The Day of The Dataheads
Saturday, April 25, 2009
Many wars have been launched with less upfront analysis than some home shoppers are putting into their quests. A proliferation of data-drenched real estate Web sites -- and an oversupply of listings, allowing buyers to take their time hunting for just the right place -- has given rise to a new breed of buyer, the datahead.
The vast majority of buyers search listings online and rely on photos and 360-degree panoramas to narrow the selection. But the data lovers, most of them young, skeptical and highly plugged in, take the search a step further. They set up alerts via computer or Internet-connected phone for when one of their target listings has a price reduction or goes off the market. They compare list-price-to-sales-price ratios. They compare price per square foot for each home that catches their eye. They look up the average age, income and family size of their targeted neighborhoods. Some set up spreadsheets to keep track of all the statistics.
The number of unique visits to Zillow's Web site in March rocketed 71 percent above last March's figure, company spokeswoman Amy Bohutinsky said. "It's huge. And it's not what you would expect in the middle of one of the greatest housing downturns in a century," she said. Some of the volume may be coming from people trying to determine whether they have enough equity to qualify for a refinance. But she said the company thinks a lot of hits are coming from people thinking about buying.
"They're not doing it yet, but they're doing the research and they're watching sales and listings in their areas very closely," Bohutinsky said. Also, she said, potential buyers now are mostly investors and younger first-timers, two types of buyers who tend to do a lot of research.
Real estate Web sites continue to load on the numbers to appeal to these data-hungry shoppers. This week, Trulia.com, which already offers charts and tables tracking the supply of listings and price trends for neighborhoods, added a tool that allows buyers to search only for homes that have had a price reduction. (Trulia supplies listing information to The Washington Post's Web site.)
Kevin Wolfe, 27, and his wife, Laura, 26, have been digging through the data for about three years. After biding their time in a rented apartment in Fairfax County since moving from Boston, they will close soon on the purchase of a two-story brick-front house near Chantilly. They were prodded into action in part by what Wolfe called "incredibly low" interest rates, but the $8,000 first-time-buyer tax credit was a lesser motivation. "Effectively, it's a drop in the bucket," he said.
Over their three years of house hunting, they visited 50 or 60 open houses. About 10 to 15 homes warranted a second, by-appointment look. They submitted purchase contracts on five houses, with four of them falling through. For two, he admitted, "we definitely bid too low." On another, Wolfe said he thought they had submitted a fair offer, but the seller took the house off the market and put it up for rent. On the fourth, they and the seller could not agree on what repairs the seller would make before closing.
But on this fifth one, he said, the contingencies have all been removed, and they fully expect to move in. "I would never say I enjoyed the process," Wolfe said.
Along the way, they pulled data from a number of Web sites. They used Redfin.com, a brokerage, as their buyer's agent. Redfin offers buyers a rebate of part of the sales commission, so at closing, they expect to receive 1.5 percent of the home's price back. "That will quite nicely cover a large portion of the closing cost," Wolfe said. Wolfe also posted queries about home buying on Redfin's forums so he could solicit opinions on questions he faced along the way.
The sites they focused on shifted over the course of the hunt. Early in their search, as they were narrowing down neighborhoods, they looked for open houses on washingtonpost.com, Wolfe said. They also checked out neighborhoods on Long & Foster's Web site, which he said had a good graphic interface. "It very easily allowed us to identify which homes were for sale in that neighborhood," Wolfe said.
The Wolfes also checked Zillow for its price estimates. "They occasionally had outdated listing pictures, but not outdated listings," he said. They read news reports and blogs on Bankrate and Seeking Alpha, which helped them decide whether to buy or wait.
Laura kept track of the listings that interested them by bookmarking them on her browser and would check back when they received e-mail alerts about price changes. Each morning before work, Kevin drank his coffee and reviewed e-mails bearing news of listings.