The challenging economic conditions in the US housing market are leading to a revolution in the use of technology as real estate businesses cut costs and seek to exploit new ways to reach customers

The revolution has seen intense competition develop on the internet as Realtors try to get the most from marketing budgets and harness the growing trend for clients to search for property online. However, as real estate agents suddenly realise the marketing opportunities that the internet offers them, it is forcing them to compete not only with each other, but also with the traditional media organizations that they used to support with their advertising.

‘Media companies will be competing more and more with broker sites,’ says Joy Hanawa, Real Estate GM and Chief Technology Officer for Adicio, which produces online classified advertising software. ‘In the US there are hundreds of MLS’ and only a few major sites on which to see 80 per cent of all listings.  Brokers with access to a listing service, such as an MLS, may have more data than local media companies.’

Getting personal
This glut of data that means that brokers are now fighting to differentiate their websites in what has become an increasingly ferocious battle to drive online visitors to their sites – and then hold them there.

‘What we are seeing now is a lot of personalization going on with website design,’ says Gary Cowan, Vice President of Products for the web development company Datasphere. ‘More and more people are conducting their research through the internet than through any other medium. People are spending hours and days looking for the right property, so you need to give them an experience when they are purchasing property through you that makes them think that they are with you.’

Without that sense of personal presence, potential clients will not stay on a site. The result has been the implementation of web technologies like those used by Datasphere, that try to deepen the amount of information that visitors receive from a website.

In Datasphere’s case, it allows real estate agents to group similar properties in similar places in what Cowan refers to as ‘communities’, so that the viewing experience can be customized for the person viewing it.

Information exchange
The flirtation with personalization does not stop there: personalization has turned into a full blown love affair for a real estate business that has not had to work too hard for customers for the past decade. In fact, some real estate web sites are now in the process of gathering as much information on their customers as some online dating sites, picking up data on age, children, finance, furnishing preferences and taste.

One company, California-based Geosemble, has come up with a model that adds in even more information. ‘The key here is that there are lots of different web sites that list home size, price, number of rooms, lot size, last purchase price and lots of detail on the home itself,’ says the company’s CEO Andre Doummitt. ‘However, what homebuyers need is a simple way to understand the context that the house sits in, i.e. the neighborhood, surrounding businesses, shops, restaurants, news articles about the area, events, and things like flood plains, nearby planned construction of buildings, rail lines, pollution sites.

‘In the old days, you had to gumshoe that sort of information, but it’s data that is really crucial to you, not just because of the investment that a house represents but also because of what difference that information can make to your quality of life.’

Going global
According experts, such as Inman News’ technology columnist, Professor Bernice Ross, it’s information that will increasingly be demanded, as a global market for real estate develops following the move to the web.

Investors are already taking advantage of the current economic climate and buying properties in the US sight unseen from as far afield as South America and the Middle East. Professor Ross predicts this remote viewing process will encourage people to decide that they want to move to a particular area – and then find ways of doing so, rather than seeing employment prospects as the sole driver.

Competition vs collaboration
Such an appetite for information, and its availability, will, according to Hanawa, see the beginnings of the competition between media and real estate websites, as each seek to adopt their models to attract customers and viewers.

‘What we are seeing happening is two industries seeking to redefine each other by adapting and developing the technology that has thrown their old business models up into the air,’ says Aamir Butt, CEO of 3D real estate specialists United Lane and an adviser on new technology models for Atlanta Real Estate. ‘Due to the freefall generated by the present market conditions which has put them under enormous pressure, both sectors are trying to build business models that not only replicate what they once did, but also take on new functions that they do not have any real expertise in.’

Butt predicts that the winners will be those who realise that, rather than competing, they should be working together, a view echoed by Hanawa. ‘Some media companies will join forces with brokerages to get listings in exchange for advertising,’ she says.  ‘Media companies have the local content, news, demographics and the local audience.  As media companies continue to improve their online presence with more community journalism – blogs and opinion polls – consumers will come to rely on these sites to gauge the value of property, and research the area where they want to live.’

However, Hanawa adds that any trend towards virtual buying in the residential market will be small. ‘Even in the future, virtual transactions will be rare, at least for home sales.  People may send info to their phone and Twitter about a place they are looking at, but they are unlikely to purchase without physically visiting the property and checking out the community and potential neighbors.  Buyers will be much more knowledgeable about properties and their locations before making a purchase decision.’

And, with Geosemble’s technology and websites such as rottenneighbor.com, checking out the neighbors is now more than a distinct possibility.