape-Nuts diet so that he would come back from the injury “100% pure steel.” He still hasn’t forgiven me for it. But to this day, he weighs less than I do, and runs faster.
Redfin this year is like my twin brother. We’re coming of age in the midst of a few bad breaks, which makes us more competitive. Two years ago, the percentage of Redfin customers who signed an offer within 30 days of seeing a home decreased 50%, increasing our costs a lot. We re-tooled our business to accommodate the change and became profitable.
In the past year, the home-buying tax credit expired and that number dropped by 50% again, and again we have had to re-tool to come back to monthly profits, a process that has been as hard as the Grape-Nut nugget itself!
It would have been harder if we had already become a big company. Our main competitor came of age during a real estate boom. Revenues skyrocketed. The competitor expanded into marginal markets. Few noticed the deterioration in unit economics.
As we’ve noted before, growing that fast is a lot like a long drive down a gravel road. The windows are down, and the wind in your face feels good, but when you stop, the whole cab fills with miles of dust and detritus.
The longer you’ve been driving fast, the more mistakes you leave in your wake without even realizing it. On the other hand, occasionally being forced to stop and re-build yourself in the end leaves you with a better truck.
This is probably why so many companies like Facebook, LinkedIn, Twitter or Zynga have waited to go public. All of these companies have acquired users very fast, and some have grown revenues quickly too, but they are still tinkering and re-tinkering with how they make money.
Redfin has grown too, nearly doubling every year. But we’ve only been able to do that through an annual cycle of sheer terror and adaptation. And we still go through periods of profits and losses, learning how to lower our costs and improve service at every turn of the screw.
My guess is that when the world emerges from this economic downturn, there will be a whole generation of Grape-Nuts-hardened startups making money hand over fist.
