19 | New Construction Housing Trends with Zillow’s Jake Scherrer

Show Notes:

Focus Discussion of the Week:

Millennials now account for 41% of new home sales in 2019 — are you providing the right user experience for these young homebuyers? Jake Scherrer, director of builder regional sales for new construction at Zillow, joins Matt and Mollie to discuss Zillow’s New Construction Consumer Housing Trends Report of 2019, the Zillow platform, how millennials shop for homes, and how important it is to be “online first” when it comes to the buying process.

 

Top Topics of The Week:

  • Google conducted a study proving that every buyer’s journey is as unique as they are! For example, Justin had 375 touchpoints before he finally purchased headphones. The key takeaway here is to be the “last brand standing.” Will your brand show up after rounds and rounds of research? Would your brand make the shortlist after 375 touchpoints? 
  • Mollie’s attending a Search Inside Yourself Leadership Institute session in Berkeley and will report back on an upcoming podcast!

 

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.

 

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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: With millennials that you need to communicate with this group. You know, this is a group that is used to being involved in a lot of processes and every step within that process. So this is a group that, right. They text, they, you know, they’re, they’re on their phones constantly. I mean, that’s, that’s their mobile computer.

But they, they want to know every step of the process. They want to know, you know, where they’re at in the builds. They want to know even before that, like how they’re qualifying. You just need to over communicate to this group and that’s really what it is that they appreciate and actually not even appreciate. It’s what they come to expect. 

Matt: Hi and welcome to Building Perspective with Matt Riley and Mollie Elkman.

Mollie: We’re here to bring value to [00:01:00] you and your team by exploring all things sales and marketing related, 

Matt: all from different perspectives. Today, our focus discussion of the week this week is new construction housing trends with Zillow. 

Mollie: But first, let’s dive into our top topics of the week.

 

Matt: All right, I’ll dive in first. I was reading this article and it was in front of me and now, Oh, here we go. Now it is. Now it’s in front of me. Sorry. think with Google, by the way, if you don’t sign up, you should get this. I sign up for this and you get a couple of times a week, maybe once a week.

I guess. I get, you know, just random articles. Some of them are quick scans, I delete them. Others are are really good. This one I felt like was, was pretty good. And this is talking about how intent is redefining the marketing funnel. and what I found really interesting here, there is. Did you scroll down?

And it’s talking about the journey is as unique as each consumer, and they have four different buyer [00:02:00] personas, that are all based on the research that they did, the surveys that they conducted. and it talks about how people are searching and what they’re looking for and the type of searches that they do.

Like. Jill for instances researching makeup. And so she had over 125 touch points in her search for new makeup and like key key searches across mobile or things like what’s a good hypoallergenic makeup. Our makeup brand, a quote unquote products hyperallergenic what brands of makeup are hypo aller-?

Hypo allergenic. and, you know, so that’s, that’s interesting. But the one that I really liked, and this was talking about, it’s Justin, right? Justin’s 19 years old. he, his total touchpoints were three over 375. His particular search volume was really based around headaches and things like that.

However, what I found really, [00:03:00] really intriguing, and it plays into what we talk about all the time, kind of having this omni-channel presence, and really what that means is making sure that you are in a place where buyers are searching and the the Justin’s. Journey, is looking for the last brand standing.

And what that means is if you’re in the place where people are searching, where they’re looking, I found it really intriguing that the consumer in this, in this instance, Justin, that’s something that brings brand validity to him and going, Oh, you know what? I’ve seen this. This company show up across my 20 different searches a lot.

Most of the time, maybe they weren’t at the top of the page, but I’ve seen their name show up time after time after time. And that to me is indeed an indicator of. That they’re relevant, that I can trust them because they’re showing up and I’m [00:04:00] searching for multiple different things. and they’re showing up across all these different, different searches.

And I’m seeing that. Right. And so that for me was my big takeaway. Like the search, the, you know, the, the personas were based around makeup, headphones, flights, and candy. Well, I’ll post the article in the show notes and you can take a look, but. That, to me is what really stood out, which was looking for the brand, the last brand standing.

I love that. I can’t wait to look at it. And what, what I love about it is our last episode, we actually talked about the short list and how people are looking for a reason to rule you out. And when you are, You know, that whole idea of being the one that shows up and where people are. And the other thing we talked about was personifying the buyer.

We talked all about that. And that is literally what this is doing.

Mollie:  So look at us. We’re a step ahead of Google. I mean, what can I say. 

[00:05:00] Virtual Mic drop 

While we’re on Google, what I wanted to share is also about Google. I am so excited. I am going to a conference that is based on the Google, New York times bestsellers search inside yourself, which a lot of our listeners I’m sure have read.

It was a very, very popular book and still is. it’s called search inside yourself. The unexpected. Path to achieving success, happiness, and world peace. And what I love about 

 

Matt: World peace, Holy moly. 

Mollie: I know this is like real empowerment in the workplace. So this was a program that was implemented at Google, was extremely successful in developing and cultivating our culture there.

And it’s based around the concept that one individual with a great idea. Can you. It can impact and make so much change. And it’s not just changing that organization, but it’s on a much broader scale. [00:06:00] So I am really excited. I am going to this program, it’s out in Berkeley in December, and I, anyone who wants to read the book and have, you know, a back and forth kind of discussion about the search inside yourself book, please read it.

We’ll put a link in here. We can make this kind of like a podcast book club. Cause that’s my kind of dorking out. You know, Matt likes to talk about tech. I like to talk about books. So, and anyone who wants to hear more about that program, I’m going to report back on how it goes. But I’m sticking with our Google theme today.

Matt: I love it. I love it. Okay. We are going to take a quick break because we got a lot of ground to cover and we’re going to dive into our top topic of the week. or Ash, I’m sorry. We’re going to dive into our focus discussion of the week this week, and that is we’ve got a new construction housing trends with our guest Jake sharer from Zillow, the new construction division.

So we’re going to dive deep. With Jake from Zillow when we come right back.

[00:07:00] All right, and we are back and today we are going to dive in to our focus discussion of the week. We’ve got new construction housing trends with our friend Jake share from the Zillow new construction team. So Jake, welcome to the show. 

Jake: Thank you for having me. 

Matt: Absolutely. So excited to have you on.

And, just so we can kind of make sure everybody knows your role and what you, are. You, at Zillow are the senior director of builder insights, with Zillow. And so that’s a, that’s a mouthful. But, why don’t you tell us and everybody just a little bit about you and kind of your role within the Zillow, Zillow group if they don’t already know who you are.

Jake: Yeah. No problem. Thanks. Thanks so much. so once again, my name is Jake Scherrer, senior director, [00:08:00] regional sales. So, yeah, I do, I do kind of communicate out a lot about the insights and the consumer has in trends report on behalf of new construction. But I’m also, I also oversee sales.

So I’ve been at Zillow for almost 11 years now. I’m seeing it kind of from its inception to where it is today, and I spent about seven years on the premier agent side of the business. So working with agents one-on-one and helping grow up that business until about four years ago when I was asked, or I should say, tasked with coming over to new construction and really helping build out that side of the business using the premier agent.

Business is kind of a blueprint and it’s been great. I absolutely love working with my coworkers, and I love working with builders even more 

Matt: good stuff. Yeah. So I know that with Zillow we’ll like, do you know what’s your, what’s your employee number? Do like what number higher or were you not like a status thing?

Jake: Yeah. We know we have this intranet [00:09:00] and there’s a little pie chart and it tells you basically how many people were hired before you now. Many people were hired after you, and you know, for some it’s kind of a little badge of honor. I was in the hundreds or in in the top 100 somewhere in the 70s but I think right now.

Like 98.9% of people were hired after me. it’s, it’s funny though, because if we acquire a company, we also acquire their tenure. So if we acquire a company that’s older than Zillow, that actually pushes everyone back down, which is totally cool. But kind of a funny, a funny little thing. So occasionally we’ll, we’ll acquire someone and you’re like, I was 98%, but I’m 96%.

That’s, that’s interesting. But, 

Matt: yeah. Cool. Very good. So you’ve been there. I mean, you’ve seen it. So that’s, 

Jake: that’s, that’s all changes. Lots of changes. 

Matt: Seeing the growth, seeing the growth, that’s, that’s always a lot of fun. And so, yeah, that’s, that’s great. 

Mollie: So, so Jake, you were, you mentioned the word insight, and I love that because really, who has more insight into data than Zillow [00:10:00] on buyers.

And I’m really, I’m, what’s going on around the country? So to jump into just our topic, I mean, there are so many things we can talk about with you today. What I want to start with is just who our actual buyer is and what you’re seeing at Zillow and specifically what you saw from the consumer housing trends report.

Jake: Yeah. So real quick, every year, or at least for the last three years, we’ve done a consumer has insurance report. We’ve actually been doing it longer. But what’s nice is the last couple of years we’ve been able to do our own for new construction where we take out the new construction buyer out from kind of the broader kind of real estate consumer has insurance report and we’re able to focus on them.

And this year, you know, every year we get more in depth, right? So in the previous years, I think as we figure out the right questions to ask, we can really narrow down each and every year and who the buyer is, but more importantly, how to reach those buyers. [00:11:00] So it’s one thing to know who they are, but it’s another thing to know how to market to them effectively.

does it meet their needs? And this year was no different. And we really got into millennials, which we’d love to talk about millennials, but kind of surprisingly, it was baby boomers that we also focus on largely because they’re the second largest group that’s by new construction and millennials and baby boomers could not be any more different in their, in their buying patterns.

And also how builders really need to communicate to them. 

Matt: Yeah, no, absolutely. And. I think what you’re referring to is when you guys did, I think we skipped a little bit, but, just to kind of let everyone know, you guys just finished up with your Zillow unlock event a few weeks ago out in Vegas where you kind of unveiled this and, with, with the builders that were there, and obviously you had the, The, the premier partner realtors premier agent out out there as well. And, so [00:12:00] this is kind of be, we’re going to recap some of that for the, for the folks that weren’t able to attend as well. But that, so that’s, that’s interesting though, when it comes to the millennials and the boomers.

Well, what was the percentage? I think those two, those two specific, generations made up. It was what, almost 60% of the entire housing market. 

Jake: Yeah, 69% so millennials being 41% and baby boomers are a 28% 

Matt: okay. Okay. I find that really interesting because I think that it could be some really good insight into what’s to come for us a few years down the road or the next few years, I should say, because.

The boomers, typically they’re going to sell their home and then that is going to then free up some of the first time buyer move in. Right? So that kind of free up some of that price point. and then the, the millennial buyer or the new first time home buyer is going to then be a combination of gobbling some of [00:13:00] that inventory and also buying.

New construction. are you guys kind of seeing and predicting the same similar scenarios? 

Jake: Yeah, totally. And keep in mind that, you know, the millennials, we, we’ve been talking about them for years and years now, but they’re getting older, you know, at the high end, they’re 38 years old. And so what we’re seeing with millennials is that, you know, what’s interesting to them is they’re moving because of a lifestyle change, right?

Or they’re moving because of a life event. So, you know, as this group. Inches older in age, it’s marriage. It’s, you know, having children. It’s new jobs. It’s, you know, these changes that are spurring them to look at the type of house that ultimately is going to meet their needs. you know, and, and with them, it’s, it’s, it’s about life events, but it’s also about, you know, money.

And this is a group that wants to get the best value for their money. At the same time, knowing that 94% of them are financing. Oh. [00:14:00] So you know, they, they don’t always have, they don’t have the equity always from the previous homes. but you know, this, this is so, at the same time, you know, this is a step up to, to what it is that they’re, they’re looking as to be kind of their, I wouldn’t say forever home, but definitely a home where they’re going to spend a majority of their adult life in.

Matt: Yeah, for sure. I, you know, it’s, it’s interesting too, because between these two. Generations. And like you said, the, the millennial, I, I F I think we want to categorize the millennial buyers, this super young buyer, and like you said a minute ago, they’re the oldest millennials, really 38. So that’s not this like, super immature, just coming out of college, you know, person that has no idea what they want.

These are people that have been in the work. Force, their young professionals, their income is higher at this point, and, and they’re entering the buying stage, you know, later in life. and, [00:15:00] and so they’re, they’re a little bit more financially prepared. Maybe they’ve paid off their student debt or they’re paid enough of it down.

But what I do find really interesting is I was kind of reading through the report, is that. Both of these generations are looking for something that’s different than what we’re accustomed to in our industry. And I think that ties into both actual product and there. Actual experience as well, like the experience with the builder itself.

Jake: Yeah, definitely. I know for millennials, what consumer hasn’t trans on it this year. I actually reiterated this year, is that with millennials, you need to communicate with this group. You know, this is a group that is used to being involved in a lot of processes and every step within that process.

So this is the group that, right. They text, they, you know, they’re, they’re on their phones constantly. I mean, that’s, that’s their mobile computer. But they, they want to know every step of the process. They want to know, you know, where they’re at in the builds. They want to [00:16:00] know even before that, like how they’re qualifying.

You just need to over communicate to this group, and that’s really what it is that they appreciate and actually not even appreciate. Come to 

Matt: expect. Yeah. Well, because if you think about that, that open level of communication, the communication level that they, they truly expect their can D I mean, we not just, they, we are now all conditioned for that level of communication for ice, high level of communication.

Because. I mean, I can order a, you know, $25 widget on, on the little company out of Seattle called Amazon and get it in a matter of hours or the next day, but also get notified a when it hits the truck B that it’s on the way and see what, as soon as they left it on my front porch. 

Jake: It was funny.

It was funny. I actually am a little science around this. I was. I’m taking my wife and kids who are just going to grab us Friday night dinner and we go do a red Robin. I don’t know if you guys are familiar with red Robin. Yeah, so it’s company restaurant [00:17:00] started here in Seattle and we have them all over and we go to there.

And the restaurant was empty. And this was like two Fridays ago. And the thing though that was really busy was the door dash and the Uber eats. They had all this food lined up on the like checking counter, but there’s no one in the restaurant. And so this was thinking to myself that even the way that we die in these days is completely changing.

you know, everyone is living, they want, you know, they want the comfort of their home. But they want the convenience of, of, you know, the, like the service, right? They don’t, they don’t necessarily want the, the restaurant experience and all the, the kind of negativity that comes with it.

And it got me thinking about a business idea that is already apparently taken. But, I thought, I thought about, well, what if there was only like restaurants, right? That literally is just a kitchen and it catered to just these, these like, you know, mobile food networks. this is pretty funny.

But yeah, I just started thinking about. This is, this is, this is this millennial generation. 

[00:18:00] Matt: Well, and not only that, like what you just said is actually a real viable threat to the food industry as a whole. It’s, it’s these restaurants without an actual restaurant, like you said, it’s literally a S a kitchen.

They cook food and they deliver it. You know, like they don’t have to have a physical building other than they can actually rent space and just rent out a kitchen and do that. Like, I was just, Molly and I were just talking about this, for the past 30 days I’ve been like. Doing some vegetarian eating.

And so I signed up for like purple carrot and which is the same vegetarian version of go fresh or hello fresh or whatever it’s called. And you know, I get three meals sent to me a week. I cook them. They’re kind of, you know, they’re definitely more fancy, quote unquote, than what we would normally cook on our house.

but you get that kind of dining experience, but at the same time, like a family cooking experience together, much more than sitting down at a restaurant. So I think that’s just. In general, like you said, that’s a, that industry is right for disruption and, you know, I [00:19:00] think it carries over that experience into what we do from a housing perspective.

Mollie: Chef Matt, you know that I don’t cook at all. So here in Philly. We have all these different pop-up storefronts that are actually just pre-prepared meals for city lifestyle where people can just on their way home, pick up, you know, a really nice already prepared steak dinner or salmon dinner for their family.

And that’s really, really popular here. I don’t know if that’s popular in your markets. 

Jake: Well here, and I thought I was like cutting edge. I’m like, I think they’re onto something, but. 

Mollie: Oh yeah, come, come visit Philly. Well, it’s not even the kitchen. It’s the meal is ready. So you go in and it’s fresh meals and it’s breakfast, lunch, and dinner, and they’re already, you know, sized out and all you have to do is heat it up.

Matt: Well, and that all ties into the right, like today’s buyer take out, take out millennial, take off the generational word, but I think today’s buyer is a co as a whole, is looking for that [00:20:00] convenience and looking. And what that really, how that equates to our product that we’re selling and offering and how all the different generations are looking for something different and how we kind of talk about this and a little and a little bit, but the price gap has gotten larger.

The gap from . The people that want to show interest in new construction versus actually buying new construction, that that gap was also increased. And we have to figure out a way other than price to close the gap. And, you know. Doing something different, like if it’s, if it’s this thing where it’s meals are being delivered or whatever, like having an area in your home in a place.

And I’ve seen, I’ve seen this in D C I’ve also, I think I’ve seen this in Seattle when I was there last year, but being able to have like a dedicated area for the Amazon delivery guy, to come in or your hello fresh or your grocery groceries, your meal prepare. [00:21:00] To have an easy access into a section of your home that’s still secure, where they can deliver your groceries in your food and put them in a refrigerator.

You know, like doing different things. like that with our product is really what’s going to kind of help close that, that perceived gap because it’s not necessarily a price gap. I think it’s a value gap. 

Jake: Yeah, totally. 

Mollie: I love it. It all goes together. Before we move on to the next thing, which I actually think segues well.

I just want to say like, how ridiculous is it? How much the millennials and boomers hate each 

Jake: other? Yeah. I mean, on 

Mollie: social media, it’s like all you see is, you know, the O K boomer thing and just, they just tear each other apart and it’s, you know, w. All three of us are kind of sandwiched in the middle, so we can see both, you know, perspectives, but it’s just funny to see, 

Jake: well in, yeah, right.

If you’re a, if you’re like a gen X, you’re, you’re, you’re, you’re kind of proud. You’re like, I’m not a millennial, right. Like, like, it’s a [00:22:00] bad thing or something. 

Mollie: yeah. I think all of us are kind of on the cusp, but we would all say, we’re not millennials. 

Matt: Molly, you are by definition,

Mollie: you know, there’s a whole new generation that they’re breaking out called zonules. So it’s X with Zen 

Jake: cause it’s 

Mollie: all based on when technology hit you. And this, this demo, this like 10 years, don’t quite fit in either. Okay. Anyway, now I’m going on a tangent. So 

Matt: that’s okay. That’s the fun part.

This is bill perspective. It’s all about different perspective. 

Mollie: Yeah. We love talking about cooking and how much boomers and millennials hate each other. but what I do want to talk about, because this is relevant and we tend to not talk about this enough, but it’s the topic of why buying new.

Because, you know, we tend to think of our competition as, Builder, new construction, new construction, new construction. But there is [00:23:00] a whole use home component of it. And you know, with Zillow having all this data. Let’s talk a little bit more through the stats and what you guys are learning about why people are buying new.

Jake: Yeah. I’ll go through the top. The top four reasons why somebody ultimately buys new. you know, at the, at the high end, 41% people buy new because everything in the home is new. It’s never used. There’s an appeal to, to a lot of people with that 37% say it’s because the homes than is desirable location, right?

Buyers these days want to live somewhere safe. You know, when I buy new construction seven years ago. There was this up and coming neighborhood with, you know, this blossoming school district and you know, there’s parks, there’s amenities. My friend or my son, they can walk around their neighborhood and feel safe.

So for us, that would have been number one, but it’s number two here at 37% 35% you know, appealing home features. So, you know, this is what speaks to the, the baby boomers. And we didn’t touch a lot about them, but [00:24:00] that’s what they want. They know what they want and they want those home features because you know, they kind of feel like they deserve that.

And then the, the fourth one on the list at 30% is that new construction is the best value for the money. And I think what makes this one so special is these are consumers, or these are buyers that they understand that there is a cost to, you know, use homes or resale homes that isn’t often discussed.

That’s kind of a hidden, there’s hidden costs that, you know, you don’t face those costs with, with new construction. So although the price point in some cases is higher. They’re, they’re more than makes up for it in what you don’t spend in, in a lot of the, yeah. 

Mollie: This is really interesting to me because, you know, throughout my entire life I’ve heard price, product, location, and I’m sure we all have over and over and over again.

Those are the three things and what your data is showing. Is that product is first for new construction and it’s really product, [00:25:00] location, product, again with features, and then price and value. at the end of that, and I think that’s really interesting because to me, what that says is that today’s buyers educated and they understand some of this product information that’s being put in front of them.

And that all is, From a marketing standpoint, it’s, it’s really important and relevant that we’re communicating the product and the value of that product, to today’s buyers. 

Jake: Yeah, totally. 

Matt: Okay. So really when you’re talking about like some of the numbers that we’re talking about, like commute time and, I think that that’s something that as a builder, we were talking about, like, we’re really stay focused in on.

It’s still about as a whole location, location, location, right? Like you still have to have a desirable place that people want to live that is not going to, fall outside of what they’re actually willing from a willing to do from a commute time. And I [00:26:00] thought that that was something that popped up this year that, I don’t think that you guys had or you guys, but it hadn’t come up yet.

So talk a little bit about that, cause I still find that interesting about. It’s cause it still falls within the basics of you have a great location. 

Jake: Yeah. We, you know, commute time was something we definitely looked into this year and we will, what we did is we tracked the maximum commute or potential new com buyer would be willing to consider and we found that 37% said that they would drive at most 30 to 44 minutes to work.

And 26% said they do 15 to 29 minutes and only 15% said that they’d spend over an hour. And we found that pretty interesting because you know, in cities like Seattle and definitely San Francisco and growing cities like Atlanta and Nashville, and even like Austin, where. It’s getting so expensive to live in kind of the central part of the city.

You’re having to move further and further out. And on the West coast, which is, you know, the [00:27:00] second largest market for new construction, you know, land land is just, it’s nonexistent and it’s so expensive. So, you know, finding that that. As, as a builder, finding that perfect blend of, of like, location, you know, and to, you know, in, in relative location to the city.

That’s, that’s key because buyers are paying attention to it now more than ever. Yeah. 

Matt: I think that’s really interesting. I think it’s one of the things that, has always been there. You know, it’s like, it’s always been a talking point, but it’s not necessarily been like a major, major talking point, but.

As traffic gets, you know, as in the, like you mentioned in these really hyper growing cities and traffic is a real thing. I think that becomes more real. But at the same time, I have a family member of mine that actually lives in the Atlanta market and they, you know, he was, he’s looking to buy a new home or in the process of buying a new home, brand new home, and they want new and [00:28:00] they’ve got to live.

Basically, almost an almost an hour outside of, not just of Atlanta because of where they work and go to school is North Atlanta, like the Woodstock, Canton area. And they’ve got to live like an hour North of there just to get into a price point that they can afford. And so I, I think that that number that, that commute number stretches, it’s all relative, right?

It’s all relative to where you are. but in some markets. If you set an hour to get somewhere, they’d be like, you’re crazy. I’m not driving an hour to 

Jake: get there. But in Seattle, it’s funny cause I live about 45 minutes to an hour South of Seattle. And, and as we, you know, hire more and more people to work in Zillow.

We’re in, we’re in downtown Seattle in our main office. And if people living in Tacoma, you have people, you know, somebody, somebody on my team is, they’re building a home and gig Harbor, which is beyond. You know, beyond Tacoma, that’s an hour and hour and a half away, and then you add in a, you know, rush hour, you’re, it’s over two hours [00:29:00] each way.

Matt: Wow. Yeah. No, I mean, it’s all, it’s obviously all relative to your market, but the location is, it’s, I think it’s still, it’s interesting that it still comes back around to the location, location, location, analogy, but it’s in perspective of. Where you live and what the, what the norm is for your market, because each market is going to have a different norm, at least in my opinion.

Jake: All 

Matt: right. Okay, so. We’ve talked about, you know, who our buyers are this year, or you know who it continues to be. We’ve talked about why people are looking at kind of the why buy new, but let’s get, let’s dive in a little bit to like, how are, like how are they finding us? Is there anything of any real surprise here or is it confirmation of what we thought we knew.

Jake: Yeah. It’s confirmation. You know, 88% said they looked online. honestly, I’m surprised it’s not 100%. You know, everyone should, yeah. I mean, I, I think our [00:30:00] questions are probably so specific that maybe you can’t get a hundred, but, you know, 76% they’re still using an agent or broker.

You know, and, and I think that’s important for builders to keep that in mind. As much as you want to control the sale and you want to control, you know, the commissions, you know, agents are still in the middle of the home buying process. you know, a consumers want that. You know, they, they want the, you know, confirmation kind of validation that what it is that they’re coming upon is actually either a value to them or it’s a, you know, kind of makes the most sense for them, you know, in their family.

But 72% you know, they went directly to a builder or a sales center. And you know, I think that’s something that we’ll definitely touch on a little bit later. But that’s huge. And then as we know, you know, print ads and house signs, that represents about 2% so that that number continues to dwindle.

Matt: Yeah, no, it, it does. And I think that it would be really interesting though, [00:31:00] if that number got segmented out by like buyer demo. Like what that would be if it was able, and I know you guys don’t have it, it’s just, it was just be like interesting to see if it’s a 55 plus what that, what that breakout looks like.

And I would be willing to bet. I think obviously that number. Of the print portion would be higher, but I would be willing to bet that it might surprise people that it’s not as high as they think they fit. Would it be with that age bracket? 

Jake: Yeah. I think, you know, I’m sure agents are going to be just as high, if not higher, you know, with the age bracket.

But you know, print in how signs and billboards, kind of the old fashion forms of media. It doesn’t matter what group you’re in, it’s going to be significantly less than everything else. 

Matt: Yeah, for sure. Well, 

Mollie: that’s why you see so many print publications that are now have an online. Component or an online magazine.

and they’ve combined the media [00:32:00] buy so that you get the print version, but you also get the out online version. So, a lot of our brothers who do print also have it combined with the, the coverage that they’re also getting online. 

Jake: Some builders, I mean, they, it’s still, it’s still works for them.

in their markets. It’s so targeted, right. That they can actually target. Individuals to where you know, they know they’re getting there. They’re the biggest bang for their buck with that. So 

Matt: it’s interesting as a, as a not really related side note thing super fast, but talking about the, the, the print and you know, obviously it’s such a, is a, is a whole, it’s such now a low portion.

There are companies out there now. Publications that are trying to reinvent themselves. And for instance, the New York times now has a podcast that’s called the daily, and it’s interesting. Now they’re, you know, they’re going to get their news out in a particular, whatever [00:33:00] medium people are willing to consume it in.

And I’ve actually been listening to it. It’s actually done really, really well. It’s not just someone reading the news, it’s like an actual produced thing. And, so it’ll be interesting, you know, fast forward five years from now, like some of these, what that evolves to, because it’s, it’s not going to just.

Go away. Like these huge companies like the New York times, for instance, they’re not going to, just, in my opinion, they’re not going to let themselves just go out of business. They’re going to have to reinvent the way that they get media to, to, to the public. And, I think 

Mollie: it’s definitely continuing to change and it’s changing quickly.

I was just telling someone yesterday. My kids don’t watch TV. If they have the choice between watching the show paw patrol or watching YouTube of kids playing with paw patrol toys, they’re going to choose to watch YouTube of kids playing with paw patrol toys. So even the, the experience of how people [00:34:00] consume, you know, any type of, media platform is just continuing to evolve.

So I find it. 

Jake: Not a percent. 100%. I didn’t actually, I’m living that literally last Friday. We cut the core, right? So we said after 15 years of direct TV, yeah, we’re, we’re no longer a client of theirs. And we were doing YouTube TV and obviously Disney plus, and then you have Netflix and, and you add an Hulu and you add in these streaming services.

And you know who had, it was funny, I, I was preparing the family. I’m like, yeah, you guys like, let’s, let’s, let’s like, we’ll have both for like a week so we can transition over. But after one day, my 10 year old ma, yeah. After, after one day and my 10 year olds running downstairs, he’s like, dad, dad, I’m already using YouTube TV.

And I didn’t teach him anything. He just started doing it. 

Matt: They just know it. Well, it’s funny, my wife Amy, she, she said to me the other day, she was like, at what point can we turn off DirecTV? Like, because we had our streaming [00:35:00] services combined our, we have Netflix, we have a prime video cause that’s just part of our, the Amazon conglomerate.

We have Disney plus, we have, said Netflix. We have Apple TV plus. And we actually have our eight Mike’s cell phone providers at T, and, T. and if you, you know, we have a plan what our cell phone cell phone plan, they actually have a thing called, 18 T watch, and it’s literally like 15 cable channels that you can stream through your Apple TV or Amazon fire stick or whatever it is.

She’s literally all we don’t have is. The ability to like stream our local channels, like the format 

Jake: well and YouTube TV does that, not that I’m working for YouTube TV or anything and promoting them, but no, I, I, it’s funny you think that, yeah. You think, that it’s such a necessity, but when we broke it down, we just don’t watch TV.

We just don’t, everything is DVR, which I can, we can still do or you can. Yeah. [00:36:00] Watch it through a streaming service. So, once again, there we go on another 

Matt: tangent. Well, but we talk, we’re talking about how they found us, right? And we’re, we’re talking about the advancement of technology and the tech.

We’re using the tech to help find the right homes. Really, it’s gotta be, it really has to be an important piece of that puzzle. And. You know, like this is where, when it comes to search, and we’re talking about how they found us.  you may not have this and that’s okay and, but is there anything that you have that shows specifically, we talked about the content of w you know, what’s on, what’s on Zillow, how things perform better.

when the tech is in the right tech is in place, right? It’s not just you go there and it’s a Tuesday. Black and white pencil drawing, but it’s actual optimized content within the Zillow platform itself. 

Jake: Yeah, I’d say the, you know, 3d tours is the best example of that. And we [00:37:00] actually asked if 3d tours would help, and this is specifically with millennials, but we asked them if it would, You know, give them a better feel for the space over static photos or, you know, if it would be easier to envision if their furniture would fit into this new space. And 71% of millennials said yes to both of those. 65% of millennials. Really wish that listings had more 3d tours available. And actually almost half of millennials prefer a 3d tour over an in person viewing at least first, initially.

And you know, that’s just, that’s, that’s the generation. That’s the generation that, you know, to what you said earlier, they want to educate themselves. They want to be as sure as possible, you know, and then they’ll come in to the sales center and see for themselves. But. You know, they’re coming into the sales centers and they know about as much about the home as the builders themselves.

Matt: Absolutely. They’ve, they’ve done it all and they’ve done, they’ve done it all online and they’ve, and they’ve [00:38:00] looked, I is interesting. So. A few, maybe, I don’t know, two months ago. So you guys know this, but my kids and I, we’ve talked about it on the show. My boys compete in American Ninja warrior stuff, and so, you know, they have, we travel and do competitions like this is their sport.

And a couple of months ago we were about an hour and a half away from home doing a competition. And I’m sitting in the chairs, like, my kids aren’t doing their run yet, and there’s a lady sitting in front of me, she’s definitely not, she was definitely not a millennial, but. I wouldn’t think she was a boomer, but she was older than me.

but I couldn’t, I didn’t really know about how much. Right. But anyway, sitting there, I’m not like. Stalking. I’m just like looking out into the crowd and she sit in front of me. She goes, reaches in her purse, whips out her phone. I guess she got a text and she all of a sudden fires up a Matterport tour of a home right there on her cell phone in the thing, and she’s like flipping through the wa go.

I mean, she’s going fast too, like going right [00:39:00] through the house, spinning around, getting an idea. I mean, she wasn’t on there for like. 30 to 40 seconds, and as she turn it off, put it away and put it in her purse. And I actually was like, Hey, I, you know, I was like, I’m not stalking you or anything, but like, can I ask you a question?

Mollie: Great way to start a question. 

Matt: I did, right? I was like, can I ask you a question? You know, I’m in real estate, and I told her what I did. And, she’s like, no, these are great. my husband texted me. That link of the sea. If we wanted to go see that home and he knows that I’m not going to go see it unless I can see it first.

And that’s what she said, and I was like, Oh, interesting. I said, did you find that helpful? She was like, absolutely. And I said, are you going to go see that home? And she said, no. Okay. So she like 30 to 40 seconds, she was able to determine if she wanted to waste her time or utilize her time to go and see this home.

And so that, I think that that’s a really interesting that you say that the stats showed that half of them, half of the millennials that were surveyed said that they would rather [00:40:00] do that than see it in person. 

Mollie: But what I hear when you tell that story is pure opportunity, because new home builders don’t realize that people are ruling them out before their act, before they even know they’re looking.

So she’s looking, but a builder doesn’t even know she’s looking and they’ve been rolled out. So from a marketing standpoint, that is just screaming opportunity. 

Matt: Oh yeah. Absolutely. All right. So we just, we’ve run through like a bunch of different things and we’ve talked about, you know, who our buyers are, you know, their, their thoughts on buying new, how they’re finding us, and we’re finding that’s really no big of real surprise.

But. Why aren’t they buying new? So one of the things we alluded to earlier was that gap is increased. The people that more people are interested, but yet less people bought. What is, what does that look like? Why aren’t they buying new? 

Jake: Yeah. So last year in, forgive me, I don’t know the exact number because I’ve already kind of programmed the new numbers [00:41:00] in my head, but, you know, there was.

30 34 30 some percent, you know, people considered and, and you know, 10 or 11% actually purchased. But to what you said, the gap is actually wider than we thought. And we know that because we actually asked much more detailed, precise questions this year. To, to figure out who’s buying and who’s not.

So we have 64% of all buyers were actually open to new construction, which is great that that number is actually increased, but only 9% actually purchased. And that’s actually less than what it is. Which means to your point, yeah, the gap is that much wider, and it’s because of three things, pricing, geography, and mainly timing.

And it has to do with, I think a lot of ’em. You know, marketing and follow up and these experiences and the sales center experience things that a builder has fully in their control, but we’re just missing out on and we just have to be better. 

Matt: Yeah, I agree. And I think that ties into [00:42:00] when we talk about price, a lot of times we, we merge or forget about the value side of it.

And for this point, for the topic of this conversation. We have to make the assumption that they can physically afford your home, right? They can actually, they qualify financing or they’re paying cash, like they can physically buy your home, but what’s happening is they’re not seeing the value to pay a 20 to 30% premium on that new house versus the used house.

And, and being able to close the gap is really. Can be more value gap than it is price gap. And if you’re doing the things that we talked about before, and, and other podcast episodes, that helps tremendously. But I think one of the things that we lose sight on is not just about the product itself from a value, but the experience level.

Also. Provides a value as well. 

Jake: Yeah, and you know the [00:43:00] coolest thing, the thing that I like about this year’s consumer housing trends report is I kind of broken into three sections. And this is, this is kind of the third section we’re talking about, but at the end of every section, we have really good takeaways.

So if you were scheming through this, you know, 50 page, this 50 page book. You could just read the takeaways and literally that can be kind of your marketing compass if need be. And I love in this particular one that we say that, you know, millennials, they’re overwhelmed with the amount of information out there and the process.

So, you know, enlist, like do everything you can as a builder to make this group feel comfortable, right? A need to communicate. But B. You know, enlist happy buyers to tell the builders story, right? Don’t knock the use of testimonials, you know, address timelines. You know, over-communicate if necessary.

You know, show the value. Be transparent about, once again, the hidden costs of owning a, you know, what we call a used home and the savings of owning new construction [00:44:00] over time. But it’s, it’s really, at its core, it’s educating the buyers to a point that you almost feel that it’s overkill. Right.

And, and you know, I think that puts millennials at ease and it makes them more comfortable and we can start to close that gap. 

Mollie: I love that overall message cause we often talk about simplifying and getting, you know, explaining things in a way that it. A child would understand it. And what happens is we’re so in the industry that we tend to overcomplicate our outward facing message, and you really just broke it down.

These are the reasons people aren’t buying, so make sure you are over communicating these three things. I think that that is, is really relevant. 

Matt: Awesome. All right. I think that that part, cause we were going to do, we’re going to like talk about at least three parts depending on what our time allotment is for today.

But, so that was kind of wrapping up the highlights of the consumer housing trends report that was just released a few weeks ago. but I do want to talk about a few [00:45:00] additional things that you guys have that’s new for Zillow, and highlight some of those. So you’ve got a couple of new things.

  1. Zillow, builder profiles and some onsite tour booking. So let’s, let’s talk about that for a little bit, like Zillow, builder profiles. Let’s, let’s dive into that first. Like what is that? 

Jake: Yeah, so this is something we announced at the unlock forum that we held a couple of weeks back. And really what builder profiles are, it’s for the first time there’s a . Single destination that highlights all the builders listens to one place on Zillow.

So think, you know, it’s a higher level. You have the home details page, you have a community page. But now we have a builder profile and it’s a new destination on Zillow and buyers can learn about the builder, their communities. And it really does three things, which is a, an increase increases brand awareness for the builder, which is huge.

It gives the consumer a better all overall experience with all the listings one place, and then it drives more [00:46:00] discoverability for all the buildings. List builders listens, the fact that they’re all connected in one place, people can see the different communities, different locations, and there isn’t anything that the builder needs to do.

We actually have this information already. But what we do ask is that you go into either, you know, your direct feed, go into new home feed, and you can update this page and really promote yourself and talk about all the differentiating factors that make you special and make you stand out and talk about the amenities of why a consumer would, would ultimately choose you.

Because, you know, we’re pre-populating this, but we really want everyone to take advantage of this and kind of customize their own profile, pretty, pretty easily. 

Mollie: So how does the content and SEO side of that work? So are our builders rewarded when they have more content and better content on the platform?

Totally. 

Jake: You know, it’s Google SEO one Oh [00:47:00] one right? So the more content that you can put in there, the better that Google or the, I’ll say, the higher that Google will ultimately index you. So, you know, we seen it on, on the agent side of the business. If you search, you know, agents in, you know, Hoboken or something.

Right? Some random city. he actually see agent profiles that can, at times index higher than, you know, the agent’s own website. And our goal isn’t to take traffic away from a builder’s website by any means, but we do know that a builder’s website is linked in through the, you know, home details page and community pages.

We want to drive as much traffic to your listings, make you as discoverable as possible. And if we can do that by adding some more valuable contents, then, then it’s great. 

Matt: So when the, when a customer comes across or a buyer, potential buyer comes across, it comes into the Zillow platform. They find a builder profile.

What is listed on that specific builder [00:48:00] profile page and like what is the navigation or what is the navigation of that going to go to? Mimic is a, is it much more similar to like a micro site. 

Jake: Yeah, it is. It’s going to have, you know, the logo. There’s going to be, as I mentioned, a brief description.

Once again, we pre-populate it with the information you already have from your listings, but we want everyone to go in there and customize it themselves, and then it’s going to show just really high level, detailed, just community name, right? With little pictures of the communities that people can click into even further.

So you know it’s a tiering, right? You have home details pages, which is the details of that particular home or plan. If you take one step back, you have the community pages, which is details about that particular community. If you go one level even higher, those are the details of what the builder’s kind of whole portfolio is does.

Does that make sense? 

Matt: Yeah, absolutely. So yeah, you’re, it’s essentially like hairs. Awesome. And then drill down to, this is where all we [00:49:00] build in, in this market. And then you can drill down into that individual community and that individual plan or inventory home, and it’s all kind of linked up under that builder profile page.

Jake: And, you know, you know,  you know, ready homes, spec home, like they’re also listed as well. 

Matt: Yeah, right. Absolutely. Okay. No, that’s good. And so have you guys run, have you ran some beta tests on that, you know, before it rolled out? Have you, do you have any, like performance numbers on what it looked like?

Conversions, things like 

Jake: that? I don’t have anything yet, but you know, we do have, from the insights that, you know. The builder reputation is extremely important to consumers. you know, 76% of Newcomb buyers say reputation is very, or extremely important. We also, I mean, not that it’s any secret, but like, this can be something we build off in the future.

Right? Should we ever go down the road of, of, you know, ratings and reviews and say, right, this will be a place that [00:50:00] could potentially house those four, four 

Matt: builders. Yeah, absolutely. And I think it’s. I think that it’s, that’s a really important thing because, as a, as an article that I referenced in the, the top of the show before we brought you in, and it’s really about kind of the looking for the last brand standing and it talked about some different, different buyer personas and what they’re looking for.

And this is all based on. You know their touch points. It’s all based on surveys that this is all from Google that they did with people. And a lot of times people are looking for, it reinforces brand reputation when they see you in more and more places. And it’s kind of like, it just builds that trust over time.

They’re like, wait a minute. I’ve seen this company come up like every time I’ve done it, they’ve come up for something. At least every time I’ve done a search for this, or if I was on Zillow or I was on social media. Media or I was looking on like every time that [00:51:00] your brand can come up in front of the consumer when they’re looking for whatever it is that they’re looking for, that’s always a good thing, in my opinion.

One 

Mollie: thing I do want to say, and you did mention this, Jake, is I don’t want our listeners to take this for granted just because Zillow is populating it and getting it started. It’s so important to go in there and make sure that your message is the message that you want out there right now at this exact moment in time and, and, and really customizing that.

So this is a great tool, but builders, you have to do something with it to get the most out of it. 

Jake: Yeah. And if you need any help, just reach out to us. you know, my email is just Jake s@zillowgroup.com, and I can, I can route anyone to the appropriate rep, but everyone should know who their rep or their, you know, their, their account specialist is.

And we’re more than happy to help. 

Matt: Yeah. Awesome. Very good. Okay, last one. and I, this is, to me, it’s a. It’s a passion for me because I, I love this part of it. So we’ve [00:52:00] got onsite tour booking. Really what that is, is for someone to be able to look at a house, look at a listing, and literally book a tour right there on the spot, on the platform, for themselves to go to go see the house.

so where that’s, that’s something that’s new. So let’s. Why don’t you tell us a little bit about that? 

Jake: Yeah, so this is something that we, we spoke broadly about at our unlocked forum that we had, something we had tested extensively with some of our largest builder partners, but we’re really calling this magic with the push of a button.

And what it does is it connects consumers to builders. You know, potential buyers, they can narrow request an appointment to visit a community directly from a Zillow listing. So, you know, we didn’t take away the ability for them to email or even call a builder directly. But what we found is that people really just, they want to request a tour.

And so in our initial tests, and even what we’ve seen initially is. I’m in early trials, the promoted communities with [00:53:00] onsite tour booking, they actually get 36% more leads. And what we’re seeing is these are more high intent. Home buyers that are sent directly to a builder and it’s really super convenient and that increases in overall is like a better customer experience.

Matt: Yeah, and I think you said something to key that I don’t want to make that I want to make sure we don’t just kind of browse over is you said the leads that are sent directly to the builder. So what, when someone does the tour booking, what happens? 

Jake: Yeah. So what happens is, they go to request to tour and it’ll bring up a day in a time, right?

And these aren’t, you know, we’re going to evolve this to work directly with the builder’s schedule at some point in the future. But right now, these are just, you know, times based on their office hours and days of the week that they’re there available. And someone can say, you know, if you’re a consumer, I want to see.

You know, you know Matt Riley home plan, I want to go visit that cell center at, I dunno, 4:00 PM on Saturday and or lead [00:54:00] or an email gets shot over to the builder and the builder needs to confirm that appointment directly with the consumer. If there’s a conflict of that time, they’ll simply say that there’s a conflict and try to reschedule with the consumer.

But consumers love the fact that they can schedule an appointment directly through Zillow with the builder. 

Matt: Yeah. No, I think it’s great. I’ve been talking to a few builder partners of ours about wanting to get some scheduling integrated into their website cause it’s all about just taking the friction out of the process because that’s what the, that’s what the consumer wants.

And we as builders, we are. Really headstrong about trying to force the customer to go down our path because this is what we want and this is the way that we’ve done it. And I think that removing the friction. Embrace removing the friction because it’ll reward you. And I think that you still, like your stat was 30 what, 30% 36% more leads, like, 

Jake: yeah, 36% more leads and their lower funnel leads, right?

So these are people that, you [00:55:00] know, they’re not just kicking the tires. Some might still be, but most, you know, they wanted to or for a reason. it’s funny, I used to use the analogy, I heard this one just the other day. Someone said, you know, Hey, if you were, you know, maybe wanting to catch a movie with your friend.

Would you just show up to the movie theater at like five o’clock hoping to see something? Or would you stay like, Hey, let’s go see the, you know, 6:00 PM showing of Spiderman homecoming at this particular theater, this time, this date? You know, that’s, that’s what consumers do. That’s, that’s how they’re used to the booking things.

So, we simply just applied that to, to, you know, home building. 

Matt: Yeah. I mean. 10 years ago, you would, maybe it’s five years ago, but I lose track of the time, but like, yeah, you would just go to the movie theater and, Oh, I want to buy a ticket, but now it’s like, no, I want to pick my seat.

Like I want to make sure that I’ve got the right 

Jake: team at time that see everything. Right. It’s this kind of semi customized experience for you [00:56:00] and you take, you take the guesswork out of, you know, maybe someone not be in there or something not being 

Matt: available. Yeah. I think that what you just said is that’s that everything we’ve talked about, whether it’s price, slash value, whether it’s location, whether it, I mean everything we’ve talked about, I think all circles back around the customer experience and how you make them feel when they interact with you or attempt to interact with you.

And if we make it really easy to do business with ourselves, then. A lot of times things are going to fix themselves right. 

Jake: Yeah. And it’s not, it’s not overly complicated. you know, sometimes the answers are right in front of us and you don’t need to reinvent the wheel. You’re just, like you said, removing the friction.

And sometimes it’s the simplest of things. 

Mollie: Yeah. And one thing that keeps coming to mind for me is just this element of control. And I think as an industry, we have had, you know, decades of wanting to be in [00:57:00] control of the process and where the buyer goes in the process. And. And giving some of that control away and letting them make the appointment and, and putting them in the driver’s seat is really the big shift in our industry.

And I think, that definitely ties into this new feature, the onsite tour booking. So I’m excited to, to hear more about 

Jake: that. Yeah. And as a, as a progress, as we’ll have more and more stats, I will say that this is an opt in program or product. So in order to take advantage of it, you need to reach out to your rep.

you need to talk to Zillow. You know, we’re doing our best to communicate out that it is an option, but this is ultimately something that you need to, you need to kind of raise your hand and say, Hey, I would like to. I’d like to use this. 

Matt: Yeah, absolutely. Yeah, I would jump all over it for sure.

I think it’s, I think it’s brilliant and, and I think it’ll evolve and hopefully some builders will jump on board and, and incorporate that into their own site as well. So I 

Jake: think you don’t need to, [00:58:00] I mean, I would, I would encourage it on every community, but it doesn’t need to be every community.

Right. So you can do even, you know, AB tests, you can do different things to see how well it’s working for you. 

Matt: Yeah, absolutely. Okay. Awesome. Well, Jake, I know that, we, we, I want to be aware of your time and we’ve been rolling on pretty good with some, with some awesome stats. So what I want to do is go ahead and wrap up today’s episode.

I know we didn’t even get time to, dive into everything because there was so much to cover, but we’ll definitely have to do is have you back on again, another time and, and talk about. The other stuff and what you guys have going on and all the, all the exciting stuff. So really appreciate you coming on the show and sharing all your valuable insight with us and, talking Spiderman, homecoming and movie theater to our, we get tickets and, you know, driving to work well, restaurants, the whole thing, right.

A ton of fun [00:59:00] and really appreciate you, coming on the show. 

Jake: Yeah. And, and I, I appreciate you having me and I’ll just say that we have a ton of data. It’s on Zillow. be a little self-promotion here, but go to zillow.com forward slash resources forward slash new dash construction. I know it’s kind of a mouthful, but that’s our resource center and you can actually download the full version of the consumer housing trends report there.

Or if you email me personally, I’d be more than happy to email out a couple or actually mail out a couple of books or, or email you the direct link. And that’s simply just Jake s@zillowgroup.com. 

Matt: Yeah, we’ll, we’ll utilize technology and actually put that link in the show notes. 

Jake: You can do that.

Matt: Yeah. Crazy. Awesome. Awesome. Well, thank you so much, Jake. Really appreciate you coming on and I look forward to having you on again soon. 

Mollie: Thank you, Jake. 

Jake: Thanks man.

Matt: Bye.

[01:00:00] All right, and that is going to do it for us. This week. Thank you guys so much for joining us on another episode of building perspective, make sure you join in on the conversation on our Facebook group. You can find us on building perspective. Ask questions, join in on the conversation. We’ve got lots of fun back and forth in there, a fun articles and all that good stuff to talk about with peers.

Super smart people all over the country. 

Mollie: It’s been fun building perspective together and we will talk with 

Matt: you

soon. 

Have a great week. .

 

We connect you with buyers.

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