web traffic as market indicator
I got this suggestion from were1non, who writes in with the following note:
I was just looking at the webtraffic statistics for mls.ca, and realtor.com to see if there was any correlation between the housing collapse and traffic to these two sites (mls.ca being the biggest listing site in Canada, and realtor.com for the US). I think this is an interesting time because this is the first time we can use web statistics to gauge interest in the housing market.
If we look at the alexa graph for realtor.com we see traffic start a steady drop in 2006, almost mirroring the US housing market slump:
Oddly enough, when you look at the traffic graph for mls.ca it does almost exactly the same thing, and as we all know there was no Canadian housing market crash in 2006:
So is it a coincidence that traffic drops off at realtor.com in 2006? Or perhaps there are competition factors at work here - my initial thought was that sites like zillow in the US and individual realtor VOW sites in Canada may have siphoned off traffic from these two main sites, but looking at a graph for zillow.com we see the same drop:
So whats happening here? Are we seeing interest in real estate fade in North America as a whole, is the traffic more evenly distributed, or are there other factors at work? One thing seems likely to me: it really is different this time - this is the first real estate boom that has played out online and no matter what happens the sheer amount of data, analysis and opinions that are out there and easily accessible is unprecedented.
update: David G from Zillow left a comment about the unreliability of Alexa data, Zillow traffic is actually up 30% over the year despite the condition of the US market. These graphs track daily percentage reach and not absolute numbers but I still view them as an interesting proxy in the absence of more reliable web traffic data.
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February 25th, 2008 at 9:02 am
February 25th, 2008 at 9:15 am
Nonetheless, very interesting post.
February 25th, 2008 at 9:59 am
that well versed in stats but is this would seem to be an possibly inaccurate
way to measure interest. With the exponential expansion of net users and websites wouldn’t this be skewed over time?
Maybe check out some websites completely unrelated to housing and see what
the same time frame tells you, maybe nothing.
February 25th, 2008 at 10:18 am
February 25th, 2008 at 10:19 am
February 25th, 2008 at 10:28 am
Here’s googles traffic
Here’s the youtube graph
Are there other sites that would make for a better comparison?
February 25th, 2008 at 10:41 am
Even when using web metrics, I personally prefer a google trends review of the category’s important keywords than studying traffic to a few sites in the sector. Alexa is interesting but it’s totally unreliable and is therefore best used in conjunction with the other free tools, like compete. The alexa reach metric you quote here is in fact a fraction of total internet reach so even if it were accurate, it’s skewed by the relative popularity of every other site on the web. Zillow is a good example; our sites reach is in fact up 30% when compared to a year ago and has been growing steadily since we launched. That proves Alexa wrong but Zillow’s has grown despite a very real and measurable reduction in demand for housing.
February 25th, 2008 at 11:11 am
Yes there are developers sites, craigslist, and individual realtors,Most of Canadian boom is new constructed homes or currently under construction those does not appear on mls,those are only available on developers site or in the media,news papers etc.
buyers and sellers who does googles and yahoo can reach on realtors site rather than mls.
people in the surrounding area can directly reach to open houses.
February 25th, 2008 at 11:15 am
This is a very interesting post however I have to side with DG’s counter regarding the reliability of Alexa. Google “Alexa Reliability” and you’ll see most discount this metric.
I’m one of those VOW people providing traffic competition to the MLS and I can tell you that my site’s traffic has grown ever since I put VOW on.
Another good post was made on another real estate blog that as local boards improve there own local search they will attract more unique visitors who would have otherwise gone for a national search (MLS.ca, Realtor.com). It turns out that real estate (search and information) really is local. My AgentWill.com site has already surpassed my old imhome.ca site and I attribute that to the increasing amount of local information which many find desirable.
February 25th, 2008 at 11:26 am
February 25th, 2008 at 11:38 am
February 25th, 2008 at 11:42 am
As far as listing systems go the VIrtual Office system is good, but we have nothing that matches the easy interface and accessible depth of information that Zillow provides. Please make my day and tell me Zillow is looking at expanding into the Canadian market.
February 25th, 2008 at 11:58 am
People can argue all they want about reliability in the small scale. The fact of the matter is, there are not much buyers. Interest is low. Supply is increasing. The slope of new listing is increasing.
More supply, less demand, the conclusion is pretty simple. Price is going down.
2008 is the year for the crash of the Western Canadian Real Estate.
The faster we get this correction on it’s way, the faster we could move on with our lives.
February 25th, 2008 at 12:06 pm
I agree with that!
Went to a place last weekend…..only 1 other family looking at the place
February 25th, 2008 at 12:38 pm
I personally think mortgage applications and months of for sale inventory are the canaries in the coal-mine for a declining housing market but even there you’ll find mixed signals.
We do plan on expanding Zillow internationally and Canada’s definitely on the short list of places to go next. That said, I can also confirm that we’re not currently working on any international sites and have a pretty full list of projects for ‘08; so probably not this year.
February 25th, 2008 at 1:47 pm
February 25th, 2008 at 3:49 pm
With the departure of Coco’s links, and the lack of daily stats, I’m finding less and less of a reson go over there too.
Can the last one there please turn out the lights?
February 25th, 2008 at 4:20 pm
“Speaking of web traffic, does anyone else hear crickets chirping when they head over to Rob Chipman’s site?
With the departure of Coco’s links, and the lack of daily stats, I’m finding less and less of a reson go over there too.
Can the last one there please turn out the lights?”
What a sad joke; he tried to get people to pay to visit his blog. I just cut and paste the stats, and supply them for free as above.
And besides there are other realtors on the net that do an excellent job of supply stats as a courtesy to potential customers.
I will definitely call Paul, if and when I decide to purchase.
February 26th, 2008 at 5:55 am
February 26th, 2008 at 10:09 am
Up until 2005 house prices had only gone up in Miami, now they’re down 20%! In Vancouver a 20% drop on the average ’starter’ condo would mean a loss of around $60,000 which coincidentally is about what the average family in Vancouver earns in a year.
Or has business gotten slow because we’re running out of ‘greater fools’ and you’re just trolling for web traffic?