US Online Real Estate Market

US property portals operate in one of the most mature markets in the world, serving a population of 311 million with 216,250,000 unique visitors online according to comScore. There are currently four websites vying for market leadership, with a number of smaller players aiming for success in their particular niche.

Top websites

The most consistent measure of online success is the monthly Hitwise list of the top 20 websites in the real estate category, which outlines the market share of each website. In May 2011, the top 20 US real estate websites were as follows:

1. realestate.yahoo.com (April ranking: 2) – 6.51 percent market share
2. realtor.com (1) – 6.46 percent
3. zillow.com (3) – 5.69 percent
4. trulia.com (4) – 4.77 percent
5. realestate.msn.com (8) – 2.42 percent
6. frontdoor.com (10) – 2.38 percent
7. rent.com (6) – 2.35 percent
8. homes.com (7) – 2.20 percent
9. realestate.aol.com (5) – 2.13 percent
10. apartmentguide.com (11) – 1.61 percent
11. ziprealty.com (9) – 1.44 percent
12. apartments.com (16) – 1.16 percent
13. rentals.com (13) – 1.16 percent
14. remax.com (14) – 1.06 percent
15. weichert.com (15) – 1.06 percent
16. mynewplace.com (12) – 1.05 percent
17. forrent.com (17) – 0.96 percent
18. homeaway.com (20) – 0.93 percent
19. apartmentfinder.com (31) – 0.93 percent
20. loopnet.com (18) – 0.89 percent

Hitwise says 36.53 percent of all visits to the real estate category went to the top 10 websites in May 2011, while 47.18 percent went to the top 20 websites and 72.60 percent went to the top 100 websites.

Top four players

Comparing the market shares of the top 10 real estate websites, it’s clear that realestate.yahoo.com, realtor.com, zillow.com and trulia.com command the largest audiences.

realestate.yahoo.com is part of the Yahoo! network, while realtor.com is the the official website of the US National Association of Realtors (NAR). trulia.com is a private company that was founded in 2005, while zillow.com launched a year later and filed for an IPO in April 2011.

realtor.com had held the number one spot on the Hitwise list for three years, but was knocked out of first place by realestate.yahoo.com in August 2010. One month before this, realestate.yahoo.com struck a new advertising agreement with zillow.com to offer advertisers a single channel to advertise on both sites. Since then, realtor.com and realestate.yahoo.com have been switching between number one and number two on the Hitwise list in what industry commentator Brian Boero describes as a “two horse race.”

In February 2011 zillow.com began feeding its for sale listings to realestate.yahoo.com and selling ads for both real estate websites. zillow.com claimed this created “the largest real estate network on the web.” realestate.yahoo.com’s monthly unique visitor total at the time was 7.63 million according to comScore, while zillow.com’s was 7.66 million, making for a combined total of 14.4 million after accounting for visitors to both websites.

Meanwhile, in January 2011, realtor.com operator Move, Inc had announced its own advertising agreement to start powering realestate.aol.com’s homes for sale search from the second half of the year. realestate.aol.com claims to reach over 5 million unique visitors per month, while Move reports that realtor.com has over 7.7 million, which means an approximate total of 12.7 million unique visitors to the network – slightly behind zillow.com/realestate.yahoo.com’s total. Comparing the Hitwise market share of these two advertising networks, zillow.com/realestate.yahoo.com has 12.2 percent, compared to realtor.com/realestate.aol.com’s 8.59 percent.

trulia.com’s market share of 4.77 percent puts it clearly in fourth place, however the website has claimed to be ahead of zillow.com in terms of certain measures. In April 2011, trulia.com published figures showing that it had more page views and minutes per visitor than zillow.com, and more year-on-year growth for minutes, page views, unique visitors and visits. “trulia.com is now ahead of zillow.com in major scale and engagement numbers, and we are growing faster than zillow.com on all key audience metrics,” the website stated at the time.

Other players

There have been few new entrants to the Hitwise top 20 list list over the past 12 months, with the notable exception of frontdoor.com - the real estate website of cable network channel HGTV. In January 2011, this website jumped from 53rd to second place during HGTV’s “Dream Home” promotion. frontdoor.com dropped out of the top 20 in March, but made it back to number 10 in April and number six in May, with a market share of 2.38 percent.

Unique visitor comparisons are the most widely-accepted measure of success in the US online real estate market, but not all websites are convinced of their importance. In April 2011, homes.com released its own set of Hitwise figures showing it was one of the top sources of traffic to a number of brokerage websites, and argued that page views per visitor is “a more valuable indicator of user engagement and audience quality than unique visitors, which can be driven up by unengaged, indirect traffic.”

Business models

The two most common business models for US property portals are the subscription model, which charges agents and brokerages on a per-listing or per-listing feed basis, and the free-to-list, pay-to-upgrade model.

realtor.com lists all NAR members’ properties at no charge, but sells a number of premium advertising options to agents who want more prominence for their listings. Parent company Move, Inc says 42 percent of its overall 2010 revenue – $197.5 million – came from the sale of its “showcase” listing enhancement products for realtor.com, while nine percent came from featured homes.

zillow.com’s suite of advertising products contributed to revenues of US$30.5 million in 2010, however the company still made a net loss of $6.7 million. From February 2011, zillow.com began selling ads for realestate.yahoo.com as well as its own website.

trulia.com allows agents to submit their listings for free, but sells a number of paid products such as Local Ads and Trulia Pro. trulia.com has not yet made its financial information public, but the company announced profitability in October 2010.

One notable aspect of the way US property portals receive their listings is the existence of Multiple Listing Services (MLSs), which operate as listing databases for regional Realtor associations and operate their own websites (see, for example, the California Association of Realtors). realtor.com says it receives listings from approximately 900 MLSs across the United States, resulting in a searchable database of approximately 1 million properties for sale. zillow.com receives listings from 358 MLSs through an agreement with Move, Inc’s ListHub publishing network, and trulia.com has its own MLS partnerships, including one with the Houston Association of Realtors.

Alongside these business models, there are also free-to-list real estate websites that generate revenue by selling products such as on-site advertising. One example is hotpads.com, which is a real estate search engine that sells banner advertising, links and logos spots within its map-based search.

Further information

For the latest news on issues affecting real estate agents in the US, visit inman.com.

For news related to the US National Association of Realtors, visit the NAR news room.

For commentary on technology trends in the US online real estate space, visit 1000Watt Blog.

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