Capital & Code

Let us start with some good news.

It seems that the Spanish real estate sites have not been affected by this economic down turn, in a recent study conducted by British giant comSCORE. Here is the report.

The reports states clearly that there has been a spike in the amount of hits received by the most popular sites like Trovit, Fotocasa, Idealista and others. So it maybe that we are seeing an economic downturn but that has not decreased the necessity for a household or an apartment. Certainly not here in Spain. I guess we should see similar results in most developed countries.

Most of these websites are search and vertical portals, so they follow a pretty straight forward business model as in other offerings by their USA counterparts. As we are seeing a whole lot changes, now for the bad news.

It seems that Zillow is shrinking since it´s last month it began to layoff a quarter of its staff and now it seems it will change again in its business model, behaving more like a traditional real estate site, so it has cut most of the licenses for brokerage, except in Texas and in Washington. It has partnered with Weichart Realtors.

I saw on AgentGenius that Redfin has also done a couple of changes internally and becoming a “real” real estate broker. Good news for consumers and bad news for the brokerage market, but that is a fact of economics, your partners sometimes (most of the time) become your competitors eventually. They have gathered a lot of information from consumers and they are applying it to their business model, that sounds logical…… there are a couple of cry babies out there, but such is life, so get on with it and start competing. You say you do not have the skills or VC back up, tough luck….

But there are opportunities out there. Start looking for them, see what your local customers are asking for. That is a good place to begin anyway, the Internet is such a big market that it is normal that big company’s like Redfin, Zillow and others are competing for it. Do not panic, there are plenty of local niche markets they will not be getting in to, so go and find them.

I will be posting soon about my findings. We will wait no longer.

Stay tuned.

Best regards.

I ran into the following video from London Barcamp No.3.

The speaker is a guy from Holland named Reiner Zwitserloot talking about monetization from the “Long Tail”. The video is here.

It was quite interesting to get a perspective on how peoples behaviour of paying for services and buying products is changing dramatically.

This video tell a good story on how the consumers are more willing to pay for a service or product, where they can dictate the price based on the level of service and the quality of the product.

The housing and real estate industry should take a good long hard look, on how they are doing business right now and how this could pose a problem for the younger generation. This new era of prosumers.

I have been browsing the web for groups of real estate agents and/or professionals in Europe, to start networking with, but most of all, get a first hand view on how they are coping with today’s troubled times.

But have come with nothing lately. I do have found in the USA, a couple of movements(blogfiesta, reblogworld, rebarcamp, carnivalofrealestate )coming….from San Francisco (as always). I do know that realtor’s are a close group and they are starting to embrace the OPEN mentality that its so common in the Web 2.0 community, but it is lacking in Europe and Latinamerica as well.

In Europe where only a few company’s have the power and control over the market share of the housing development, which in turn is loosely or non related to the software developments, there are a lot of offerings in the Internet for applications, that are mainly used by homeowners and agents and every one is highly secretive on how they are doing business. Also the results of sales that are done through a black market is high. Since there is no MLS system everybody can plug into.

The same happens in Latinamerica. With the great exception that there are very few offerings on the Internet and companies offering such services. You will find your normal wannabe Craigslist copycats, but they are not effective enough to gain any traction at all, so there are few agents promoting there. Also you have a digital divide to conquer. Which is difficult for the big companies like Century21, Coldwellbanker and REMAX, to try and train there personnel, but ¿what about the local agents or agencies?, these power houses are playing at an advantage, but at the same time, they are setting it up, so that they cannot have access to the “long tail” of the local market. I know that it might not be profitable enough right now, but when it becomes, it will be so difficult for them to get a hold of it. But I will talk about this later on.

This creates a lack of leadership and community in the industry, which is the way it has always been, but you can see the end result right now. If they would have worked together and share their problems financially and also strategically (with out compromising trade secrets), I think they would not have ended up with such a mess. Having a little bit more control on the situation. Instead of poring more money to out do each other.

Both scenarios happened in the USA, UK and Spain. I know that the financial sectors are a whole world apart, from the real estate and software sectors. But there are ways to leverage the data from all three parties. Through information sharing on official and unofficial channels. Which are done (I guess…..), but not openly. They think this is to there advantage, but they are laking the most important elements of this new age of Wikinomics.

• Openness.
• Peering.
• Sharing.
• Behaving Glocal (Global-Local)

I think there is much to be done in the real estate sector, the old dinosaurs need to start learning the new ways to engage and I think they have a lot of work “pending” to be done. The people and organizations need to work together, form groups or events that gather every one, so they can start discussing openly on how to start working pro actively to get out of this mess.

The big enterprises might stay put and wait for the dust to settle. But the storm has already moved quite a bit of dirt from their ground. Which is still not firm enough. I hope all those people paying their mortgages are not the ones to sustain them….

For the last 12 months I have been checking the real estate sector in close detail and have been indulging in all the happenings over in America and Europe.

Which to my surprise have been one of the worst years, and it seems to be just the beginning. Where in the USA, lots of company’s have gone down the drain and it seems to be happening here in Spain as well.

It is no surprise, that this “subprime” crisis has drag a lot of people projects, either software and housing developments in to standby or thrown all together out the window.

I think there is room for improvement and there are many opportunities in this sector. Many will be pessimistic and they are probably right, the markets wont be stabilizing any time soon. Neither are countries expected to be growing financially as expected, going backwards is the case scenario. Money is being withdrawn from investments in housing, but there necessities to be filled and digital divides to be closed.

By standing aside and waiting for the markets to heal, will not solve any problems, it will just make it worse.

Now that a new kind of media outlet is emerging, the so called “2.0″ era. But if your reading this, you know that era has gone down the drain with the markets.

You know why? Because it did not solve any “real” problems.

So what is era “3.0″……..semantic web and what not. That is jargon….if you tell me. Even thought there are a bunch of great technology’s being developed under this umbrella. For me 3.0 is:

• Solving day to day digital and physical problems for an individual, business, organization or group of individuals.
• It has to be an interactive application, not just read and write, but a morphing system, that learns through the process of communication.
• Data is something to be arranged by the system. I just put it some place, assigned some descriptions and the system takes care of it.
• Every body is the owner of their information and co.authors of the end result of “mashing” together all the data, in proportion of what they have been involved in the process.

How does all this relate to real estate, well for starters in the USA, you have the MLS dilemma, that is just such a pain to interact with and in the less developed countries you have no system at all for cataloging what has been developed.

The central nervous system is either to rigidly developed or none has been deployed.

I will be sharing my views on how we can solve this problem and some initiatives in the software business to tackle the necessities of this deteriorating sector. That by the help of technology and the financial sector not screwing around anymore(hopefully), will come back to life.

The era of “ReFenix” (i am using it in spanish), and like the mythical creature, grows………dies and out of the hashes it is REborn.