Redfin Case Study Shows that Web Traffic does Not Drive Sales

by Victor Lund on August 8, 2017

Web analyticsIf you ask any REALTOR® about the relationship between online website traffic and sales volume, they will tell you that there is a direct relationship. The conviction among Realtors® is that companies that have the most amount of consumer website traffic sell the most amount of homes. This belief has stirred the root of Realtor® emotions, causing them to vilify the Zillow Group. A new entry of concern is Redfin®, a company that has long battled with Zip Realty® for online website domination. Redfin’s IPO has been a great success that is causing competing brokers to contemplate their future in this online real estate landscape.

WAV Group just completed a case study to explore the correlation between online success of a brokerage and transaction volume. The results of our survey indicate that winning online does not correlate to transaction success. The methodology for our research used the Seattle marketplace. This is Redfin’s top marketplace of any city in America.

The top 10 broker websites for Seattle were culled though research using comScore and Hitwise. These services combine a number of methodologies for estimating web traffic to broker sites. They are not exact, like Google Analytics – but they do accurately estimate the share of consumer voice. As a percentage of overall traffic, they are very accurate.

Seattle Share of Voice

The total share of voice for all sites becomes negligible when you get down below ½ of a percentile. The top 10 consumer sites in the Seattle area contribute 65% of all consumer traffic. Below the top 10 are thousands of agent and broker websites that combine to deliver the other 35% of consumer traffic. Zillow’s estimate traffic is about 850,000 users per month in Seattle. They have about 1/3 of all traffic, so the total consumer audience is about 2.5 million consumers a month.

Zillow – 31.0%

Redfin – 15.2%

Trulia – 7.4%

Realtor.com – 7.1%

Windermere – 1.3%

Homes – 1.3%

John L. Scott 1.0%

Movoto – .7%

Estately .7%

*Coldwell Banker would be in the same ballpark at Windermere and John L Scott if you combine the traffic from the multiple Coldwell Banker sites.

Seattle Share of Market

There are a number of ways that you can measure market share by real estate brokers. Some look at units, others look at volume. For the purposes of this evaluation, we have chosen to look at units in 2016.

Windermere – 20.9%

John L. Scott – 11.7%

Keller Williams – 11.0%

RE/MAX – 7.1%

Coldwell Banker – 6.5%

Redfin – 2.5%

Better Properties – 2.4%

Skyline – 2.4%

Berkshire Hathaway – 2.1%

Century 21 – 1.2%

Sothebys – 1.1%

Agency One 1.1%

Realty One Group – 1.0%

Observations

WAV Group studies online performance for many of the largest brokerages and websites in America. What we commonly see is that the brokers leading in transaction volume will typically lead in consumer online traffic to their websites. When we look at sources of web traffic, we find that over half of the consumers either type in the domain name of the brokerage (Redfin.com) or they search for the brand (Windermere). Brands in the marketplace do an outstanding job of driving consumer traffic though word of mouth, yard signs, local marketing, etc.

Across America, Redfin is the #1 broker website ranking 4th in the nation behind Zillow, Realtor.com, and Trulia (pre IPO).  RE/MAX is the top franchise website, a result of a long term dedication to online success (ranking 6th). Zip Realty has fallen a bit since their transition to Realogy and their pivot to being a leader in delivering agent and broker websites and CRM. They still perform well, but not as well as they did before the acquisition. Zip Realty ranks at 37th in the nation. (Redfin reported a loss of over $20 Million in pre-ipo reporting.)

If web traffic correlated to sales in Real Estate, Redfin would be the #1 real estate brokerage in Seattle and the 4th in the nation. Instead, Redfin is 5th in Seattle with 2.5% of sales volume. Redfin does not participate in the RealTrends top 500, but their reported 35,350 transaction sides in 2016 would rank them 6th.

NRT – 337,000 sides

Home Services 245,154

Howard Hanna Holdings 90,016

Long and Foster 81,032

Then a big drop

RealtyOne Group 44,182

Redfin 35,350

Keller Williams Arlington 33,769

Crye-Leike 29,314

MLS consumer facing websites continue to dominate in the rankings too. The upstart broker portal consumer facing website, Homesnap ranks 13th in the nation and is rapidly climbing the ranks. The initiative was instigated in January of 2017 and has climbed sharply of obscurity to relevance as a result of rolling out the platform to over 550,000 agents and their clients. HAR.com remains the leader in independent MLS consumer facing sites and is the only one in the top 10.

The Seattle MLS, Northwest MLS is not currently operating a consumer site that appears in the ranking and they have not opted to join into the Broker Public Portal at this time.

In summary, websites do not sell real estate. Moreover, their preferences for online search do not predicate their selection of an agent or broker to represent them in a transaction that correlates with their online traffic.

{ 1 comment… read it below or add one }

Patrick Shea August 10, 2017 at 8:32 am

Very interesting study and useful interpretation of the results. Thank you Victor!

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