Google Searches: Real Estate Still Not Past Bottom

It’s been almost two years since we first looked at Google’s Real Estate Index, and I thought it was past time for another visit to this particular data set.

To save you the time it would take to re-visit the old post, here’s Google’s description of what they’re doing:

The Google Real Estate Index tracks queries related to “real estate, mortgage, rent, apartments” and so forth.

In order to limit the data to the United States only, I went to the more-detailed data set at Google Insights for Search. Here’s what it looks like when you plot Google’s real estate search activity (12-month rolling average) next to Case-Shiller’s 20-city composite index, with both indices re-indexed to January 2005 = 100:

Google Search & Case-Shiller HPI

Home prices haven’t tracked search activity all that closely in magnitude, but the direction of the two seems to move together fairly nicely. I think it’s interesting to note that search interest in real estate still apparently hasn’t bottomed.

Just another data point that seems to indicate that we haven’t seen the bottom yet…

Data Sources:


About The Tim

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market. Tim also hosts the weekly improv comedy sci-fi podcast Dispatches from the Multiverse.

20 comments:

  1. 1
    2HomeOwner says:

    Not sure if google is able to keep track of hits to the broker’s website (Redfin, JohnLScott, ColdwellBanker …), as I tend to go there directly, instead of google search.

  2. 2
    David Losh says:

    I noticed the push redfin has for Google placement. It appears to be calculated, if not paid for, because my search for Real Estate Seattle, and Seattle Real Estate found redfin on the first four pages, and top of the page.

    So then I looked at some of the forums on redfin that are heavily monitored, and directed. Those indicate people are still in the dark about what has happened to the Real Estate market place.

    We read “multiple offers,” price declines, and an uptick in foreclosures all in the same news sources. People bought this year based on those, once again, historically low interest rates.

    I’m just saying that Real Estate sites have promoted a picture of it’s safe to go back into the water of buying a family home, with some conditions. I know that’s not right, but it is out there being promoted at a time when buyers of the family home should be using extreme caution.

    Many of the buyer beware sites have also closed, or changed direction. In my opinion there is a lot more sales hype in the market place today based on brokerage desperation without many of the warnings some web sites used to provide.

    In my opinion confusion is the root of the Google searches.

  3. 3
    The Tim says:

    RE: David Losh @ 2 – You can’t pay to rank better in Google’s search results, you just have to provide more relevant content. The only for-pay placement you can get on Google is the sponsored ads above and to the right of searches.

    As for brokerages pushing people to buy, hasn’t that always been the case? At least at Redfin I feel like most people here really have the customer’s best interest in mind. Since you mentioned the forums, here’s a recent thread where a couple of Redfin employees (okay, one of them is me—but the other is an agent/coordinator) are encouraging someone to rent for a while instead of buying.

  4. 4
    tomtom says:

    RE: The Tim @ 3

    And the other agent in the thread thinks renting is good because you can buy a more expensive house in the future.

    “But if you can save money by renting, and move your price point up a bit, the difference could be dramatic.”

    Dramatic!

  5. 5
    Ray Pepper says:

    RE: The Tim @ 3

    ” At least at Redfin I feel like most people here really have the customer’s best interest in mind. ”

    Well of course. The employees on the street should surely have the best interest of the customer in mind because they have the daily contact with them. HOWEVER, I assure you Glen and the following: Draper Fisher Jurvetson, Madrona Venture Group, Vulcan Capital, BEV Capital and The Hillman Company must see or is waiting to see some sort of return on their investment. As the market continues to wane, and real estate is viewed as a lead weight, Real Estate Brokerages will suffer immensely. Not to mention the NWMLS and both title and escrow.

    Red Fin was not funded to be the nice guy in the neighborhood and help people put cash in their pockets. I assure you the vision was quite the opposite while promoting what is best for the consumer: education, data, and financial compensation to the Buyer to assist their Red Fin Agent in finding a home which is always the MOST tedious of tasks.

    Red Fin will merge in the coming years into another entity to maintain its survival and Zillow will also collapse in pps/market cap as the real estate markets continue to deleverage. Zipr will be eliminated in its present form and look for partnerships with the 2 aforementioned.

    Continued success will be displayed by MLS4Owner type Listing Brokerages and the smaller Findwell, Shop Prop, and 500 Realty companies that have essentially ZERO overhead.

  6. 6
    David Losh says:

    RE: Ray Pepper @ 5

    Well, Skyline Properties offer a lower over head business model, but the agent gets full paper work support.

    As long as we are done with the plugs, I agree that Glenn is looking to make a move.

  7. 7
    David Losh says:

    RE: The Tim @ 3

    And today http://www.ReMax.com in the top of the page for four pages, and you’re right on the fourth page they have a paid ad.

    You can tell yourself whatever you want, but you hit the nail on the head, you, and another redfin employee dominated a forum thread. It seems to me there is a lot coordinating going on in the forums.

    I see Ray is over there now spreading the good news of strategic default.

    The redfin business model is as old as Real Estate sales, sell, sell. It’s called a paper mill. You find them in resort communities all the time where the buyer has already decided to buy, it’s just a matter of choosing which model home.

    You are there providing the charts, and graphs of “sales data” which is pretty pictures that gives an appearance of market research. It’s the same as Zillow, which I like.

    I’m just saying that you posted the Google search results after the same week end as the redfin Google search push.

    Yes, I check every week.

  8. 8
    CCG says:

    Maybe look for a blowoff top in searches for “real estate sucks”…

  9. 9
    Jonness says:

    By tomtom @ 4:

    RE: The Tim @ 3

    And the other agent in the thread thinks renting is good because you can buy a more expensive house in the future.

    “But if you can save money by renting, and move your price point up a bit, the difference could be dramatic.”

    Dramatic!

    If you live frugally and save for a few more years, prices will come down, and your down payment will go up. This can either get you a dramatically better house, a dramatically lower payment on the house you buy, or a better house and a lower payment. (Yeah, yeah RE agents, I’ve been hearing for 6 years how rates bottomed and are on the verge of skyrocketing. I think this kind of thinking explains why >50% of you are currently losing your rear ends on your investments.)

    Although, I agree with the Redfin agent about being able to get a better house, it’s interesting that the agent has a one track mind on what to do with money. This pays no heed to the first rule of investing: diversify your portfolio. No wonder ~50% of RE agents are losing their shorts.

    When the market is going up, everybody is a genius. But when it reverses direction and trends down for a decade, you have to either start using your brain or get a job flipping burgers.

    http://lansner.ocregister.com/2011/04/17/o-c-luxury-home-agent-files-for-bankruptcy/106933/

  10. 10
    ricklind says:

    By The Tim @ 3:

    RE: David Losh @ 2 – You can’t pay to rank better in Google’s search results, you just have to provide more relevant content. The only for-pay placement you can get on Google is the sponsored ads above and to the right of searches.

    snip…

    And, it is a useful and interesting chart.

    True that you can’t pay to rank better in Google’s organic search but you can pay to have more content terms listed in a site, and sponsored ads do generate more hits that move your site up higher on the organic search. So, actually, you can pay to rank better. Just to clarify.

  11. 11
    John Rowles says:

    Interesting juxtaposition on this graph, although my favorite remains Barry Ritzholtz’s updated NYT/Case Schiller 100 year average: http://www.ritholtz.com/blog/2011/04/case-shiller-100-year-chart-2011-update/

    See that July 2006 peak? That is just when we launched a Google Appliance-powered natural language real estate search engine. We’ve been trying to sell it to brokers on the down slope ever since…we’re still here (open source now) but our timing was AWESOME!

    Due to the nature of our product, I’m in a position to recognize a hole in your data set as it relates to the topic of “real estate”.

    We do a good job of attracting people who are looking for specific properties b/c we rank well in Google for specific local queries, like addresses, street names, neighborhood names and nicknames.

    According to NAR, most people move 12 miles from a place they’ve lived 9 years. They have the information they need to conduct a known-item search as opposed to a very general, but easily trackable, search like “real estate” and our analytics confirm this: Well over 50% of our traffic is long tail landings on specific property detail pages.

    These are terms that are used once, twice, sometimes more but there are hundreds or thousands of them depending on a client’s volume, and all of them are missing from a “real estate” search data set that must, by definition, rely on very general terms.

    Maybe the broad terms are enough to get a general sense of the trend, but if some MIT statistician came up with a way to factor in long tail searches, my gut feeling is the overall strength of “real estate interest” could be +30 to +40% on top of what we see on this graph.

  12. 12

    Keywords Produce Hits Too

    Make sure you have keywords that people search with in your search item too….it ups the hits.

  13. 13

    By Jonness @ 9:

    Although, I agree with the Redfin agent about being able to get a better house, it’s interesting that the agent has a one track mind on what to do with money.

    I would say that’s expected, rather than interesting. One of the problems I have finding attorneys to send people to is there are few that negotiate short sales, do loan modifications, give general credit advice (e.g. walk away), AND do bankruptcy. Absent that, it means the advice they give can tend to favor whatever it is they do.

    I do agree with you though that you should consider all options.

  14. 14
    David Losh says:

    Oh for God’s sakes, it’s called a “take away.” It’s a closing technique to gain trust and build your pipe line. It was used extensively by the mortgage industry and that’s when they started calling themselves “financial planners.”

    You tell the client they can’t afford to buy right now, then put them on your call list for follow up. It’s the technique redfin has used from the beginning.

    Sheesh

  15. 15

    It has to be incredibly hard finding interesting, relevant stuff to post on daily basis, especially if you’ve got a full time gig elsewhere. Some days I’m sure The Tim has all kinds of inspiration and material to post, other days he has to settle for mildly amusing….Bottom calling based on google searches? You decide. I equate it to predicting the Superbowl based on women’s skirt lengths, or deciding that the Presidential candidate who is taller and has thicker hair is the one who gets elected. Except that one is true.

  16. 16

    RE: Ira Sacharoff @ 15 – I’m not sure if it was related, but before this posted I’d asked Tim for something on web traffic compared to the peak. This isn’t what I’d asked for (I wanted traffic data on specific sites), but this is at least in the ballpark. So that might have caused this to be updated from the past.

  17. 17
    Dirty Renter says:

    By Ira Sacharoff @ 15:

    ….predicting the Superbowl based on women’s skirt lengths,

    I, for one, would like to thank the clothes designers and stakeholders, for bringing back the mini-skirts et al. I’ve been smiling all year, telling the wife…it’s like 1969 again. In all seriousness…the S&P s/b 2500.

  18. 18
    The Tim says:

    RE: Kary L. Krismer @ 16 – Yup, your email reminded me of this old post, so I thought I’d update it. Unfortunately traffic to big sites like Trulia, Zillow, and Redfin isn’t publicly available, so I can’t really do a post on that.

  19. 19

    RE: The Tim @ 18 – I would guess Redfin is up, but the other two down. But it would be nice to have some stats.

    So when are you going to do my poll? ;-)

  20. 20
    Voight-kampff says:

    RE: Ira Sacharoff @ 15

    If that dream boat Mitt Romney isn’t elected president, he could always play one on TV!

    http://www.youtube.com/watch?v=e9L9A1IMTQo&feature=youtube_gdata_player

Leave a Reply

Use your email address to sign up with Gravatar for a custom avatar.
Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Please read the rules before posting a comment.