Using Online Data to Better Understand Real Estate Trends

online real estate

I was reading an article the other day about Adzookie, a mobile advertising company that is working with homeowners under threat of foreclosure to transform their homes into painted billboards. The owners get help paying their mortgage, keeping the colorful ads in place for anywhere between three months and a year. While I understand that residual damage caused by the real estate bubble will continue to haunt our economy for years to come, easing price declines have indicated that home prices are stabilizing while emergency foreclosure sales decline.

Getting a bit tired of our one bedroom apartment, I was interested to see just how healthy the real estate market has become.

uvs to real estate sites

I decided to compare popular real estate listing sites Trulia and Zillow to and RealityTrac, sites that ranked highly in search for foreclosure-related terms. Trulia and Zillow saw huge increases in Unique Visitor traffic, while the two foreclosure sites have seen major declines:

unique visitor growth for four real estate sites

While it is easy to infer from these numbers that people are more becoming more interested in researching home prices than foreclosures, how else can statistics like these be used?

Traffic estimates can also be valuable indicators of consumer sentiment when combined with other economic indicators. For example, the Vanguard REIT Index ETF (VNQ) increased nearly 87% between Feb-2009 and Feb-2010, but saw slower growth of 34% between Feb-2010 and Feb-2011, when Trulia and Zillow experienced massive traffic gains. My thoughts are that the “smart” money is starting to move out of residential real estate just as retail investors, indicated by the recent increases in online traffic, are beginning to show more interest. While I am not a financial analyst, this indicates to me that the recent “bottom” is tentative at best, and we are unlikely to see another boom in real estate prices in the near future.

Thinking that I might not miss out on the next real estate boom while saving up for a down payment takes some pressure off and makes my tight one bedroom feel just a bit more cozy!