Posted June 11, 2008 2:01 pm by with 12 comments

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Just what we want to hear – bad news about the housing market, but this time online. Turns out online searches didn’t have as significant impact on homebuying or renting decisions as we may have hoped. That doesn’t necessarily mean real estate sites should pull back their budgets though.

The Pew Internet & American Life Project Survey, September 2007 found that buyers even more than renters used the Internet most to search for real estate (links to a PDF summary of the study). They surveyed 2,400 adults about how they use the internet to research homes or apartments.

When taken as a whole, just 11% said information they found online had a major impact on their buying decision. This caused a bit of an outcry in the industry. Of the people who did research their purchase online, 23% said what they found had a major impact on their purchasing decision. Most agreed that their online research also saved them money and time.

I don’t take this to be all bad news. The study doesn’t address the buying decisions of this group, but in general people who go online have higher incomes than average. Also people are more likely to use the Internet to narrow their search. Then they take the search offline and actually view the homes or apartments to make the final decision. In other words, the Internet is more a lead generation tool than a buying tool.

According to the survey, of those who used the Internet in their housing search:

  • 57 percent said the online info reduced the number of places they looked at
  • 29 percent said such info helped them save money on their house or apartment
  • 23 percent said the Internet had a major impact on their housing decision
  • 42 percent said it had no impact at all

Here’s the information people most use online. Half or more used virtual tours, researched communities, or visited real estate sites:

I’ve been following the real estate industry in both my job and in regular life. During the day I work with clients, including real estate pros, on their search engine optimization. I follow mostly sour news about the housing market. And I recently hired a Realtor to help me sell my condo.

The good news is my condo is under contract in less than two weeks (so I’m feeling particularly optimistic after dreading a possible 6-9 month wait). And a guest post on Marketing Pilgrim gave me some new ideas for my clients – including introducing me to a social network for real estate. Thank you Joe Hall.

Next up, Hitwise data on specific real estate sites and brands people are visiting online.

  • Janet – you’re right. This isn’t bad news at all for the RE industry. Of course the Internet doesn’t *influence* a home purchase — it’s not like ordering a book or CD. It’s the biggest purchase most people will ever make, and the biggest influence will always be walking into the house, driving around the neighborhood, the local school system, and offline factors.

    But the Internet is a big factor in the early stages of either researching a neighborhood and/or home to buy, or researching an agent to use (for people selling their home).

    Matt McGee’s last blog post..Links for 2008-06-10 []

  • Max

    Great post Janet, thanks for the stats.
    Working in real estate industry (marketing) for over 6 years, I never expected internet to influence a purchase of a property. At least not for an average Joe. Internet is a great informational source for potential home buyers and sellers. It helps to gather information and make and a decision to start the process of buying/selling a property. Real estate agents have an opportunity to show their knowledge and expertise via online medium. If correctly planned and implemented – Internet can be the least expensive and the best long term investment ever for generating prospective clients and looks like the numbers in your stats confirm that.

    Max’s last blog post..West Valley Market Report – May 2008

  • Thanks for the great info! I have a few clients that haven’t gotten up to date with their websites, seeing that VT number should help sway them.

    Zak Nicola’s last blog post..Google AdBloopers

  • Jordan McCollum

    I think Pew’s headline was basically just to get attention. They saw that few people used the Internet and concluded that it’s not influential, while all of their stats basically said otherwise.

    I took a look at the other industries included in the report last month.

  • No problem Janet! About the Pew study: I tend to put less weight in a study that runs contrary to most of the other industry data that we have seen coming out since the bubbles started to pop. I work for a local franchise that is constantly barraged by our corporate office on new ways to use the internet. We constantly here people at conferences and trade shows talking about maximizing the internet. And, on a personal note, our company has increased sales leads despite the housing slump. And, all most all of the new leads are web generated. So, if people are using the internet less to find a home then its not enough to really worry about or notice!

    Joe Hall’s last blog post..RE/MAX is the most searched for Real Estate company on the internet.

  • Only 42 percent said it had no impact at all, that leaves the 58 percent who used it. Thats enough of a percent for there to be value. Its dependent on many factors, I have clients that get majority of their business from the web, they get the lead, but the personal interaction of the agents sell the properties.

  • Internet is very useful tool to do early survey to find place for home living. But, for me visiting the place myself before made last buying decision is a must.

  • Nowadays everything is selling online, online real estate sales just a part of this growing process.

  • Tiffany, you are again right. Interenet is the very tool with the help of which one can feature out the living place. But it is extremely important for me to see my purchase prior buying it.

  • It seems like a useful adjunct to more traditional things. I would imagine that if the numbers were crunched more, those people who were moving further tended to use the internet more. There seems less benefit to using the internet when moving across town.

    Peter Monroe’s last blog post..Peter Monroe

  • The Internet is great for researching any topic. I t doesn’t surprise me at all that people are searching for housing online, but I thought it have more influence than suggested.

    I’m using the Internet now to find rentals here in Hawaii and have used it extensively before in other places I’ve lived.

  • The number of people that use the internet is going to keep growing. Not surprised that renters use it more, I’ve seen the evidence of it on our own site.

    Charles’s last blog post..Monterey Auction