Ok"¦So we’ve heard the news that the housing market is softening up, but by how much? Most industry reports detail price drops and sparsely attended open houses, but we haven’t seen an actual figure of how bad the situation has become. Since many of us at Compete own homes, we thought we would put our data to action.
Measuring Housing Demand Online:
Compete selected seven major housing/real estate sites to act as a proxy of the overall interest in the housing market. We selected these sites based on the following criteria:
- Offered limited or no rental properties
- Detailed estimated home pricing based on property taxes
- Attracted a minimum of 1MM visitors each month
There are hundreds of real estate sites, but for the purpose of our study we were comfortable narrowing the market to the sites highlighted below:
Housing Participation Down 13%
We measured visitor traffic to our proxy market and found a 13% decrease in participation over the past six months. The summer months tend to drive an increase in real estate activity, so this trend is even more alarming than we had anticipated; however, 13% doesn’t seem that bad"¦right?
Wrong! We found that the situation is worse. Measuring for interest in the real estate market doesn’t accurately account for "intention". Many of us own homes and we pay attention to its value, but brief visits to real estate sites does not mean we are "in the market" for a new home. To more accurately measure real estate demand we took a second view measuring both the volume of visitors to sites and the volume of pageviews they made as an indication of actual intent. When adjusting for pageviews, real estate demand shows a 15% decrease from February 2006 to August 2006.
Where do we go from here?
A 15% fall in real estate demand is"¦not good. However, it’s not the end of the world. Albert Einstein said, "In the middle of difficulty, opportunity exists" and that’s the way Compete prefers to see it. Intelligent organization of clickstream allows Compete to see trends that people express through their online patterns. We look forward to sitting back, monitoring demand and then buying half of Boston when we see demand recovering. Check back in or send and email if you would like us to send you updates.