Monthly Archives: September 2012

When Life Hands You Citrons, Make Citronade: In Which I Differ With Smart Analysts


A cool refreshing drink…

I’ve gotten more than one request from readers to discuss the brutal analysis report on Zillow by Citron Research. I didn’t think I’d have much to add to a stock analyst’s report that tends to be heavy on financial metrics and such, but it turns out that the Citron Research report is indeed worth reading. And opining about. Seeing as how I don’t own any Zillow, haven’t shorted Zillow — or anyone else, and no one is paying me for this post… you may value my thoughts at what you’ve paid for them.

Fundamentally, Citron’s report isn’t an attack solely on Zillow; it’s an attack on the entire business model of Zillow, Trulia,, and everyone else in the “aggregation” business:

We can all agree the internet is not a new technology. Internet-generated leads to realtors have been getting sold for close to 15 years. Zillow itself has been around for seven years. If, after seven years and hundreds of millions of dollars of Wall Street’s money, all it has generated is a $100 million revenue run rate, why should the future be exponentially better than the past—especially with a plethora of well capitalized competition? That Zillow has captured a whopping 1% of real estate ad spend after seven years, definitively reveals a history of rejection of their model by their core market. This is not a broken business model; it is a business model that has never worked. (Emphasis in original.)

I think that’s going a step too far, and ignores some of the real simmering fault lines bubbling under the surface in the real estate industry. Since Citron isn’t new to covering the real estate technology business (“yes, we are veterans in this space”), I would have thought they’d be more aware of those fault lines. If they’re not, I invite them to subscribe to this here blog, since I often discuss them.

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Concerning REALTOR Politics, A Few Thoughts


NAR’s Washington DC Headquarters Building

I recently had the privilege of attending an event in Southern California with the Pacific West Association of REALTORS(r) at which a California state legislator spoke on issues facing the state. There were some really interesting Q&A with the brokers in attendance, ranging from property tax issues to whether brokers would be paying payroll taxes and worker’s comp for their agents.

But in light of two things I’ve read earlier today, I’m really starting to wonder if the idea of “real estate issues” is too narrow. Perhaps what NAR, state and local Associations, and all those interested in housing-related politics need to do is a hard rethink on just what constitutes political issues relevant to REALTORS.

Let’s get into it.

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Key Metrics of the Big Three Portals: Move, Trulia, Zillow



First of all, congratulations to Pete Flint and the team at Trulia for their successful IPO. Trulia is now TRLA on the NYSE. The environment wasn’t necessarily looking friendly for a real estate related IPO, but Pete and crew navigated it. So a heartfelt congratulations to you all.

Second, the thing that’s great for a blogger/commentator/bigmouth like me about Trulia going public is that we now have some real data to compare the three major portals on. (Well, sort of… see below for details.) Public companies have to make public filings, and tell the world how they’re doing. So I decided to take a look at some topline numbers, without a whole lot of detail, looking into the discussions, etc. There are some interesting things that pop up when you compare Move, Trulia, and Zillow across the board. Continue reading

Concerning QE3, A Few Thoughts…


I am not an economist, and I don’t play one on TV, and I didn’t stay at a Holiday Inn Express last night… but I kinda look like one. Plus, Seth Price of Placester isn’t an economist either as far as I know, although he’s a good friend who is not only brilliant but good looking to boot. So I figure, I’m gonna have some fun with a blogpost one of his guys (Colin Ryan, who also doesn’t appear to be an economist) recently wrote on the Placester blog (BTW, Placester is our web designer for HearItDirect). Think of it as sending them linklove with some fun economic/politics debates.

Colin thinks that QE3 — the plan by the Federal Reserve to buy $40B worth of mortgage bonds every month for the foreseeable future — is a wonderful thing for the housing market. He writes:

[I]f we’ve learned anything from all the measures the Fed and the government have taken to mitigate this recession, it’s that recovery will come not immediately, but gradually. As far as that goes, the Fed’s plans come with promises to extend near-zero interest rates well into 2015 and continue buying bonds aggressively until recovery is “well established.”

These promises say two important things to consumers. First, the kinds of assets that caused the housing collapse in the first place, long labeled toxic, are safe again. Indeed, by buying mortgage-backed securities the Fed—an authority when it comes to risk—is suggesting that they’re not only safe, but valuable.

Second, by committing to the long haul, the Fed is providing a safety net that will encourage optimism, coaxing consumers out of hiding. “Go ahead,” the Fed is saying, “buy/sell/build that home. We’ll be here to support you.”

So, in the short-term, this buying-up-of-bonds won’t necessarily have an effect on housing, but in the long run, Colin believes that the Fed will stimulate the housing market.

Where to begin… Well, let’s begin at the beginning.

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They Deserve Better

Above is the video I shared at Xplode San Antonio today, which was part of the Texas Association of REALTORS conference. This wasn’t a video we had made available to the public, but after my experience today, and a conversation with one of the attendees, we at HearItDirect decided this message needs to get out.

If you are a real estate professional, and you’re not outraged by Raymona’s story… you need to reconsider your career. Seriously. If you’re guilty of some of the stuff Raymona describes, you need to reconsider your career.

Let’s look at this video together a bit.

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