WatchMost "free" real estate data is actually just marketing, trying to get you to pay as much as possible.
What data would really be valuable to buyers? Valuable enough to pay for? Some possibilities:
* Addresses of property likely to come on the market soon.
* All liens on the property, especially mortgages.
* Scan of all property in a market by rent/buy ratio to quickly see how good the prices actually are.
* Local employment change info, because that drives housing up or down.
What else would the savvy buyer really want to know?
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Atlanta, GA
Don't forget easements and HOA fees/regulations.
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Patrick says
This would be a gold mine. Include the contact information of the potential seller.
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46 male
Menlo Park, CA
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Raw says
How best to get addresses of houses likely to be for sale soon?
One way is to look through public record filings for recent death, divorce, and bankruptcy proceedings.
Another way is just to pay people for what they know. How to judge how much such a lead is worth?
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Scottsdale, AZ
robertoaribas's website
Patrick says
great idea! How is that mind reading machine coming along? we could add it to the google cars that drive around, and it could read the minds of the homeowners, thus knowing which ones are pondering selling their homes, and for how much!Patrick says
Not rally worth anything to you, until you are negotiating with the seller, and even then, not worth much... people don't sell their homes for less, just because they owe less, turns out, just like buyers like money, sellers do to. Patrick says
zillow does that already, they have a values "zestimate" and a "rent zestimate" both are horridly off however, because, there can be grand differences between 2 40 year old homes that zillow data can't see. Patrick says
that is kind of available too; I read city data on employment, etc. on occassion. thing is, month to month, that isn't really going to be as much of a driver of short term, or even long term real estate price changes as you are thinking. In fact ,the only kind of person who would want this, is the "paralysis by analysis" type; You don't need monthly data to know detroit lost jobs for decades...
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None of the above is valuable. Even if they are, they cost more to find than what it is worth.
I'm thinking housing can be applied in a social media context just like jobs do with linkedin.
The seller can reach out to a database of prospective renter/buyer based on criterias. bedroom, locations, school district, costs. Followed by yelp like feedback system (pay on time, service calls, conditions, etc. ).
If I have a home to rent, I just need to reach out 100 prospective tenants who fit the criteria. The feedback/referral systems will help weed out problems. Between me, brothers, mom with 10 units, it would be worthwhile to pay for premium access.
If I have a home for sale, I just need to reach out to all the prospective buyer who fits the criteria. Once the database is large enough and I am reaching out to the right people, FSBO is truly possible. Imagine if I have a 3/2 1500sqft 1M home in 94127 for sale and there is a database that have 1K people who fits the exact profile/criteria and bam an email goes to those 1K people directly, good bye real estate agents.
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Seattle, WA
David Losh's website
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If you are asking for other income from your site here, there isn't anything any more that isn't public record.
As much as websites try to get more eyeballs by adding more content, there is nothing really to add.
What people should be paying for is insider information, which you come close to by asking about properties not yet on the market.
We have four properties next week that we will be cleaning so they can go onto the Real Estate market. We used to do everything from soup to nuts, yard work, paint, decorate, even design, to get a property ready for market, but now we just refer that out to others.
In terms of selling in today's market there are many things a seller can do to improve the price, and salability. It does depend on the property, and the budget. We also see a lot of polished poop out there.
Another thing people should pay for is to know what to buy. That is a lot more difficult in this fast market place.
What I think would be helpful is online bidding for projects a property might need. During the inspection process a buyer may be curious what it would cost to make this house a home.
We also used to get called out to properties to give estimates after the buyer had moved in. They would tell us the listing, or buyer's agent told them they could do something with the property that was completely unrealistic.
I would think a service that could give a rough estimate, and feasibility would have value.
There are already programs out there that can do the estimates, they would need to be tweeked to a specific project.
Some houses are worth owning, just like there are some classic cars that are worth owning.
With a car you need to know the point of diminished returns. If the car has a bent frame it's worth less. Rust can be a deal killer for a car no matter how classic it is.
We just looked at a house that is a classic, but by the time you added up all the little stuff it needed, it wasn't worth doing. The house literally, needed $200K worth of piddly little stuff to make it worth working on. It was just stupid stuff that could have easily been done over the past twenty years, but today it just added up to a mess.
So those are the things that I think would be unique content, but you would still have to advertise for revenue.
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1. Complete database of every appraisal (not just sale price and list price).
2. Complete database of every inspection report.
2a. Updated database of work completed, receipt, company who performs the job.
3. Zoning laws, restrictions, city and county regulations concerning permits, improvements, costs in a standardized FAQ type situation. This will include codes broken down for each on a neighborhood level. Most important would be any consideration that is looked at if you are purchasing the home to tear it down and build new. Something that would give you some indication of the costs or timelines of obtaining permits and approvals. Municipalities that populate this info quickly would be seen as friendly toward this type of infrastructure improvements, others who would be slow to add to this database would be considered unfriendly.
4. A database that collects information about the original build date of the home, and neighborhood by builder. In other words, known defects or code changes that would need to be addressed. (ie. before a certain year you didn't have to insulate, or ground outlets, and those homes would be confirmed not to have it, unless updated with the repair/inspection database.)
5. Number of names that have lived at the address and dates. Would give you some indication of rentals versus home owners, treatment of the home. People look down on rental cars as option of a used car purchase because they may have been abused. Same goes for homes.
6. Rates for all services. Electric, Garbage, Cable, Internet, Water, as compared to other locations.
7. Create a traffic database from the daily traffic reports these days, and do some numbers to determine average destination time to locations based on time of day, day, and month to provide some average of traveling conditions.
8. Noise pollution and crime data. Air traffic, highway traffic, rail traffic contributions.
9. EPA hazard and geological hazard reports.
Some of these are available, but not organized, or centralized. Other times people don't understand or know how to interpolate the data. It is guaranteed that most of it goes un(under)reported because it could be used to lower home values as compared to others. Right now $ per sq/ft, bedroom/bath, town, and school ratings are basically the only things that affect home prices. With all the listed above, it could result in monumental change of how we price homes.
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This day and age most of that information is free. There are already many companies that search public records to find potential sales. Trouble with the law? Expect a mailbox stuffed to max capacity for the next week with sleazy lawyer ads. House broken into? Expect Brinks, First Alarm, Pinnacle etc. to be at your doorstep 5 nights a week trying to sell you the latest laser guided criminal tracking home security system they have.
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Here is a criteria list for people most likely to sell that is already being used from public information.
Those in foreclosure
Behind on property taxes
Owners residing out of state.
You have to do a lot of expensive marketing and spend time to get the good deals. It would be awesome if other criteria could somehow be incorporated that would identify a higher liklihood of a property owner willing to sell at a good price. Employment issues, divorce, health or financial problems would all be factors.
I think credit reporting bureaus could generate these lists from the mountain of data they already own.
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Redwood City, CA
There are several issues here. One is that investors don't buy up two dozen properties at once. They buy them up over time. Over long periods of time. Years and years. Thus each property is different and has different issues attached with it. No two properties are the same, no two metrics will be the same. There are just too many elements to consider when buying. What kind of niche market have you found? Are you great at being a slum lord? Are you great at selling a service and lifestyle?
Almost every property is a one off, unless you're a huge company and can just wave your hand and say I'll take it all. Because each property is a one off, there isn't any one set of data that is likely to help them buy.
If you're investing in a certain city, you don't have the luxury of specifying every aspect of the house. There simply aren't that many units out there. There might only be 1-5 units out there that meet your criteria each year. From there, each of those will have something different. Higher/Lower HOA's, newer/older, distance from a hwy entrance, distance to a good school, distance to a train crossing, etc. Each property is very different.
Offering up services to landlords or investors after they own a property might be interesting though.
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Patrick says
LOL! a warning statement describing the history of past boom and busts in US real estate..
it seems the last crop of buyers forgot how deep prices sank from 1989 to 1995.
go figure..so instead of being more prudent, they repeated history 10x harder.
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Baltimore, MD
What Real Estate Info Is Worth Paying For?
Long answer:
What's the minimum price any given seller would accept. The real number of bids on a house and the nature of them (financing or other contingencies).
Short answer:
Nothing that you are likely to be able to collect.
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46 male
Menlo Park, CA
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SFace says
How would you deal with the sleazeball realtors who would just spam that list of 1K people?
They would pretend to be FSBO sellers just to get access.
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Patrick says
When I posted a job for my company, recruiters were spamming by email with terrific candidates (as claimed).
basically no headhunter fees is offered yet so if you want to still send their resume, go ahead.
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46 male
Menlo Park, CA
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But they were still spamming, which was a pain, right?
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How painful can it be? I'm trying to fill a position (or sell a place, rent a home) so a little bit of effort kind of comes with the terrortory. I can ignore or not ignore at my descretion. Reading or not reading emails is not that hard in the overall scheme of things.
Don't underestimate people.
When you look for a job, do you say, oh god, recruiter! You can decide to work with them or bypass them, correct? I'm sure you know the pros and cons.
Same thing in a housing context. You can choose to work with a representive or not based on the facts as you understand them. The key is having a realisitic choice in the first place.
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San Francisco, CA
I just spent the pat 30 minutes trying to find the nominal median household income in Miami for 2000 and 2010. Holy jeez was that annoying as hell. For some reason, most people care about the real median household income ;) Or they break things down by zip code (stupid census data).
Just to make sure I'm not crazy, to forecast (nominal) housing price changes you should look at:
1. Population increases
2. Nominal income increases
3. Nominal rent increases
4. Building stock increases? (Does this exist?)
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San Francisco, CA
Oh, and 5. mortgage rates.
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Scottsdale, AZ
robertoaribas's website
ChrisKolmar says
backtest any of this, and you'll see it has predicted exactly diddly squat about any market, ever, in history...
paralysis by analysis... are you an engineer by any chance?
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San Francisco, CA
Not actually trying to predict anything. Guess I should have said 'fundamentals'.
Nah, economist.
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ChrisKolmar says
and at the end you really find it all about inflation... even after some 35 yeas of population growth, income growth, rents, building supply, and lower rates.. places like Miami barely kept up with inflation. Read Robert Shiller Irrational Exhubeance 2nd Edition.
so skip 1-5 and go straight to what prices were back in 1995 and slap some additional 40% to the price... and there you have it... plain simple and accurate.
http://web.archive.org/web/20110722140059/http://www.housingbubblebust.com/OFHEO/Major/Florida.html
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Patrick says
Zipskinny is a pretty useful tool for assessing local median salaries.
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Cap rates,
One of the things a disagree with Patrick.net is the uniformity of rent/price ratio to determine value. It’s basically a long winded answer to say what is the cap rate (to account for property tax and maintenance and other fixed costs which varies by type of property and where) and Patrick presumes they are all the same, the Ghetto is underpriced (good deals) while prime is overpriced (bad deals), which is opposite of reality and the natural conclusion of a linear price/rent model.
A high cap rate may in fact mean "overvalue" while a low cap rate may be, "underpriced". It's all about understanding below and how it is applied in the real world.
There are several components to cap rates I feel is worth discussing and you hear it all the time in business lingo and applied in big time transactions.
A location – A location likely means prime location. F location means ghetto.
A property – A property likely means new property, top condition. F property means the opposite.
Currently A location and A property are sold/transacted at low 4% cap rate (At the commercial, large apartment level). An A location and B property may be high 4% and so forth. F location and F property may be 25%, (just guessing). It just means better property and better locations have always been worth more.
So part of understanding SFH property in addition to price and rent is to understand A-F location/property. Prime location/prime property will always come with a much lower cap rate. The question is where can buyer’s find the inefficiencies. It will be nice to have data that provides this kind of color.