Focus Discussion of the Week:
On this episode of Building Perspective, Jake Scherrer from Zillow returns to the show to catch up with Matt and Mollie and discuss the latest in virtual home tours, the challenges and benefits of working from home, and how the industry can learn from today’s external shifts.
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Two thought leaders come together to explore all things sales and marketing from their unique perspectives. Each week, Mollie Elkman, Matt Riley, and others from Group Two dive into a focus discussion to talk about the latest trends, changes, and best practices.
[00:00:00] Jake: You know how people define their home is probably changing, right? As well. So you have, you know, I know for ours, because we’re not going on vacation this year, like there’s really no way I can think that we would be in my, my kids are asking, well dad, what are we going to go next year? And I’m like, I don’t know.
So we’re spending more quality time in our home. and so the home definition to us is, is changing.
Matt: Hi and welcome to building perspective with Matt Riley and Mollie Elkman. We’re here to
Mollie: bring value to you and your team by exploring all things sales and marketing related,
Matt: all from different perspectives. All right. And today, our focused discussion of the week. [00:01:00] Is magic with the push of a button with Jake Scherer of Zillow and I, this is probably in my opinion, the best title of an episode we’ve ever had.
What do you think, Mollie?
Mollie: And we’re so happy to have Jake here.
Jake: Yeah. Thank you for having me back.
Matt: Absolutely. I think you might be the first, second appearance guests, like the first person that’s come back for a second time.
Jake: I can’t be
Matt: has to. I think you’re the first, even if you’re not, we’re going to go with you’re the first because it just sounds, it just sounds better.
Well, anyway, thanks for jumping on Jake. And you know. I thought we, you know, you and I were chatting. I thought, you know what? There’s a lot going on. And, you know, all over the country and, and just who better to chat with than, than you, your team, what you guys are able to be able to see, at a national level.
And, and just also, just on a personal level. So, you guys are up there in the Seattle market, so. [00:02:00] How, how are things going? Like, what’s what’s happening in Seattle?
Jake: so Seattle, once again, so we, we get these updates usually monthly from our governor, and we had a recent one that was like, we were basically staying in place for another month, all of may, you know, and then like the rest of the country, I think you had mentioned to me there’s going to be phases at which, you know, they allow more and more gatherings or more and more people within a gathering.
And we hope that it starts in June. I actually. I think I’m going on like six, seven, maybe eight weeks without a haircut. And the place that I go just sent me an email yesterday and said, we plan to open up in June, so start booking your appointments. I waited like two hours to do that and like everything was full, like right off the
Mollie: back of your own hair.
Matt: I cut mine
Jake: Clippers. You can’t find them anywhere.
Matt: Oh, you’re right. I had to find like as soon as we went on lockdown here, I was like, I knew I needed a haircut and I’m like, I’m [00:03:00] fine. I went and found some, some Clippers for like 50 bucks on Amazon. It took two weeks to show up, but they finally did in my life.
My wife cut my hair and then she cut. My, my boy’s hair and she, I told her I was teasing her because, she cut my hair first and did fine. Like mine’s really easy. It’s just short. but my, my 13 year old son, you know, he’s got some of the style going on and so she was like doing her thing. It’s like, it looks good.
And he asked her to like. Oh, can you get this little section over here a little bit more? And then she started and then a little more, and then next thing you know, like it was bad. He had like, well, when like locked himself in his room, like, I’m sorry, I’m laughing.
Jake: that that happened to my father-in-law.
Mean he was, yeah. It was on the back of his head. So she’s like, it’s fine. It’s fine. He’s like, can I get your guys’ opinion? We’re like, yeah, no, we can see it.
Matt: Hackers, we called my hair cut. It’ll do cut cause it’s fun, right? Like it’s [00:04:00] webinar or camera ready. you know, but it’s not as good as the, obviously the barber.
Jake: The trick for me though was as I got my last haircut on the. Day that everything was shutting down or they’re shutting down the next day. So it was the last day that anyone in our state could have got a haircut. I got one. So at least I’m, I’m, I’m probably like the shortest amount of time until the next one, so I’m, I’m good.
Mollie: I actually did the same thing the day before I went and I got my hair done and my nails done. And, but for a female, it’s a little different. My hair, all the whites are showing now. I mean, I had to dye my hair myself, so it’s been, it’s been funny. But, when you guys started working from home, we actually followed Zillow because you guys were the first in housing to really say everyone’s working from home.
And what we did, cause we’re across the country is as soon as you guys did that, we did it as well. And we actually, were working from home before our state declared everyone should work from home. And [00:05:00] that helped us because it gave us like an extra week and a half to kind of get everything set up.
Jake: Yeah, it’s pretty, it’s actually really, it’s really refreshing. a manager of mine, Brett Brett steel, I’ll give him credit for this. He, I love speaking in analogies and he came to the table with an analogy that I just keep stealing. and he basically said what Zillow was able to do by communicating upfront.
Right. And for long periods of time, not saying we’re just going to do this for 15 days and then look at it 15 days and let’s reevaluate. They said, we’re working from home until the end of the year. Which gave everyone certainty, and then it allows all the other groups to start planning for that. But it’s like an airline pilot, right?
That comes on and you’re sitting on the tarmac and you’re not moving, and. They’re like, we have mechanical issues. It’s going to be 15 minutes. And then he comes back on and he’s like, it’s going to be another 15. And all you want them to hear is to say, you know what? It’s, it’s, it’s going to be two and a half hours.
just so you can plan for that two and half hours knowing that you’re going to get off the ground, then that’s, that’s, that’s really what it felt like to us. So we’re, we’re thankful.
Mollie: Totally agree. You’d rather know [00:06:00] than not know.
Jake: Yeah. but it was, it was a good call. And, you know, I think, I think the thing that worried us or worries me at least, you know, leadership the most is, you know, Oh my gosh, what’s this gonna do to our culture?
But I think what we, we got hung up on, or maybe we were thinking about, is, I think we attached our culture largely to our office space. You know, it’s a cool office space downtown. Latest, greatest technology, you know, overlooking, overlooking Puget sound. And, you know, we win awards for best places to work, but it’s not our office, it’s the people, right?
It’s the culture we’ve created and it’s putting our people first that. That I think creates that culture. So we’re, we’re, we’re realizing that. And, I think everyone’s really appreciative.
Mollie: What are some of the things you guys have done to stay connected while you are working from home? Because we have the same thing.
I’m at group two. I mean, making sure people stay connected has been very important to us. So have you guys done anything fun to, to keep in touch with each other?
Jake: Yeah, I mean, and it’s, it’s a, it’s kinda [00:07:00] different stages, but, you know, somebody asked me the other day, what’s the most challenging part about managing, you know, from work, from home?
And I said, right off the bat, it’s communication. You know, it’s, it’s, I could get up and walk, you know, 15 feet and just say hi to someone or catch up on what it is they’re working on. And now, now it’s a, like it takes effort. I have to schedule a meeting, you know, we have to agree upon a date or times they’re free, and then we have to talk during the set time.
So kind of the spontaneity of, of, of it, kind of, you know, being able to pop on over, that’s gone. But. Yeah, everyone does. all of our team leads are our managers. They do daily check-ins with their teams. Just kind of do a refresh in the morning, talk about what they did the previous day, what they’re doing the current day, and, you know, that that was to help form a habit pretty much.
And now everyone’s getting in the groove and we’ve been doing this for, you know, eight or nine weeks now. And so, yeah, everyone, everyone’s just kind of evolving to where this is the new norm. And, and, Yeah. But, you know, happy hours, trivia nights, [00:08:00] you know, show and tells and meetings. I often ask people what their last five Amazon purchases were, in any random time just to see what they are and, know we try to keep it light.
Yeah. It’s pretty horrific. whatsoever. Mark, it’s funny.
Matt: Well, you tell us what yours are.
Jake: yeah. So. No. so Angela at, at lasso will appreciate this. So, she was gracious enough, gracious enough to bring me some candy bars from Canada. I’m not going to go over the whole story, but there’s a very specific candy bar that I grew up on that I have this affinity for.
And she brought some down to IVs this last year from, from Vancouver, and I ran out. So I ordered some of those, off Amazon. and then I bought a telescope. Really, really random, a telescope. there’s no reason why we would want one. I just saw it on there and did a bunch of research and was like, yeah, it’s like a hundred bucks.
It was a pretty good beginner one. And, and last night, I think it’s like a yellow moon or something. We were using it and it was pretty cool. but it’s just one of those things that you would never [00:09:00] think of, but I think I’ve seen the entire internet now. and at some point, a telescope crossed my mind and maybe even popped up in a, in a, in a feed or something.
And I was like, Oh, yeah, you know. Thought those things were like a thousand dollars but know that they’re, they’re not.
Mollie: I love that. I have to share cause I’ve had some really good Amazon purchases.
Mollie: I got a bounce house for my kids, which has been the best thing ever. And it was surprisingly not that expensive.
And it’s awesome. I’ll put a picture. and the Facebook page, so you guys can see. It’s amazing. And then I also got an error pop popcorn machine, because I love popcorn, but I don’t like all the salt and butter that comes on the pre downed ones. So this is just air pop popcorn, and paint by numbers.
That’s like becoming a trend for like, stuff to do at home. So paint by numbers. Those are my three weird things.
Matt: Alright. I’ve got my on my Amazon app up here, so apparently my kids got in. So [00:10:00] there’s a $10 PlayStation gift card purchase. Then there’s some like a, not even an energy, like a Powerade type.
Powder mix for like mixing it with water. There’s a bag of charcoal, for the grill. There is a critter bedding. So my youngest son has a hamster in his room, so it’s, it’s bedding for his cage and then a bag of ginger slices. Is that not the most random stuff?
There is no category like there’s no overarching. Those are all different things.
Mollie: Mine sounds like a five year old birthday party and yours sounds like the most eclectic.
Matt: I don’t even know what it sounds like. Oh, that’s great. Alright, so you guys obviously Jaker. You know, like you’re talking about, you guys got home working from home early.
You know, the leadership team said, we’re going to be, we’re going to be working from home for [00:11:00] the remainder of the year. You guys have, you know, started adjusted, right? Everybody’s doing, doing their thing, staying connected. you know, and so it’s interesting as we all go through this, and I think what, what’s interesting about this as.
Normally we don’t have the same, we’re not always looking at the same, through the same lens that our customers are. So the, in our, in this scenario, home buyers, potential home buyers, but we were all, we all started going through this at the same time. So we’re, you know, the old cliche, you know, we’re in this together.
We are all literally in it together, kind of going through and experiencing the same things. and it was, and you guys had really good timing, obviously, because. You know, you change things up on the Zillow platform, making sure, you know, from a private tour, examples and things like that. You’ve got some numbers where you got started off on how successful that was, and then you ended up switching gears.
Obviously with. With coven going [00:12:00] into offering the virtual tours. And I know you don’t have any of the virtual tour info yet. we do. So it’ll be interesting to share, you know, to kind of share that. What do you, what did you guys see when switching some simple verbiage on your, on the product pages into.
Based on the data that you had, I should preference that based on some of the, the, new construction survey where people really wanted to see that private tour part of it. And we can kind of transition into what group two is seen from a virtual perspective.
Jake: Yeah. So just, I’ll preface it with, you know, we’re the consumers, right?
The home buyers, you know, there, there are no, our, our North star, we’re always trying to figure out how to make this the best possible experience home buy, right. That it can possibly be. So, you know, we started with tour booking. maybe that was a little bit ahead of its time, but. You know, going back to the housing trends report that we have, you know, 77% of new home buyers that a private tour is very, or extremely important in their decision to purchase new construction.
So this is a very, you know, millennial thing. and it probably [00:13:00] goes without saying, but you know, that number should probably be higher. so we, we moved to tour booking as a form of a lead, right? Or form of a contact. And you know, this is a, you know. This is a better connection. It’s higher intent. So we, we’d been doing this for a while, we launched this late Q4 and then we roll out, you know, or then covert hits right in the pandemic, hits everyone.
And we knew that, you know, a private tour, when many States are saying you can’t meet one-on-one, this is a problem. So we launched quickly launch within just a matter of weeks, virtual tour requests. So, you know, if you look at Zillow listing, we call that the home details page. And on there you can request a tour.
But when you click on that. It’s going to let you choose, you know, date and time and all that. But within there, there’s a button that says, you know, I would actually like a virtual tour instead. And this was just meeting the need of our consumers. and solving a problem that a lot of consumers and builders were having.
So, you know, I don’t know to the extent that this is going to stick around forever, right? Cause I know builders, [00:14:00] they crave that human interaction, that human touch. They want to showcase their product and dive into the details. And you know, there are limitations with, with the virtual tour, but. you know, I’m proud of Zillow for moving quickly and being able to adapt and change something or alter something that had been working really well to meeting the need of consumers during this pandemic that’s working exceptionally well.
And well, I don’t have exact numbers and you’re going to share some, the, the, the tour requests, the virtual tour requests, you know, has met and exceeded, I would say all of our expectations.
Matt: Well, that’s great. And it doesn’t surprise me at all because what you did was a shift in what the consumer was asking for.
Right. And so it’s interesting. So, Mollie and I were talking to, you know, group two’s perspective, you know, our, our. I guess statement, thesis, theory, whatever you want to call it, is when it comes to the virtual tour stuff. I think the toothpaste is out of the tube. Like we’re not, Mollie jumped in. I don’t think we’re going back.
Mollie: Well, even though, you know, you mentioned home builders [00:15:00] love that face to face interaction, but it’s really home buyers and home buyers love. Flexibility control. They love to do it on their terms. So I think builders are going to be shifting to having a lot of different ways for buyers to work with them and really adapting even more to the buyer, because we always talk about the buyer experience, but you’re right, builders haven’t always fully adapted to the way that’s best for them.
They have pushed to get them on site. And I think we’re gonna really see a shift there.
Jake: Yeah, and we’ve talked about this, but. You know, obviously it could be regional. different regions are kind of in different phases or stages of, of this pandemic, but you know, the scarring from this is going to be real.
I don’t think you talked to anyone that thinks that you’re going to go to a grocery store, you know, in two months or maybe even a year from now, and not still have to be six feet apart, or, you know, where they won’t still have those barriers up of flexi glass, you know, between the, the, the [00:16:00] checkout person and, you know, the consumer.
and I’m curious to see how much of this is going to stick around or carry. Into the consumer and builder interaction. so yeah, our virtual tour is going to stick around. Are they going to be a thing, you know, virtual, I mean there’s a lot of builders that are testing, virtual open houses and, you know, I’m really, yeah, I’m, I’m curious to see, you know, what the response will be.
Cause there is a, you know, there is a group, right? I’d say millennials. mainly. That walk this, that crave this, that, you know, want to do a bunch of research on their own and then reach out as the consumer housing trends report suggests. So, you know, it’s the willingness for the builders to accept that this is the new way of communication versus there want to preserve, right.
A lot of what it used to be that they know that that still works too. it’s just, can they do it or not?
Mollie: Yeah. You know, that’s an interesting perspective just because when I, I think. [00:17:00] I think it’s actually not going to be the millennials who push for this. I feel like it’s going to be the are older buyers because there is that level of fear.
So they would rather be comfortable and not necessarily come out and continue to have virtual tours or at least have the option of it. So it’s going to be interesting. I agree though. It’s going to depend on the region and of course always humans are all different, so just different buyer preferences.
Matt: Yeah. Yeah. I mean, I think Jake, you said there’s, there’s definitely going to be some, some scarring, some mental scarring of how we feel about interacting with people face to face, close encounters, like especially groups of people. You know, my wife, just, my wife Amy just went to Costco this morning. And, I, I saw her downstairs as right for, I was running back upstairs to jump on here and do this recording.
And, she was just telling me, she’s like, man, Costco was a little more crowded than I anticipated, you know, she said, honestly, I felt I had a little [00:18:00] anxiety in there and you know, she was wearing a mask and she’s super, super. Cautious and careful. and, but she’s like, I was trying to get, get into the refrigerated dairy section and people kept coming in and out, and I was trying to let the, the area, like people like thin out.
So I didn’t go in there, but she was like, honestly, I was a little anxious about what was going on. And we’re not like. Overly freaked out. Like we, you know, we’re very much on the, on the thing of, okay, let’s be careful. Let’s wash your hands. If we need to wear a mask, that’s great, but you know, we’re not like hole up in our house.
We were for a little while, but now we’ve come to the realization of like, we’re not going to be holed up in our house forever. Like we got to get back out there, but still that, that mental, that mental scarring of that. And the reason I say that is because, you know, I was just having a conversation with the builder.
No, no, no. Two weeks ago. And they were planning on doing a, a, a, a, a grand opening and a community in June. And so all the state home orders and stuff are supposed to be, over in June in that area by then. And [00:19:00] you know, like, Oh, we’re going to just do this, we’re going to do this normal grand opening event.
And off we go. And I’ve really had to have the conversation of like. I don’t know that you’re gonna write like you can have an official grand opening event, but I don’t know that you’re going to get that people are just going to come rushing out there in person for your event. And I think you’ve got to look at how you’re structuring this and much more of a, it’s an event, but it’s a private tour based events or a virtual tour based event.
Like a lot of people are now starting to get into, but that’s, scarring is real. And I think that’s why. These, this virtual, the virtual tours, the Skype tours, the FaceTime tours, whatever, whatever they are, are going to stick around for a long time because we’ve been dropped, kicked as an industry into the new world of where buyers actually operate on a day to day basis.
And I think at some level, I don’t think we’re going back
Mollie: even just the option of it. Like even if you have a grand opening and you do [00:20:00] invite people to come out in person. Also having the option for people to join virtually. I think it’s more. You know, how many different ways can you make it as easy as possible for someone to participate in the way that they are most comfortable?
Jake: I think that’s it. I mean, that, that is truly, it is, it’s kind of, it’s doing everything. I mean, every option out there for somebody to be able to connect with you in the way that they prefer. And
Mollie: speaking of comfort, have you. Do you guys feel like you can’t breathe when you have a mask on? Because when I put one on, I like start to have like a panic attack
Jake: or do you ever hold your breath when you walk by someone?
Mollie: I straight up cross the street. I mean, it’s like you look at people like you can’t
Jake: breath will have nothing to do. Okay. But I’m still like, yeah, it’s a, everyone has weird little things. I’m sure. Yeah,
Matt: yeah, that’s right. No, I definitely, I’m like Amy and I went to home Depot last night to grab a few things and we had masks on and I was like, I can feel like the heat of my breath coming back into my face.
I don’t love [00:21:00] that feeling.
Mollie: Try it wearing glasses. Oh my gosh.
Jake: The thing is is like I’ll be in line in the morning a mask and someone will say something funny. But you can’t smile or they can’t see the facial expression cause all you can see is your eyes. So I want to like pull it down and smile and be like, no, that was funny.
but I can’t see, you have to leave the mask on so people just think you’re rude.
Matt: I know, I know. Yeah, well, Oh, so that was a total like rabbit hole there. But we were talking about, you’re talking about private tours and that how that really responded well, with the consumer now it’s interesting. So when we started recommending with our builders to make the switch instantaneously to virtual appointments, virtual tours, all that kind of stuff.
Even when we were, when even when the, just the marketing messaging was updated, we saw a massive increase in click through rates, even on ads driving traffic to the builder website as well as the traditional like call to action stuff. I mean, honestly, [00:22:00] massive. I’m talking 200, 250% increases. Yeah. From the get go and it’s just, that’s how imperative it it was and I think is going to continue to be, is the virtual tour side of things and which really kind of bridges into something that we’re all.
Near and dear to all of our hearts that I think is now front and center to almost everybody, which comes around to like content, right? So like, we can’t have virtual tours, meaning two versions of virtual tours. One, an actual like FaceTime tour, another meaning three D type tours, whether it be. 3d home tourism, Zillow, or Matterport or whatever, you know, whatever software you’re using, like that is a massive part of what the strategy is now.
And I know you guys have been doing, and. I sh I say, I know, but I don’t know that a lot of builders know this, so I’m going to spend some time talking about it. But like, [00:23:00] you guys have an option for 3d home tours directly loading into your, the Zillow platform, right?
Jake: Yeah, we do. And it’s, it’s been around for awhile and, and you know, it’s only available for, you know, iOS devices right now.
So your iPhone or your iPad. But yeah, I mean a consumer or you know, a builder or an agent, you know, can go on and they can upload a 3d home tour just using their phone. And it’s, it’s pretty simple and it’s really good quality. you can only do it on specs right now for builders, right? Cause they need to be homes that are built.
They need to actually have, you know, like physical, there needs to be substance, right? There needs to be. Oh, let’s build it obviously. But we are developing, and I can’t say we are developing, there’s no timeline on it. I can’t give that out right now, but we are developing a way that you can do it on plans or, or you know, homes that to be built.
which will be hopefully the next kind of evolution of this. But yeah, it’s, it’s not tough to do. And you can share them directly with Zillow and it’ll show up on Trulia. you know, if you have a fancy camera, [00:24:00] like a, you know, a Rico feta, you know, you can create high quality ones and you can still upload them using that.
But if you don’t, you just gotta use your iPhone. And it’s been around for awhile. And, you know, since, you know, basically since COBIT hit, so in April, we announced, you know, increase of 175% of moving ready homes from February of people uploading 3d home tours. So. you know, before I kind of get off my high horse here real quick, it’s, it’s, it’s hard to, and maybe you guys catch yourself too, but, you know, obviously coven, it’s horrible, right?
It’s this pandemic that’s affecting everyone, but at the same time, you kind of get a little excited. and I don’t mean it in a bad way, but you get excited because there’s all this amazing technology out there that so many of us have been screaming for mountain tops for maybe years. That now is finally being widely adopted.
That will carry the builder industry kind of, you know, into the future. And so for that, we’re excited that it’s getting some, getting some FaceTime,
Mollie: but obviously [00:25:00] having your moment
Jake: to moment. Yeah, it’s a. It’s, it’s refreshing to know that there’s as much interest in future technology as you know, tech nerds, as, as we, you know, like just how excited we get from it.
so there’s this mutual excitement that, you know, we can’t wait to tell someone about the next thing. And then the next thing and the next thing and the cool part is, is now we have, we have builders that are willing to listen. And, that’s, that’s super exciting and motivating for us.
Matt: Oh yeah. Without a doubt.
I mean that now I, you know, I say this. In a way, it’s not, you know, it’s gonna sound not great and we, who knows? We may end up editing this out, but like there, there is a lot of positive that’s come out of where we are. Not in the sense of any way anybody getting sick. That’s none of that is positive. But as far as.
The realization is in our industry, [00:26:00] that we have to change the way that we do things on a day to day basis. The way that we present our information, our product to consumers, it is forcing people to realize that their processes, their procedures, their strategy, whatever it was, has gotta be reevaluated and it’s gotta be consumer first.
Or you’re not going to have a consumer to serve.
Jake: Well, I think everyone understands, right? Like that’s, that is, that is the hard thing to say. Right? so I think there’s, there’s truth in it. I don’t think it’s anything bad to say. you know, for years agents, you know, Zillow, we’ve always kind of felt agents were a little bit of a step ahead.
They always had more photos. They always were up on content that was, had kind of a leg up on builders. And we have data to support that. But now this is a time for builders to get catch up. and then, you know, hopefully surpass a lot of what agents are doing. And, and, you know, we can close that gap on those that look at homes versus homes or people that buy new construction.
Matt: I find that [00:27:00] really interesting. I mean, I believe it a hundred percent but I find it amazing that you’re, that you said that general real estate agents produced substantially more content for their listings than a home builder did.
Mollie: Digital listing. Yeah. And not like the whole community or.
Jake: Yeah. They always live, always uploaded.
you know, more photos, longer descriptions. and, and because of that, I think, got a majority of the eyeballs or a lot of the eyeballs
Mollie: in Philadelphia. That is absolutely the case. I know it’s an urban market. Most of our listeners are in more suburban or rural markets, but I mean, new construction has like four photos in there.
Like. Not even good renderings and maybe have a floor plan and a, an existing home has, you know, the maximum amount of images.
Mollie: One of the things that, you know, Zillow is obviously works [00:28:00] with resale and new homes. You got, you specifically Jake are focused on new construction and there’s an entire team that only works on new construction.
And as you guys refer to it, new con. No. When we are talking about new con cause we’re gonna make this an industry wide thing.
Jake: How many times I said new con, oops.
Mollie: No, I don’t think you said it at all, but I love it. So I want it to become a thing. So you guys, when you look at, you have obviously so much data and you’ve been saying for a long time that the number one thing that people say, the reason why they purchase a new construction home is really because everything is new and never used.
And I would have. I think that that percentage is even, is going to go up even more now because the idea of new, you know, fresh, clean, never use, never touched after all of this. Like, do you guys, are you projecting that that would go up as well? Is that what you guys think?
Jake: So, you know what I mean? We, we do a consuming housing trends report once a year.
you know, there’s two [00:29:00] things in here that I think will change. and this is, I think all, all that a lot of us are doing right now is guessing. Right? but yeah, 41% of new con buyers. New construction or new con buyer’s main reasons for buying new construction was because everything was new. Right.
Never used. It’s clean. And you know, that rang true to the 41% before. Yeah. I mean, it’s gotta ring true to even more now. And that’s why. I know you guys are seeing it, you’ve heard it from your builders, that you’ve been talking to, but, you know, spec homes or homes that are built or are just seeing an influx of traffic and interest more so than ever before.
because I think when you say new, Oh yeah, it’s ready now and it’s completely new. Never been lived in. but I definitely, I definitely see that. I would suspect that percentage would go up.
Mollie: And as far as, I mean, of course that segues into resale. Like we have to talk about use, I don’t even want to say resale, we say used all the time.
you know, how much of an [00:30:00] opportunity, and Matt and I’ve been talking about this since day one, like we’ve, we know there’s an opportunity to steal market share, but what is that. What is that percentage of market share? And I know, Matt, you think it’s like a huge percentage. I know that there is a huge opportunity.
It’s going to be really interesting to see what the housing industry does and how we respond to this opportunity to just steal from steal market share from use homes.
Jake: Yeah. You know, so consumer housing trends report, once again, 64% of potential buyers. Quote, unquote consider the purchase of new construction, but we know that only 9% actually purchase.
So there’s a lot of theories as to why there’s that large gap there. and, and, you know, I think, and I think a lot of us at Zillow think that this is a huge opportunity for home builders to close that gap because we have something that consumers want. That resell obviously does not cater to. and you know, we’ve heard about it on resell some of the struggles that, that we’ve seen, you know, you know, a seller [00:31:00] doesn’t necessarily want to open up their home to strangers.
you know, at the time. So inventory is low and builders have a lot of inventory. So this is, this is an opportunity to close that gap and, you know, scream and shut and just shout from the mountain tops of what. Makes new construction unique at the same time. Super attractive.
Matt: yeah, I actually think that, you know, 9% market share.
I think we could double it. I really, really do. And what’s interesting about that is it’s not, it won’t necessarily be a true double, but as far as like units go, but as far as percentage goes, I think we could double our market share on the new con side. and, and the thing there is. I think that obviously VR, so we were already in a suppressed inventory market, right?
There was already too little inventory on the market as a whole. Now people are pulling their homes off the market. Some people, not everybody, but the homes are getting taken off the market. Like we said, we don’t, they don’t want [00:32:00] people walking through their house and never before has that. Stark naked, empty, finished, new house, looked so darn appealing.
You know, we’re always normally like stage that house. We got to get some furniture in there, but now it’s like, Hey, that actually looks pretty good. You know, people can get in. and I think that with the whole, with the whole covert thing, you know, just that, like Mollie was saying, we were all saying, is.
The new never lived in before is really going to resonate. And then on top of that, so many builders today are now jumping on the boat of the healthy options, the smart, the technology side of things, and how that just is really going to amplify the, the ability to buy are the reasons why you should buy new, at least in my opinion, I, I’m pretty, pretty bullish on it.
Jake: Yeah. You know, and, and that 9% of the people that actually buy. And one of the reasons why maybe it could double, hopefully it would double would be kind of two fold. One obviously is the increased interest in new [00:33:00] construction. but couple that with, you know, the decrease in the overall number of, of used homes, right, that are selling.
So, you know, you have kind of pendulum might finally be swinging and we could see, we hopefully could see, you know, the largest jump that we’ve seen in years.
Matt: For sure. Mollie, what do you think?
Mollie: I think that I will be shocked if that is not the case, and it would to me be, you know, just horrible for the industry.
If we, every builder should be saying new, new, new, new, new everything. I mean, that’s the, the most important message is brand new.
Matt: Yeah. I also think that we’re going to see as an from the new construction side that we could see less seasonality this year. Right? So we had the spring market and then we taper off in the summer school.
It’s out. People go on vacation. You know what I mean? Like people kind of go do other things. I think we’re going to see less seasonality and a little bit [00:34:00] more consistency throughout the bulk of, you know, at least the first half of the year, if not longer. Because people aren’t traveling. Right? The kids are already out of school.
Like there are no adjustments. You’re not going on summer vacation anywhere.
Mollie: Well, that’s a really, that’s an interesting point, Matt, and we haven’t talked much about that, but I totally agree with you. And then in addition to that, because consumerism is changing and people aren’t traveling, does that mean that their budget is going to change?
Does that mean that they may be willing to. Spend more on a home because they don’t have all these other expenses that have to do with, you know, lifestyle. Maybe now they’re going to invest more in their home. I don’t know.
Jake: I was joking earlier with someone, you know, I drive a suburban, you know. When when gas prices were a little higher, it’s like $80 to fill that thing.
Once a week. I filled it up once in the last eight weeks, and gas obviously being an all time lowest spent like 45 bucks a fill it. so I’m just, I’m saving hundreds of dollars and just driving. I don’t think my wife [00:35:00] has taken her car to the garage and in eight weeks just cause we just don’t need to.
yeah, it’s just, it’s, it’s interesting.
Matt: I mean, yeah, I, I, that’s where I think Mollie, and honestly we haven’t talked about that cause it just kinda hit me as I was as we were talking. Like I really think that we could see not as much seasonality this year in our, in our selling season and be a lot more consistent just cause people are going to be staying more local.
And like even we were talking about before, Jake. before we started recording, we were talking about like the big events and the conferences that from work travel and you know, like PCBC this year obviously has been canceled. Pacific coast builder conference. It, I don’t know. It’s a real possibility that IBS.
Cause you know, like the wave two happens. IBS may not happen as a whole, you know, and so I th but you start thinking about all those, this business conferences that happen, you know, like what we do at IBS is not the only large conference. I mean, these things happen all year round, all over the place and people are just going to be traveling [00:36:00] less.
And like maybe even to your point, even more Mollie, more disposable income because of less travel.
Jake: Yeah. So one, one thing real quick though, I wanted to. Point up just as you were kind of riffing there and you know, had that thought come to your mind, around a home, you know, just me thinking out loud, you know, how people define their home is probably changing, right?
As well. So you have, you know, I know for ours, cause we’re not going on vacation this year. Like there’s really no way I can think that we would be in my, my kids are asking, well dad, what are we going to go next year? And I’m like, I don’t know. So we’re spending more quality time in our home. and so the home definition to us is, is changing, as, as, as we speak.
So, yeah, that’s, that’s, that’s an interesting point.
Mollie: I think we will see some changes in the industry based on that exact thought. I mean, mate, you know, we were talking in our meeting with our team, maybe we’re going to start seeing zoom rooms on a floor plan. Maybe we’re going to,
Jake: I would love it. Yeah, architecture is [00:37:00] going to change because of
Mollie: finishing rooms.
Maybe there’s going to be like a peace place. Maybe there’s, I don’t know, like it’s definitely, there is a trickle down, in fact, and we’re going to see it all the way
Jake: at homes from back in the day, right? Like how different different styles have come about because of. You know, life changing or world events.
yeah, like his and her offices. And is the, is the open floor plan going to go away because heaven forbid someone gets sick, you don’t want an open floor plan.
Mollie: Interesting. Cause there’s a lot of information about. Right now because office spaces, there are so many of them that are open floor plan and what is going to be the new norm?
I mean, that is going to change. And will that change homes as well? It’s really interesting.
Jake: Well, and then if you think, you know, I can’t predict what Zillow’s going to do in 2021 everyone asked me at my work, you know, well, you know, now that we announced her at home until 2000 end of 2020 what about next year?
And I’m like. I’m pretty sure there’s going to be two factors that go into this decision. One is the health of the [00:38:00] country, right? Like, where are we at in terms of pandemic? And B, you know, the health of the company. you know, we’re learning a lot about ourselves as we go through this and productivity and, and, and, you know, being able to manage from, from remote.
So, what if companies, I’m not going to say it’s a little, what if companies decided, no, we’re going to work from home forever. Right? Like that just changed our home whole home dynamic. We’re what we’re doing now with where my wife and I are sitting, we kind of just think it’s temporary, but now we would want to make some, some changes in our home if this was permanent.
Matt: The rooms become a whole different, you know, like the room usage is a totally different thing now.
Mollie: I had a desk at home and when this all started, I ordered a desk. I ordered a chair. I wanted to make sure I had a space to. Do my work long term. and I, I totally think that is going to become more and more popular.
I think it already was starting to become popular, but quite frankly with group two, I would never have [00:39:00] considered that because of what you were saying earlier, our culture, we thought so much of our culture was based on being together, but it really isn’t necessarily being together all day every day.
And you know, my wife jokingly, I, you know, I’ve taken over our office and our office is, you know, in a place that’s typical of most new construction and most homes, it’s off of the main entrance. You know, that’s probably not the best location to have an office. You know, you have ups and FedEx and you know, USP S coming to the door, and if you have animals, they’re closest to the front door.
But she had two rooms that were hers. One was the office and one was the guest bedroom where you know, those, those rooms aren’t meant to really be used. You, you kind of look at them, they’re decorated in a way. And, and. luckily for us, we bought a aesthetically pleasing wood desk that just looked like this is meant to be an office, but it was never actually meant to be an office.
so, I’ve added, I’ve added some things, because Zillow has been gracious enough to give us, an amount [00:40:00] to go out and kind of outfit around home offices and, and expense that. But it’s kind of a mix of. modern and very like traditional, look. So, yeah, if this is longterm, there could be some, some small renovations going on.
Matt: Yeah, for sure. So what you’re saying is that your, before this, your home office was really like the old school, formal living room that is kids we weren’t allowed, we weren’t allowed to go in.
Jake: Like there’s a, like an antique coat rack or, you know, that’s where we’ll put cuts when people come over.
But no one’s actually, no one’s supposed to actually do anything in here. But I, I changed that.
Matt: That’s so funny. Awesome. Alright, well that Jake, I definitely want to be mindful of your time. I know, you’re, you’re a busy guy and really appreciate, you, really appreciate you coming on and chatting through just kind of what you guys are seeing and how you’re handling everything and, you know, looking [00:41:00] forward to seeing and hearing what’s coming out.
you know, as those, as you guys start. That are in a position to release what you’ve seen and as your start aggregating, aggregating information about consumer behavior. And you know, so anyway, I really appreciate what you guys bring to the table and being the great partners that you are and all the, everything you contribute to our industry.
So I really appreciate coming on.
Jake: Thank you for having me anytime. And, and so. Yeah. I think all of us at Zillow, I think the one thing that messages loud and clear with senior leadership, product engineers, economists on down to sales is that there’s an opportunity right now to really shape the industry.
Because we have everyone’s ears. We have everyone looking at what they can do for like the first time we’re, you know, we’d have those, you know, a little bit more forward thinking builders that, that, you know, I think would be early adopters on a lot of technology. But now a majority of them finally are.
And, and we know that that window to be able to capture their attention is [00:42:00] probably smaller than we think. so we are, we’re working really, really fast to come up with new and exciting things to share with builders to hopefully continue to evolve this industry so we can keep taking away market share from those pesky use homes.
Matt: That’s right. Absolutely.
Mollie: I love it. We always love chatting with you, Jake. And we’re also really looking forward to home builder tech, which is coming up that we’re gonna partner in together as well.
Matt: It is absolutely. I forgot.
Jake: I know I’m, I’m pinging pinging Kenny as we speak. And then the last thing that I, just, shameless plug, you know, Zillow, we actually do have a research page on zillow.com that you can go to and there’s a, like a market pulse.
we had internally this email that was going around from our economists that were publishing, you know, relevant information about mortgage. And there’s a lot of home information in there and it’s just zillow.com backslash research. And if you go to that daily, you can subscribe to updates. But it has a wealth of information, covert related, industry related.
You can get it [00:43:00] all there.
Matt: That’s great. I don’t think I even knew that.
Jake: I’ll have to check it out. No pressure. So that at the beginning, sorry. Stuff. Yeah. There’s a little.com backslash research. it’s something we created specifically because of this and, and I think it’s going to stick around.
Perfect. Awesome. All right, my man. Well, always it’s good chatting and look forward to talking with you soon.
Jake: All right, thanks guys. .