Webware

"Things are very good at Zillow," Rich Barton, CEO of the online real estate company, was telling me. We're in the thick of the worst economic crisis of a generation and a depressed real estate market, so this means that Barton is either a very clever CEO or an audacious liar. I was at first inclined to believe the latter, but left the interview convinced of the former. He's a canny Web entrepreneur.

It hasn't all been smooth sailing for Zillow. In October, Barton laid off about 25 percent of Zillow's staff. He said he did it because he "couldn't forecast" his business and had to assume the worst scenario. However, the trough following the 2008 bust ended up not being as bad as he thought it was going to be for Zillow, and the company is now back up to its October 2008 staffing level of about 130 people.

Zillow is currently growing, but in a different way than it was before. Page views and unique visitors are up. The site had 8.8 million unique visitors in March, which is a 70 percent year-over-year growth. Zillow has the twice the users at this point as Barton's team originally projected. However, the revenue per unique user is down to a third of what he expected it would be.

Rich Barton builds cheap sites that focus on expensive audiences.

(Credit: Rafe Needleman/CNET)

There was, of course, a fundamental shift in user behavior after the bust. But it wasn't all bad. Buying activity on Zillow went down, though site traffic went up. As Barton says, "Buyers are on the sidelines, but not passively." They're monitoring the market, he says, looking for the time to jump in, to either buy or sell. Like the Zillow site itself, physical open houses are crowded, he says. The browsing activity doesn't get reflected in home transaction data. Neither sales volumes nor prices are going up, even if people are circling open houses and online real estate sites like buzzards.

Until the market becomes a place where buyers and sellers want to engage again, they continue to gather information. So Barton continues to sell advertising and new data services.

I told Barton I thought Zillow was "real estate porn." Barton accepts this--his business at the moment is based on it--and says simply, "there's a practicality to real estate porn. People are dreaming about their next home. That's positive. They're planning."

Barton is making access to that real estate porn easier. A new iPhone app shows you the Zillow price estimate ("Zestimate") of homes as you walk or drive by them, and Barton says 10 percent to 20 percent of the site's queries are coming from the iPhone app, which was downloaded 234,000 times in its first 12 days of release.

Barton says two-thirds of the site's users are in the market right now, though when he says "in the market" he means waiting for the market to look good enough to buy or sell. He says 21.9 percent of the homeowners on Zillow are underwater on their homes (they owe more on the mortgage than the home is currently worth), and that the overall Zillow home value index "is in freefall, down 14 percent year over year." There are, he says, very few markets where the acceleration of the housing price decline is slowing--but those are mostly the markets that got hit the worst first, such as Los Angeles and Modesto, Calif.

But listing homes in foreclosure on Zillow is a growth business. "They advertise!" Barton says.

LoanMarket.net announced on Monday that it has launched its online marketplace for buying and selling mortgages.

According to the company, its service allows both buyers and sellers to come together in a "neutral, open marketplace" to trade mortgages and other real-estate secured note investments.

The site has a variety of sellers, including mortgage originators, banks, and lending institutions, mortgage pool investors, small private investors, and seller carry-back note holders. All the notes listed on the site include current market value information, as well as a photo of the property taken within 14 days of the post. All vital loan documentation, such as the note, deed, and title will also be included in the listing. The site is live now.

Vertical ad network Glam Media raised $10 million in a round of funding that was led by Mizuho Bank, the company announced Monday. According to the company, it will use the funding to continue its expansion in the United States, and grow its operation in Japan and Germany.

Glam Media also announced on Monday that it has formed a joint venture with agencies and media companies in Japan. Dubbed Glam Media Japan, the venture combines the country's third-largest advertising agency, Asatsu-DK, and a variety of other Japanese firms with Glam.

Revolution Money, a company that helps users reduce the cost of credit cards online, announced on Monday that it has raised $42 million in a Series C round of funding led by Goldman Sachs. Citigroup and Morgan Stanley also participated in the round. The company plans to use the funding to grow its cost reduction operation.

Online real-estate search site Zillow announced on Monday that it has inked deals with Leads360 and LoanSifter, firms that specialize in real-estate leads and loan information, respectively, to improve the site's Mortgage Marketplace.

Users can now follow leads and use LoanSifter's loan-pricing engine to get accurate information about how much a mortgaged property will really cost. The new features are available now on Zillow.

Last week, I looked at five real estate search sites and discussed their merits as tools for searching for a home. So now that you have that dream house picked out, it's time you get down to the business of finding a real estate agent and researching both the home itself, and the neighborhood it's in--just to make sure it's still a place you want to live.

After all, moving to a new home can't be as simple as finding a home you like and buying it immediately, right?

Find your real estate agent with DoorFly
Once you've found the home you like on sites like Trulia or Realtor.com, you have to find a real estate agent to help you look at homes, secure the best deal, and get you into your new abode. But finding the best real estate agent isn't always easy.

That's where DoorFly comes in. Instead of calling different real estate firms to find the best agent, you can use DoorFly to explain your needs and watch as real estate agents bid to work with you.

When you first sign up for DoorFly, you're asked to provide the area where you'd like to live, your home-buying needs, an affordable price you're willing to pay, and desired home features. That information is then posted on the site and will be viewed by real estate agents who also signed up. Interested agents will contact you and inform you of their knowledge and experience. But here's the kicker--they will also offer an incentive rebate from their commission at closing to sweeten the pot. I found that sometimes that discount is 5 percent of their fee, but it can be up to 20 percent off, depending on the market. Either way, it's a great way to save some money.

Real estate agents bid for your business on DoorFly.

(Credit: DoorFly)

As interesting and useful as DoorFly can be, I was disappointed with its general lack of support. Granted, it's a start-up that few people have heard about, but so far, the site only has real estate agents from Indiana, Missouri, Texas, and North Carolina using the site. That's obviously an issue for those who wish to move elsewhere in the U.S. and one that DoorFly can hopefully address at some point in the future.

DoorFly is a compelling and unique service, and you should look at if you want to buy a home in one of those locations. It's easy to use, the real estate agents offer good deals, and generally, they seem to be knowledgeable.

Research mortgages and neighborhoods with HomeThinking
HomeThinking is designed quite well. When you're brought to the main page, you can quickly and easily find a real estate agent in any of the 50 U.S. states, perform research on mortgages in cities and towns across the country, or gain knowledge about different neighborhoods in major markets. It's a great resource if you're unsure whether you want to move to a specific location.

Heat maps give you a good idea of where property is selling.

(Credit: HomeThinking)

When I started evaluating HomeThinking, I first looked for a real estate agent in both big cities like New York and San Francisco, as well as small suburbs in my area. In all cases, the site returned a slew of real estate agents from companies both big and small. It was outstanding.

HomeThinking's neighborhood search is also a great feature that allows you to compare big cities, as well as mid-level markets like Akron, Ohio. When you perform a comparison, the site delivers a slew of results that examine which areas of the new city resemble your current city, as well as reviews by those who live there.

For example, HomeThinking claims that those living in the Castro-Upper Market area of San Francisco will find a similar lifestyle in New York City's West Village. It's a nice feature, but it would have been nice if more information was available. Simply telling me where to move if I like the scene I live in now won't help all that much.

But HomeThinking's best feature is its mortgage resource page, which takes an in-depth look into everything you ever wanted to know about mortgages in the location to which you're planning to move. Whether you're researching suburbs or big cities, the site will deliver the risk of a sub-prime mortgage crisis, leading lenders in the area, the average loan size, number of rejected applications, and much more. It even shows a heat map detailing where the majority of people are trying to buy homes. HomeThinking's mortgage research tool is best I've seen.

Real-estate sites had some tough times last week. First, Redfin, an online brokerage for residential real estate, announced that it was laying off 20 percent of its staff, then Zillow, a service that delivers home values and lists sales, announced that it was forced to lay off 25 percent of its workforce.

But Trulia, which lets buyers find homes for sale across the United States, says it has no layoff plans and that it has enjoyed so much growth, it's actually looking to expand.

"We are not making any layoffs. All companies need to be smart in this environment and adjust to the market movements," Pete Flint, CEO and co-founder of Trulia, said in an interview. "As a company, we are in a strong position. We always believed that we had to be aggressive but fiscally responsible, and that is why we are in the position we are (in) today. In fact, we are still making a few select hires, where they are important to our revenue growth."

Trulia has been one of the most proactive companies in the online real-estate market since its inception. The company formed a strategic partnership with Dash GPS to let Dash users find homes that are for sale in their area by connecting to the Trulia database, and its advertising network has proven to be a key component in creating a sound financial structure.

Regardless, Trulia is operating in an extremely competitive market. With competitors such as Zillow, Redfin, and DotHomes, it won't be easy for the company to stay ahead of a significant economic downturn, now that its competitors have significantly reduced expenses. But with strong growth and solid performance, Trulia believes that it can adapt to any financial issue that may arise.

Zillow, the online resource to find out how much your home is worth, announced that it has laid off 25 percent of its workforce to prepare for what it expects will be an extremely severe economic environment.

"This week we are reducing our workforce by 25 percent, Rich Barton, Zillow's CEO said in a blog post. "This was an incredibly painful decision for me and the leadership team, but, in the end, we concluded that we had no choice but to securely batten down the hatches as we sail into a major economic storm.

"The unprecedented economic events that are playing out on a global stage began in our own industry and have made a prolonged recession likely, in our judgment," he added.

Barton went on to explain that despite having a sizable cash reserve, the company is still not profitable and the best move for Zillow at this juncture was to reduce employee expenses to "emerge from the other side of the recession in a very strong position, even if the recession lasts many years."

Barton was quick to point that his decision to cut staff was not the result of lackluster performance. According to the CEO, Zillow recorded 5.4 million unique visitors last month, which represented a 42 percent increase over the same period last year. And although that should improve its financial condition, Zillow is still losing money each month, which made these layoffs necessary.

Zillow is just the latest of many technology companies to announce layoffs over the past week.

Zillow (previous coverage), a site for home buyers, sellers, and lookie-loos, is getting a broader focus today: on neighborhoods, not just houses. As such, it could become a resource for people neither selling or buying, but rather just living.

An active Zillow neighborhood page.

(Credit: Zillow)

Neighborhoods now have their own pages, which include demographic info (I'm surrounded by lawyers who ride motorcycles, apparently) listings of homes for sale, and community features. There are discussion boards and neighbor directories, which could, theoretically, make Zillow a useful resource for people who live there. I'd find it useful, for example, if there was an active discussion board about issues facing my little slice of the world: parking, schools, restaurants, and so on.

Right now, though, Yelp is my resource for local commerce. It even has reviews of the auto shop on our main drag, for example. But a discussion on noncommercial topics would also be good, and Zillow could provide that.

That's the dream, anyway. But while the new neighborhood features are very useful for buyers investigating places they might want to move to (and sellers trying convince them), the community for residents won't work unless each neighborhood gets a critical mass of residents online who start to view Zillow as more than a real estate site. I don't know how Zillow gets there from here without losing its focus on home sales.

See also: Backfence; FatDoor (preview); and StreetAdvisor (review).

HALF MOON BAY, Calif.--If you're embarrassed about the value of your house on Zillow, don't fret. You can upgrade it.

The Web site, which tries to determine the value of houses and then serves up the data through its site, has a process in which users can add additional information about their homes that may not be reflected in the public records the company scours, according to Amy Bohutinsky, director of communications at the ThinkEquity Partners' Think Tomorrow Today conference taking place at Half Moon Bay, Calif. (not to be confused with the I Know You Are, But What Am I symposium in nearby El Granada).

Thus, if you've had a major kitchen upgrade or turned the garage into a Jungle Room, you can submit the information to Zillow. In turn, the amendments can upgrade the value of your home.

So far, around 700,000 homeowners have done this, she said. You can learn about the process here.

She also whipped out some interesting facts about the site. Around 33 million homes have been viewed at least once. 90 percent of its users own a home and 50 percent are currently buying or selling a home (which explains why you may want to get those amendments in).

She also said that the price estimates Zillow produces are within a 7.2 percent margin of error on average and are within a 4.3 margin of average within the San Francisco Bay Area. Thus, if Zillow spits out an estimate of $430,000 on a tumbledown shack near a fish processing plant in Sausalito, it's probably pretty close.

Zillow is launching a few important community features on Wednesday. The sexy new addition is Home Q&A: Zillow will now let users ask questions about any property on the map. Anyone can answer them. Presumably, real estate agents will be the ones doing most of the answering, both to make homes sell more quickly and to appear knowledgeable to buyers who are interested in other properties they are representing. Homeowners, or anyone else for that matter, also can answer questions the community poses. All answers can be rated for helpfulness.

Home Q&A questions will appear on the Zillow front page, but at launch they won't be geographically targeted: you'll see a selection of all the questions on the system, not the ones relevant to your location. Zillow said it is moving toward launching a personalized home page, though.

Houses can now have questions (and answers) attached to them.

(Credit: Zillow)

The less sexy, but more important feature for the real estate industry, is Zillow's new user profile pages. Again, this will likely be populated by agents, since it's where all of a user's answers, questions, and helpfulness ratings will be aggregated. A buyer could get a pretty good feel for the knowledge and attitude of an agent on one of these user pages. The analysis on an agent won't be as deep as it would be with a rating tool like My-Currency (review), but since the community on Zillow is much larger and more engaged than on any upstart real estate site, it's still likely to be very useful. Zillow spokespersons estimate that of the site's four million visitors a month, 150,000 are agents. I don't think it will be too long before most of them set up user pages on Zillow, creating what is essentially a new directory of real estate agents -- but with user ratings attached to them.

There's also a fantastic new self-serve advertising system. I say fantastic because I'm tired of seeing Google's ads everywhere -- Google's service, while effective, isn't specialized for particular industries. Zillow's ad system will allow ZIP code-targeted advertising for agents, homes for sale, or local services companies, and the rates are reasonable: a penny a view, for a little ad with a graphic in it. (Zillow will still use Google ads for "fill-in," I was told.)

Finally, any user on Zillow can now flag a home as "for sale." That's something buyers' agents are likely to do, and it's a sneaky way to get around the fact that Zillow can't use the real estate industry's incumbent listing service, the MLS. After a home is flagged, the owner or agent can "take over" the listing, or, presumably, reverse it if the home is not in fact for sale.

Zillow is one of best examples of what Web 2.0 can be: It's got useful and unique data, it's fun and addictive to use, and with these changes it becomes even more of a community site. Plus, unlike most other Web 2.0 experiments, Zillow is becoming a central player in a market where there's real money changing hands.

More Zillow-supplied screenshots after the jump.

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My-Currency.com, launching at Demo 07 on Thursday, is a complicated solution to a very simple problem: people can't tell if real estate agents are any good.

My-Currency is designed to bust through friends' recommendations and real-estate advertising campaigns in order to help you find the agents with the best knowledge of their market, as shown by how well they predict the outcomes of real estate transactions.

I predict this house will sell for less than asking.

(Credit: CNET Networks)

The site is built around a prediction market. It asks agents to predict how much properties will sell for. Agents "wager their reputation," and put in their predicted sales price of houses, as well as conviction levels for predictions. Once properties sell, the system is able to rank the agents who made the predictions.

My-Currency also has an answers system (like the Answers engines on Yahoo and LinkedIn), and awards professionals for replying to users' queries, since bedside manner does count for something in a salesperson.

The site is pretty, but it could be more approachable (although the team was making changes to the user interface as I wrote this). And it's named wrong: If I'm looking for a good real estate agent, I'm more likely to go to rate-an-agent.com, not something with a name that doesn't convey what the site is really about.

But I do love the idea. Real estate agents earn absurd commissions, and there's no real way for customers to gauge an agent's knowledge or performance. This technology could help level the playing field, and that's great.

In the future, CEO Karim Tahawi plans to use the My-currency platform for sites that rate other professionals, like financial advisers and stock brokers.