multiple listing service (MLS) systems used by real estate agents to share property information were, for the most part, closed to outsiders.
The solution was to offer free ads. “For the first years of the company, we basically went around to all of the major brokers and franchise holders with a very simple pitch: advertise your listings on Trulia for free,” says Flint. “That helped to grow the consumer audience, and we built the consumer experience on top of that, the data tools and the mapping.”
From the beginning, Trulia’s main appeal to consumers has rested in the mountains of data it provides on homes and neighborhoods. For each home listing, there’s all the information you’d expect about the property itself: price, square footage, lot size, photos, and the like. But in addition, the site will show nearby comparably-sized or comparably-priced properties; sales trends for the neighborhood (such as how much listing prices in the area decline or rise over time); the locations of nearby schools; crime rates; and sales information for recently sold homes. Trulia also features “heat” maps showing which neighborhoods have the highest and lowest average prices, and which neighborhoods are attracting the most searches.
Bringing in all that data “changed what was a one-dimensional experience, like a Craigslist listing, to a two-dimensional experience,” says Flint. These days, you can also add a third, social dimension: the “Trulia Voices” section of the site, where home buyers can post questions for locals or real estate agents. One user this week, for example, wanted advice on the best low-crime zip codes in San Antonio, TX; another wondered about utility rates in Las Vegas.
Zillow, it must be said, offers many of the same kinds of data, as well as a much-loved feature called the “Zestimate,” an algorithmic estimate of a home’s true value based on Zillow’s accumulated data. But Flint contends that Trulia offers “a more comprehensive view, with unique information [users] can’t find anywhere else,” such as information from Yelp on nearby restaurants and other businesses. He also says Trulia users tend to be more “transaction-ready.” “We build our product for transaction-focused buyers who are actually looking to purchase or rent a property, not the casual user,” he says.
That’s music to the ears of real estate agents, who have three ways to get exposure on Trulia. It’s still free to get a property listed on the site. But to get “featured” positioning, agents need to sign up for a Trulia Pro subscription, with the fee corresponding to the number of promoted listings. Then there’s Trulia Local Ads, which serves agents who “want massive exposure in a micro market,” in Flint’s words. Agents can put display ads on anywhere from 10 percent to 100 percent of the pages Trulia shows for a given zip code. If an agent wants to lock out the competition by buying all of the ads in a given location, all just takes cash. And patience—in many regions there’s a long list of agents waiting for ad inventory to open up, according to Ken Shuman, Trulia’s head of communications.
But realtors aren’t united in their love for the new middlemen. Just this week, San Diego brokerage ARG Abbott Realty Group announced it was barring Trulia, Zillow, and other sites from publishing its listings. ARG president Jim Abbott argues in this YouTube video that firms that let the online services publish their listings are, in effect, giving away business to competitors while enriching Trulia and Zillow. “These sites are nothing more than slick advertising platforms,” Abbott says.
Big Data and Shadow Inventory
Flint and Inkinen definitely picked an interesting time to get into the real estate business. Sales of new homes in the United States hit an all-time high of 1,283,000 in 2005, the year the company was founded, and have been plummeting ever since—the 2011 figure of 302,000 was the lowest in more than half a century. Sales of existing homes have begun to bounce back after the 2007-2009 recession, but only because so many foreclosed and other “distressed” properties are now available at fire-sale prices. So, how has a company that feeds off the real estate industry survived the worst real estate crash since the 1920s?
The main effect of the downturn, from Trulia’s point of view, was that “the big advertisers disappeared,” Flint says. The large national real-estate chains stopped advertising, which meant that
