The coming year will see an increased scrutiny of the value of real estate listings syndication; a renewed debate around broker control of listings data and its distribution channels; and a rising demand among consumers and real estate professionals for higher-quality data, according to more than a dozen industry experts contacted by Inman News.
A coming wave of syndication withdrawals?
In November, HomeServices of America subsidiary Edina Realty Inc. announced plans to pull listings from Trulia and Realtor.com, reigniting a debate over the pros and cons of syndicating listings to third-party sites.
Edina Realty’s syndication withdrawal may be among the first in a coming wave where brokerages and multiple listing services decide to syndicate real estate listings only to sites that provide the most value, some experts said.
Edina’s move, and a similar withdrawal by Shorewest Realtors in 2010, may be "just the tip of the iceberg," said Michael Audet, founding partner at WAV Group, a real estate consulting firm.
"I think the broker industry is and will take a serious look at the entire issue of syndication. There is a growing concern that the return on value from third-party sites like Zillow and Trulia is just not there," Audet added.
Bob Peltier, Edina Realty’s president and CEO said, "I just don’t see the value for our company to continue to support that business model. (Third-party real estate search sites) are not brokers. They’re not in the (brokerage) business. Their model is to sell advertising to anybody that will buy it."
The brokerage has thus far pulled its listings from Trulia, though the companies have devised a workaround that allows Edina agents to submit their own listings to Trulia if they choose. The brokerage is attempting to negotiate a similar workaround with Realtor.com before pulling its listings from that site.
Mark Weiss, director of business development at Trulia, anticipates listings syndication will be among the most controversial data issues in 2012.
"Some brokers (will decide) not to syndicate at all in an effort to force consumers to their site for information, while others take the opposite approach trying (to) capture consumers online that brokers who are not syndicating have ignored," Weiss said.
"The focus for real estate professionals should be getting their listing data to the most qualified homebuyers and sellers in the most cost-efficient method possible," he added.
As the value of listing data is further assessed in 2012, multiple listing services may decide that value is worth a price, some experts said.
"As (brokers and MLSs) are digging into licensee business models and understanding how much money is being made — and that they have zero piece of that pie … the potential for increased data costs to licensees or revenue-share demands is very palpable in the near future," said Kim Cipriano Prior, senior vice president of marketing and MLS market development at real estate data company Onboard Informatics.
Taking control of listing data
Rather than distributing their listings "anywhere and everywhere," brokers are taking back more control of where their listings are distributed, said Charlie Young, president and CEO of Realogy Corp. subsidiary ERA Real Estate.
"The reason for this is simple: If you don’t know where your listings are appearing, you can’t track them and therefore you can’t pinpoint critical marketing metrics such as cost per lead, cost per transaction, and lead sources. Being able to articulate these metrics as a key component of your value proposition to both agents and consumers is critical," Young said.
Saul Klein, senior vice president of listings syndicator Point2, expects syndication to veer toward "report card-based syndication" based on performance, or "criteria-based syndication" based on conditions dictating what can and cannot be done with feeds of listings data.
"Control will be a key issue with data providers, as they will expect and demand that they know and control — from all data display entities — where their data is being displayed; what the source of the data is, if not directly from them; what happens to the data when no longer active; and reporting on consumer interactions with that listings data," said Errol Samuelson, president of Realtor.com.
Nonetheless, Samuelson predicts "technology and industry-friendly innovations will offer solutions that will ensure listings maintain their integrity and brokers manage and maintain control of their listings content."
MLS data pirates
Brian Larson, president of consulting firm Larson/Sobotka Business Advisors LLC, anticipates more MLSs will go after "data pirates" who redistribute licensed MLS data without authorization.
"We are working with some clients now to evaluate effective ways of shutting down folks who steal data from listing brokers and MLSs. I’d expect some news on this front in the first quarter," Larson said.
Realtor.com’s Samuelson noted that Realtor.com has seen 1 million separate attempts of data "scraping" on the site over the last 30 days.
"While Realtor.com has sophisticated technologies to block these attempts, the vast majority of third-party, broker, agent, and MLS public websites do not. Brokers need to choose a syndication source for their listings data and make sure none of their vendors or agents are syndicating data through other means," Samuelson said.
"MLSs can play a role as well in making sure that vendors — IDX (Internet Data Exchange) companies, CMA (comparative market analyses) suppliers, etc. — are not violating their MLS agreements by resyndicating the data that is being provided by the MLS for a certain purpose.
"Brokers and agents should only work with sites whose practices or business models match their values and needs."
Syndication via social media
In November, NAR’s Multiple Listing Issues and Policies Committee approved, in concept, suggested language to broaden the group’s IDX policy to give members the right to display shared listings data from their MLS through mobile apps and social media, though it rejected language that would have allowed display through RSS feeds.
"What will it look like? How will brokers and agents manage data on these sites? Will they lose more control or is it no big deal? I think it will be a hot topic as it unfolds," WAV’s Audet said.
Increasing consumer demand for more, better, meaningful data
As real estate leaders tackle larger policy issues this coming year, real estate professionals and consumers on the ground will demand more and higher-quality data to help them gauge the state of the housing market and when it might reach that elusive "bottom," several experts said.
"In time of continued anxiety, people are looking for glimpses of hope in home sales and price(s), and foreclosure activity," said Avi Gupta, vice president of marketing and operations for predictive marketing company SmartZip.
Consumers and real estate professionals will also be hungry for reliable and accurate home valuations, forward-looking home-price indices, sold property data, and listings history data that includes a property’s sales history, price changes, and dates on and off market, experts said.
"I believe consumers will be looking for more historical records on the properties for sale to help them make more informed decisions in the homebuying and selling process," said Cary Sylvester, executive director of technology at Keller Williams Realty International.
Any third-party or industry sites that offer such data will have a "leg up," said Gregg Larson, president and CEO of Clareity Consulting. "Consumers will find the history invaluable and return to those sites that offer it," he said.
Both consumers and real estate professionals will want data that is in real time, experts said, or better yet, predictive.
"The media, agents, and consumers are frustrated by how much market data is reported with a lag and tells us what has already happened. The major home-price indexes report on market conditions that are several months out of date by the time they’re published," said Jed Kolko, Trulia’s chief economist.
"Consumers and the industry will value any forward-looking data that shows what will happen to housing demand and supply in the near or distant future."
Clareity’s Larson said he expects agents’ ratings will become hotter in 2012, especially those that combine data on agent productivity and customer satisfaction.
"Eighty-one percent of consumers want agent ratings, but only 14 percent of agents like the idea. More agent ratings will evolve in 2012, and many agents are in denial … hoping (the ratings) will go away. They won’t — it’s just getting started!" Larson said.
A deluge of data
As real estate data proliferates, data providers that best define their methodologies and standards will dominate in 2012, said Greg Sax, communications director at Minneapolis Area Association of Realtors subsidiary 10K Research and Marketing.
"It’s not enough to just provide numbers. Real estate professionals and consumers alike want context and they want to trust what they are looking at," Sax said.
Nevertheless, the deluge of data will also give real estate professionals a chance to show off their expertise to consumers, said Jonathan Hill, president of RealEstate Business Intelligence (RBI), a subsidiary of Mid-Atlantic regional MLS MRIS, among the largest MLSs in the nation.
"Smart real estate professionals understand that ‘data’ — the bits and pieces we collect every day — is best conveyed to consumers as information, giving those pieces context and perspective: How does this year’s median sale price compare to last year’s? They can then convert that information to market knowledge: Median sale price increases mirror market activity levels," Hill said.
"What consumers really want is the story — the analysis — of what is happening and why."
Additional commentary from industry experts:
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Q: What do you think will be the hottest topics in real estate data in 2012?
A: It’s not just data issues. Data is the current buzz "word du jour."
(The) biggest issue will be whether large brokers stay in NAR/MLS or pull out and start their own. They’re really angry and we are starting to see cracks in the wall — witness Edina Realty stopping syndication of listings.
The francisor IDX flip-flop that NAR did … really got up the dander of the larger franchisors. Bob Moline speaking for HomeServices publicly threatened to pull out of all MLSs if the rule wasn’t changed. Alex Perriello at Realogy was equally perturbed, having spent millions to build CBMove.com and now being told he can’t have the IDX listings to fuel the search engine.
There have been unsubstantiated reports of conversations at Realty Alliance and LeadingRE meetings wherein brokers are expressing their increasing distrust of NAR and their dislike for having to comply with rules that (appear to be) anti-business. I think there’s a pot of trouble there just waiting to boil over.
Expect to see more court challenges to the requirement for Realtor membership to participate in Realtor-owned MLSs. Consumers will drive the change, claiming it requires them to pay more commission to cover the unnecessary Realtor membership by their agents as a condition of getting to MLS data.
Cooperative commission will also be challenged in some MLSs — buyer consumers will finally figure out they are paying more to their agent if they pay more for the house. It’s a reverse incentive for the agent to act in the best interest of the buyer. The agent gets paid more if the buyer suffers.
Consumers will drive those two changes, and Realtors and MLSs will figure it out eventually, if it isn’t too late.
Bob Bemis
CEO
Arizona Regional Multiple Listings Service (ARMLS)
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Q: What do you think will be the hottest topics in real estate data in 2012?
A: Home sale and single-family rental data will be the hottest in 2012. Home sales because they are such an important gauge of the supply and demand dynamic in the housing market. Strong demand relative to supply will be important for stabilization of house prices.
Single-family rental values will be important because many of the policy solutions that address the excess supply of foreclosures are centered on the concept of rental value, either the homeowner renting back the foreclosed property or the investor buying the property with an intent to rent it.
Q: What data issues do you think will be most controversial in 2012?
A: House-price indices will continue to be debated. Controversy may not be the right word for it, but certainly the many house-price indices that are available will be monitored closely for signs of improvement and a better outlook.
Q: What data issues will you as a company watch most closely in 2012?
A: CoreLogic will be watching closely mortgage performance, how many borrowers are delinquent, shadow inventory, negative equity and prices. These are all important metrics of the health and vitality of the mortgage and housing markets — all of which have been moving laterally in 2011. We hope to see these statistics to begin improving more quickly in 2012.
Q: What data issues should real estate professionals watch most closely in the coming year?
A: As a real estate professional I would focus on the supply and demand for houses. Local trends in inventory and sales are critical. One of the best measures of market health that combines the two is "months’ supply."
Mark Fleming
Chief economist
CoreLogic
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Q: What do you think will be the hottest topics in real estate data in 2012?
A: I expect two key "battlegrounds" to get a lot of attention:
1. The battle for "brand" in the real estate analytics space: Whose housing market statistics will be cited most frequently, and whose will be the most authoritative? It’s easy to imagine that the answer to these questions isn’t the same.
2. The battle against misappropriation of MLS content. I don’t think we’ll ever have seen more energy focused on this age-old problem. But because it is so resource-intensive, in terms of the cost of investigation and attorneys, I wonder whether we’ll see the "perp-walk" that could really change the attitudes of those purveying purloined MLS content, and those who purchase it.
Q: What data issues do you think will be most controversial in 2012?
A: The credibility of different housing market indicators, home-price indices, inventory measurement, and sales reports.
Q: What sort of changes do you expect in how real estate data is handled? Perceived? Used?
A: Other than the competition for brand leadership in housing market analytics — which I expect to be waged primarily as an intramural game, in any case — I expect very little evolution in how real estate data is handled or consumed. It’s very expensive and requires scale, and thus the rate of change in this area has been glacial.
Q: What data issues will you as a company watch most closely in 2012?
A: We will be looking at how the various players position themselves to the public, the media, the government, and each other as purveyors of housing market insight, and how to help Realtors take advantage of or defend themselves and their clients from the proliferation of statistics.
For several years now, we’ve seen the effect that the various housing market reports have had in causing confusion among homeowners and buyers — in any given "news cycle" there can be one credible-seeming report that indicates sales are up, and in another, they’re off. The same data that presents a cause for optimism in one quarter is viewed as an ominous trend in another.
There are more and more companies trying to get into this space now — more than ever before — so the risk of confusion is only bound to grow as they compete to grab attention in the headlines.
Q: What data issues should real estate professionals watch most closely in the coming year?
A: How consumer perception and sentiment is shaped by statistics, and whether Realtor data is being used in the interest of Realtors and their clients — or should be.
Marty Frame
President
Realtors Property Resource (RPR)
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Q: What data issues do you think will be most controversial in 2012?
A: Listings syndication, RSS feeds, and social media postings will continue to cause consternation in the real estate industry involving the broad distribution of listings data from numerous sources (i.e., brokers, their agents, and vendors) and through multiple channels.
As these individual parties grapple with these issues, industry groups like CMLS, the Realty Alliance and others are well-positioned to assist them in creating, defining and articulating more concrete solutions for the real estate industry as a whole. Meanwhile, more brokers will take back their listings and will be more concerned and more controlled regarding how their listings are distributed as well as how they are shared with others.
Additionally, the growing demand from buyers and sellers to consume all types of real estate information found on the Internet — especially agent ratings, productivity and sales volume statistics — will continue in 2012. However, I do believe that agent ratings will become better adopted by our industry.
Q: What sort of changes do you expect in how real estate data is handled? Perceived? Used?
A: Generally, we will see the beginning of a much larger audience participating in the policy decisions promulgated by NAR and, as a result, these policy solutions will be more palatable and easier to implement — ones that are more intuitive to service the industry’s needs with greater and broader involvement at every layer of our industry.
Clareity and Real Trends are already surveying brokers nationwide on NAR’s pending new … policy development for social media, mobile, and RSS applications for IDX data. And we saw a huge showing from franchisors and Realty Alliance and Leading Real Estate Companies of the World representation at the last two NAR MLS policy committee meetings, so every major broker seems to be much more aware of the need for better industry involvement in NAR MLS rulemaking.
I think it will soon be a new world for NAR as policy is developed, because I see the industry organizing itself to insure policy development is made with industry involvement — beyond NAR committee activity.
Furthermore, I anticipate that we will see more progressiveness from brokers and MLSs to cultivate "free" (not "freemium") lead generation tools and resources for brokers and agents. By gaining a better understanding of what a consumer desires for real estate — for example, the inclusion of lifestyle information or saved search functions on their websites — MLSs and brokers can modify their Internet presence to attract and drive more consumers to their sites.
If the MLSs and brokers, versus the industry data publishers, satisfy the needs and desires of the consumer, the brokers’ site traffic will grow and bolster their Internet ranking as a more desirable resource. As an added benefit, these results can create better economies for the brokers’ advertising operations and consumers’ overall experience.
Data integrity will continue to be an important factor in the real estate industry, especially with consumers who cannot differentiate between information delivered from the MLS, broker or third-party sources like Redfin or Trulia.
MLSs and brokers must re-educate the consumer that they are the source for data integrity, accuracy and timeliness, and remind consumers of the value-add Realtors bring to the table.
Additionally, I envision two other trends involving data: sold data entering the public domain that will be perceived as an accurate barometer of property "value" by consumers; and the development of new ways to monetize data — as a commodity or through the development of robust data-analysis tools for slicing and dicing data.
Q: What kind of data do you expect consumers will be most hungry for in 2012?
A: Sold data and property history: history of sales, on/off market dates, price changes, status changes, etc. An industry-sponsored consumer-accessible automated valuation model, based on real, active MLS data combined with historical data, such as that of RPR (Realtors Property Resource), would be a great tool to redirect consumer traffic to the brokers’ websites.
Q: What data issues will you as a company watch most closely in 2012?
A: Distribution of sales/sold data for properties and agent production; use of data on social media sites; and unauthorized distribution and resyndication of licensed MLS data.
We are constantly working to seed our data in various ways when we find data on sites no one authorized. We can now tell who or which firm allowed it to happen. And many of the major vendors in our industry have repurposed our data for years for other products they sell and we are just now tracking it down as our seeding initiatives have become more effective.
I have been on many calls in the last year with other MLS execs regarding common experiences with many of the same abusers.
Jim Harrrison
President and CEO
MLSListings Inc.
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Q: What data issues do you think will be most controversial in 2012?
A: Home value indexes and … whether consumers should be looking at ones that include or exclude foreclosure resales. One’s choice here makes a nontrivial difference in interpretation of what is actually happening in housing markets, and I think that getting closer to the bottom of the housing recession will make these differences more paramount in this next year.
Q: What data issues should real estate professionals watch most closely in the coming year?
A: The restatements in housing sales from the National Association of Realtors will impact professionals because they’ll have to get comfortable with the fact that there were substantially fewer home sales in the past few years than they previously believed was the case.
Q: What data issues will you as a company watch most closely in 2012?
A: Zillow will remain focused on continual improvement in its valuation algorithms and to creating even more real estate metrics that give consumers insight into what’s happening in their local markets.
The media spends a lot of time talking about national metrics because they characterize a high-level market for a broad swath of people which is useful, but almost all consumer decisions need to be made on the basis of hyperlocal data, which is what Zillow specializes in.
Stan Humphries
Chief economist
Zillow
