MyNewPlace Blog

Yesterday, we took a broad look at the real estate vertical by comparing for rent search terms with for sale search terms and found that the market share of for rent terms had overtaken that of for sale terms in 2009. Just to review, by market share for search terms, we mean the percentage of the 10 million U.S. internet users who searched with a given keyword (search term) and from that query clicked on a site that Hitwise categorizes as part of the Real Estate Industry (of which there are a few thousand).

So, today we wanted to get a little more granular to see what specific terms or perhaps keyword and its permutations had contributed to the new trend towards renting. Yesterday, we compared all terms that included the word rent versus all terms that included the word sale to draw our conclusions; today, we are going to look at one specific term to gauge the shift, ‘homes for rent' versus ‘homes for sale.'

We saw enormous gains from ‘homes for rent' in 2009. There are two charts below, the first, shows that both ‘homes for rent' and ‘homes for sale' gained market share in 2009. However, the market share for ‘homes for rent' skyrocketed nearly 150 percent from January 2009 to January 2010, although ‘homes for sale' retains a slight edge, gaining around 41 percent in the same time period.

The second chart just shows rank by market share, and it mirrors the above chart, ‘homes for rent' jumped from 20 to 9 and homes for sale moved up one spot to 8 in January 2010.

So a big part of the gain in market share was definitely an increase in the ‘homes for rent' search term; even last year, we saw an increase in searches for single family rental homes.

Also contributing to the rise in the market share of ‘rent' terms was the gains in the search term ‘apartments for rent,' which grew from .384 percent in January 2009 to .648 percent in January 2010.

The interesting part, however, is how the long tail seems not to apply to our results. Most vexing is the fact that although the number of search terms that include the word ‘apartments' decreased from 60 to 45,, the market share of the sum of those terms increased from 1.27 percent to 1.32 percent. This trend suggests that more volume is being funneled through ‘head terms.' Else, the long tail is so long, that the top 1000 terms is not a large enough sample to really draw conclusions. What do you think?

In the real estate space, rent search terms surpassed the market share than sale terms in 2009, according to Hitwise Real Estate Weekly Reports, a seeming online reflection of the housing crisis. Are there a few terms that are swinging the tally or is the long tail responsible? In either case, what does this mean for marketing your properties online?

Last week, we took a look at two Hitwise's Monthly Category Reports for the real estate industry, one from December 2009 and one from July 2008. In the interest of full disclosure, we were mostly interested in how MyNewPlace was ranking among the other real estate websites. MyNewPlace entered the top 20 in July 2008 at nineteen and by December 2009, we ranked number eleven.

Today, we wanted to take an in depth look at another section of the Hitwise report, the ‘Search Term' section. We wanted to see what had changed over the course of 2009, so we pulled weekly reports from January 2009, July 2009 and January 2010.

As prologue let's define an important term that we will use throughout this analysis, ‘market share'. By Market Share we mean the percentage of the 10 million internet users sampled by Hitwise whose search queries resulted in a click to one of the thousands of sites that Hitwise categorizes as in the Real Estate Category. We will also be looking at rank (of the top 1000 search terms) and number of terms that include a certain phrase (think broad match) as well as exact phrases. Here is what we found:

First, we wanted to get an overall feel for how real estate search terms are divided between internet users who are buying versus users looking to rent. We compared the market share of the sum of all terms that include 'sale' against the sum of the market share of search terms that include ‘rent'. We found that the sum of the market share of 'sale' terms declined slightly from 2.74 percent to 2.53 percent, while the sum of the market share of ‘for rent' terms increased 46 percent, from 1.96 percent to 2.86 percent.

Second, we wanted to see the number of terms that included 'sale' and ‘rent.' A few such terms were homes for sale, remax house for sale, for sale by owner, home for sale in Waterbury, furnished apartments for rent, rental home, Chicago apartments for rent, etc. As can be seen above, the number of 'sale' terms, which decreased by 12, is still higher than the number of ‘rent' terms, which increased by 16. (NOTE- out of top 1000 search terms)

This means that market share per search term for 'sale' terms was .02 percent throughout the time period while ‘rent' terms grew from .020 percent to .025 percent. So what the hell does this mean? Basically, that of the top 1000 search terms, ‘rent' terms have more weight or more search volume than do 'sale' terms. This indicates that the for sale online vertical has a longer tail than the rental vertical. We are going to need to get more granular and check out some more graphs.

We'll pick up the discussion tomorrow as we take a look at some head terms, specifically, homes for rent versus homes for sale. Also, we'll look at the prodigious growth of ‘apartments for rent' and take a look at permutations to see whether this report accounts for the long tail at all.

Each month, Hitwise, a competitive search intelligence company for online advertising, releases a Monthly Category Report for the real estate industry based on traffic to websites and search terms. They rank websites according to visits and search terms based on which keywords typed into search engines resulted in a visit for a ranked site. The information is derived from a sample of 10 million U.S. internet users with rankings done by market share.

*interesting side note – needed bing.com's search to find above image

For example, according to the December 2009 Hitwise Monthly Category Report – Real Estate, MyNewPlace was ranked 11th, with a market share of 1.28 percent. Therefore, of the 10 million internet users surfing the web, MyNewPlace received 1.28 percent of the visits to sites that Hitwise places in the real estate category.

This is a pretty big step for us, as it was about a year and a half ago when MyNewPlace first entered the top twenty, at number 19 with 1.04 percent market share. We look forward to breaking into the top ten very soon, perhaps even for January 2010!

Ranking in the top ten is significant because of the volume of visits those sites receive; of the 3,289 sites ranked, 30 percent of traffic went to the top ten sites. This consolidation for top sites is also up: back in July 2008, only 23 percent of traffic ended up at one of the top ten sites; this statistic is now up more than a quarter, indicating that top sites are doing an effective job capturing online audiences.

So what's driving an increasing number of internet users to those top sites? Have they done an effective job with online branding? Are they ranking well for all the valuable keywords? Are they able to rank well for all the permutations on core terms and reach the long tail?

Tomorrow we will attempt to answer those questions by examining Hitwise's Search Term information.

Vacancy Rates Up, Rents Down

Last week Reis, Inc. reported for Q4 2009 that vacancy rates were up to 8 percent and rents were down 3 percent nationwide, indicating that indeed we are in a renter's market. The vacancy rate has skyrocketed since the all time low of 5.5 percent in Q3 2006 and is up significantly from Q4 2008's 6.7 percent.

Reis economists attribute the rise in vacancies to the fact that many renters are moving in together to save money and thereby increasing to the glut of unoccupied units. Also noted was the fact that new units continue to come onto the market. Although occupancy actually increased over the same time period the number of available apartments increased even more. This of course has a direct effect on nationwide effective rents, which have fallen 3 percent since Q4 2008 and .7 percent since Q3 2009. [CNN.com]

Affordable Housing Lawsuit Ripples Through California

A lawsuit filed against the city of Los Angeles by a multifamily developer could have statewide consequences unless Sacramento lawmakers act soon. Palmer/ Sixth Street Properties challenged a Los Angeles city law that required developers to set aside a portion of new units for below-market rates; the plaintiff argued that state law declares that the landlord has the right to set initial rental rates and therefore the city is breaking state law by requiring certain rates on any units in new apartment buildings.

Other cities have been advised that new developers could cite the legal battle if they wish not to offer affordable units in newly constructed buildings. Many city supervisors are urging the State Legislature to revise the Costa-Hawkins law to preserve affordable apartments. [Tenants Together]

We are very excited to announce that MyNewPlace and Walk Score are working together to improve the online apartment marketplace for renters across the nation. MyNewPlace is now the first major apartment search website to feature Walk Score walkability ratings on every listing.

What is Walk Score? Using a proprietary algorithm, the folks at Walk Score analyze an address and determine what sort of amenities are within walking distance, and assign the address a score on a scale from 0 to 100. A perfect 100 means a property is a Walkers' Paradise: you can access everything you need for daily life within walking distance, from schools and grocery stores to coffee shops and restaurants.

Now, apartment hunters can search for apartments on MyNewPlace by their walkability, i.e. whether or they can walk to work or to public transportation, how far away schools are, if they can easily get to a grocery store and whatever other ‘neighborhood amenities' are important to them.

Why is walkability so important? For one, not using a car saves a ton of money and helps promote a more environmentally conscious lifestyle. Instead of searching and paying for parking, gas and insurance, many renters (including this one) have found that living in an area in which they can commute and recreate without the need of a car to be quite liberating. Additionally, Walk Score gives a great sense of the feel of a neighborhood—whether it's likely to be filled with bustling sidewalks filled with pedestrians, or whether it will feel like more of a bedroom community.

On MyNewPlace, renters can use Walk Score to help inform their renting decisions in a few ways:

1. When renters first search for rentals in a given city, they will be able to sort the apartments displayed by Walk Score. The filter option is located at the top of the page and that apartment's Walk Score rating is included in the listing's details:

   

   

2. If a renter is looking at a certain apartment or rental home, that page now includes a Walk Score for that property's address. A renter can get a better feel for what the neighborhood includes by clicking on the Walk Score link, which will show a Walkscore.com page with the address of the property as a reference point or by using MyNewPlace's Google Maps integration to search for specific points of interest.

   

So how does Walk Score determine how to rate neighborhoods? Their algorithm grabs information from a variety of different sources to see whether a person or family can reasonably live without using a car. They score a given neighborhood based on the following criteria:

• A center: Walkable neighborhoods have a discernable center, whether it's a shopping district, a main street, or a public space.
• Density: The neighborhood is compact enough for local businesses to flourish and for public transportation to run frequently.
• Mixed income, mixed use: Housing is provided for everyone who works in the neighborhood: young and old, singles and families, rich and poor. Businesses and residences are located near each other.
• Parks and public space: There are plenty of public places to gather and play.
• Pedestrian-centric design: Buildings are placed close to the street to cater to foot traffic, with parking lots relegated to the back.
• Nearby schools and workplaces: Schools and workplaces are close enough that most residents can walk from their homes.

We are also very happy to power apartment rental listings for Walk Score; on every Walkscore.com map page, Walk Score users will be able to search for apartments for rent on MyNewPlace based on the neighborhood that they are looking at on Walk Score. So, as renters do research on neighborhoods where they'd like to move, they'll easily be able to see what kinds of apartments are available. We're also powering an embeddable Walk Score Walkable Apartments widget that you can grab on our Free Tools page at http://www.mynewplace.com/freetools.

Working with a site like WalkScore is just one more way that MyNewPlace provides renters with the best way to find their new apartment.

On the front cover of last Friday's Wall Street Journal we saw a story about data from Reis, Inc. that shows commercial (office space) rents in Washington, D.C. should overtake New York City for the highest rent per square foot in the nation.

Commercial rents declined in almost all of the 79 American cities that were tracked, with an average drop of around 9 percent. Nationwide, commercial rents are about $22.44 per square foot.

While still the most expensive city for Q4 2009, rents in New York fell nearly 20 percent to $44.69 per square foot, putting it into a trajectory that should dip below effective commercial rents in Washington, D.C., which only fell 3 percent to $41.77 per square foot. Reis, Inc. predicts that rents in New York will slip to $41.07 by the end of the year, and D.C. will drop only slightly, to $41.27.

The explanation is quite simple: the financial services sector was hit disproportionally hard by the recession (huge investment banks and brokerages that are out of business don't need office space) and the government (which needs to hire more people to figure out ways to fix the mess) has been hiring. According to one tenant-brokerage firm, 10 of the 16 largest leasing transactions in Washington last year were for federal agencies. Additionally, the government's largest department, Homeland Security, will be leasing an estimated 1.1 million square feet of office space. For those without calculators handy, that's $45.9 million a month ($551 a year) for new office space.

We, of course wanted to see if there was a corresponding shift in rents for apartments in Washington, D.C. and New York. According to MyNewPlace rent data, kind of. We found that rents for studio apartments decreased in New York and increased in Washington over the last 3 months of 2009. As the chart above shows, rents for studio apartments in Washington, D.C. increased about $370 from January 2009 to December 2009. Rents for studio apartments in New York decreased just $1 from the beginning of the year, but the second half of the year shows a much steeper trend; rent for studio apartments in New York City fell 9 percent, or $243 from July to December 2009.

A recent U.S. District Court decided in favor of Post Properties, who had been sued by the Equal Rights Center (ERC) for violations of the Fair Housing and Americans with Disabilities Acts. The judge granted the defendant's Motion for Summary Judgment and ruled that the plaintiff did not have legal standing in a court of law.

In both cases, advocacy groups filed suit after visiting rental properties to determine whether they were up to code and were then dismissed. We'll start with the facts of each case and then move onto our opinion of the opinion.

Although neither the stories from the Atlantic Business Journal nor the NAA disclosed the specifics of the case, we believe that the case was very similar to a case we wrote about in 2008, Garcia v. Brockway. In that case, the same ‘failure to comply' allegations were brought against a developer whose apartment complex did not include federally mandated disability access features, such as curbside cut-outs.

The Garcia v. Brockway case was dismissed after the judge ruled that the plaintiff's interpretation of the statute of limitations, (that interpretation [that the statute of limitations for liability was 2 years from the date of the first occupant and not 2 years from the date of the discovery of the problem] extended liability to virtually all individuals and corporations involved in the construction and ownership of the building) was antithetical to the purpose of their lawsuit.

In the Equal Rights Center v. Post Properties case, the judge ruled that the ERC had no standing in court because the plaintiff's injury “occurred as a result of its decision to investigate Post [Properties]."

A Summary Judgment occurs when the judge, not the jury, makes a determination on either a specific point or the entire case. Basically, the (usually) defense is asking the judge to act as the entire jury because there is some kind of ‘point of procedure' that needs to be addressed. Juries are employed only to hear the facts of a case, not to address obscure points of law. In this case, the judge ruled on whether or not, according to the law, the plaintiff had legal standing.

Above we have two different court cases, both with the same allegations and both dismissed by a judge and never making it in front of the jury. Both judges essentially ruled that both plaintiff's were abusing the legal system.

In the first case, the plaintiff, the Disabled Rights Action Committee, by arguing that all individuals and entities involved with the construction where all liable for damages discovered within 2 years of the discovery, if upheld, would drastically increase the amount of people that advocacy groups could sue.

In the second case, the plaintiff, the Equal Rights Center, by arguing that they had sustained injury by taking it upon themselves to inspect buildings for compliance with the FHA, would incentivize those organizations to be like people who make a living by stepping in front of cars.

This is not to say that those advocacy groups do not serve well their members and causes, merely that those groups that use their resources in such a way are not legally appropriate.

This morning we noticed that according to Google Webmaster, the phrase “jersy shore" had made our top ten keyword list for the day. It took about 5 seconds on Google's search to determine that yet again, an MTV reality show is driving interest in rental properties based on the location of the stars of the show.

Dedicated readers may remember that last year, MTV's west coast version of Jersey Shore, a reality show called “The Hills", drove a large amount of traffic to our listing where the stars of that show resided. We were actually able to conduct some surprisingly in depth research on that keyword, our conclusions included the viewership of that show 1) watched television and surfed the internet simultaneously and 2) watched the season's premiere and finale live, but recorded the rest of the season's shows.

Also of note is that the keyword phrase “jersy shore," though misspelled, nevertheless drove an anomalously high amount of traffic. Now, one may proffer the believable hypothesis that a majority of the viewership never made the podium at the Spelling Bee, but generally misspellings on popular terms generate a lot of traffic regardless of the demographic. (Just try and bid on www.cnnn.com)

So how is this MyNewPlace page that is driving all the traffic? First, let's take a look at the off-site factors. First of all, overall searches for “jersey shore" and all related keywords skyrocketed when MTV's show became popular. Secondly, the search results page (SRP) for “jersy shore" is much less competitive than the SRP for “jersey shore."

The first 5 results on Google for the latter, correctly spelled term (jersey shore) are:

1. MTV.com's Series Landing Page
2. NyDailyNews' somewhat dated article on the upcoming show
3. ‘Jersey Shore' Wikipedia page
4. Google News results for Jersey Shore
5. Google Image Results for Jersey Shore

For the misspelling in question (jersy shore):

1. Same as above
2. AboutNewJersey.com Vacation Guide
3. Visitnjshore.com Vacation Guide
4. Video Results for Jersy Shore
5. Njshoreirishfestival.com Irish Festival Guide

From the misspelling SRP page, it seems that Google is less sure of exactly what the searcher is looking for displays more a wide and shallow, buffet style SRP, whereas the correct spelling elicits more of a “Google's feeling Lucky" SRP that shows a much more narrow and deeper top 5 results.

From here, we can turn to the page's on-site factors; the biggest was that the submitted property name was “Live Close to Jersy Shore Beaches," which placed the popular keyword phrase (jersy shore) in the page's URL, title tag, meta-description and H1 (largest headline on the page), thereby focusing the 4 most important SEO on-site factors right on the misspelling of the searched term.

So before the show became popular, although our Jersy Shore apartment page was probably ranking above the fold (top 5) in Google's “jersy shore" SRP, it wasn't until the term experienced an unrelated traffic increase due to popular culture that SEO traffic really increased, despite being bumped down in the rankings.

Thus, our advice to Property Managers: if your property is the Michael Jackson Apartment Complex, get a little SEO traffic by throwing in a misspelling into your online apartment listing.

All year long, I never get invited to any parties. Then, as soon as December hits, it seems like everyone wants to throw a big end of the year Holiday Party. In a 3 week span, there are so many party plans that hosts end up negotiating and competing to secure the nights that they think will bring in the most guests.

This year, that sweet spot was the second Saturday in December. The rules seem to go something like this: Fridays are not desirable, because after a long work week during the season of shorter days and longer nights, Fridays become more of a takeout and movie night rather than “carpe noctem" kind of night.

Furthermore, since there are only 3 viable weekends to choose from, conventional wisdom (based on the Goldilocks and the Three Bears Theory) holds that the first weekend is too close to Thanksgiving and has the least chance of snow, the 3rd weekend is too close to Christmas any may leave people snowed in, but the second weekend is just right because provides rare lull in the hectic end of year schedule and there just may be a light dusting of snow to get people in that festive holiday spirit.

Be advised, be very advised that securing this ideal day can backfire on you even when precautions are taken.

When throwing a holiday party in your apartment building, it is necessary to be aware of your surroundings. You have neighbors, you share walls, and no amount of holiday generosity or eggnog can change that fact. Consider this, as it is important to act in a neighborly fashion so that a night of revelry does not interrupt or distract your fellow tenant's lives.

In keeping with this belief, we did a few things to ensure our neighbors would maintain their Mr. Roger's-like opinion of us:

1. We alerted the landlord, telling her when the party was expected to start and end
2. We told her to call us if at anytime we were disrupting other tenants
3. Since our apartment building has an outer door (as most do) we stuck a big arrow sticker pointing to the correct buzzer so that neighbors wouldn't have their doorbells ringing all night.
4. To contain noise, we closed all windows that face the courtyard and placed the subwoofer on a surface what would absorb and redirect vibrations away from the floor

Despite our best efforts, this is the letter we received the following morning:

Hi Matt,

I told you if there's any aftermath I would let you know. And oh boy, was there. First of all, it was more people than expected and way too loud. Even with all the windows and doors closed, we could hear everyone shouting, singing, stomping, etc, in this building and next door.

You said I could call if it got too loud, and that you would have your phone on you all night. I didn't want to end the party, so I waited for everyone to leave. However, when it was 4 something and the music was still going, I had to call you to ask you to turn the music down. You did not pick up either time. The music did not stop till 6 am. That was when we finally got to go to sleep.

Some people had entered up the roof. You know that is strictly forbidden, as detailed in the lease. The neighbors will call police if they see anyone on the rooftops as since no one allows anyone of rooftops, it would only mean a burglar or homeless is up there. Anyone going up the rooftops compromises the safety of the waterproofing abilities and is therefore strictly prohibited, as outlined in the lease.

We had no problem with you guys leaving a doorstopper in the gate, but when your guests left, they were unaware of its presence and many tried to shut the gate hard. Some had repeatedly slammed the gate so hard we were afraid the gate would pop open again.

This was the loudest, longest, most vomit-filled party we had ever seen in our building.

J******

(photo courtesy of A Natural Sound)
It's the first of the month and it's time to pay rent. How do you do it? Do you pay rent with a credit card? Do you have to collect rent from your roommates, hope that their checks clear and then pay the total to the landlord in your own name?
If you are in charge of collecting the rent from roommates, the most common way to divide rent is based on the size of the room each resident. However, there are some other ways to quantify the value each resident brings to the house and apply that to the money owed each month.
See the below email correspondence for one apartment's solution to figuring out who owes how much for a given month:
Subject: jokes aren't cheap
From: M**
To: A****, D***, E***
can i have $418 at your earliest convenience please?
From: D***
To: M**
Holy crap it's december!
From: E***
To: M**
maybe we should base our rent off the number of jokes not told. i mean each of us probably averages 2.5 jokes per night, that's 10 total jokes per night.  on an average month, that's 300 jokes per month, or $1.39 per joke ($418 / 300 jokes).   so drew, who isn't that funny and doesn't have many good jokes, would owe slightly more than us for all of the missed joke opportunities.  you on the other hand, would not owe very much for rent, because you are not missing out on many joke opportunities, thus reducing the dollar per joke you would owe.