The Stop Here Realty blog has an amusing post that weaves the names of various real estate web 2.0 companies into a funny post that addresses the relevant business questions for any software solution:
- How do I use these new solutions?
- How will my clients benefit?
- How will I benefit?
- Which ones should I invest in?
- Which functionality provides the best return?
The post, Understanding RE Web 2.0 - btw Where are my meds?, is worth the 2 minutes it will take to read if you are spending any of your time following the array of companies in this space.
I will be presenting about our revolutionary marketing and prediction market platform at the 7th Annual JMP Securities Research Conference tomorrow. I will be joined by John Cunningham, our chief mathematician, who report on some of our early findings regarding the predictive qualities of our platform and player price estimates. We are honored to be one of the few private companies that will be presenting at this distinguished conference.
The concept of the “wisdom of the crowds” popularized by James Surowiecki in his book Wisdom of the Crowds sets forth that the aggregation of information in groups, results in decisions that are often better than could have been made by any single member of the group.
We put the concept to the test once we launched our initial game, Price Me Now, in the Oakland/Berkeley portion of the San Francisco Bay Area. We developed a pricing algorithm that addressed the unique aspects of real estate - that is, real estate is hyper local. You might be good at pricing one market, but know little about values in another.
Once the sales data started to flow in, we ran the player home price estimates through the Realius Pricing Opinon (RPO) algorithm and compared the results to the actual sales price of a sample of homes to see how good our algorithm could predict the true value of a home. We compared the RPO results to other prices - the list price, automated valuation model (AVM) prices and the simple average of the player price estimates.
We found that the moves submitted by the community playing the Price Me Now game, when run through the RPO, was on average 24% better at estimating final sales price then the List Price, 116% better than a public AVM and 260% better than the simple average.
These are early, yet promising results. We are continuing to test the algorithm with more data and actual sales. Stay tuned for more results. Better yet, jump into the game test your pricing prowess and be part of the best real estate pricing community.
We know we are not the first to apply wisdom of the crowds to real estate. Joel over at Future of Real Estate Marketing covered the debut of MyCurrency last year.
The twist that we have taken is to provide excellent information about the home and the market so that the players are educated when they make their guess. We also put some sport into the process by suppressing the list price until you make your guess. We do think that our game paradigm is great way to let real estate players have fun, learn the market and show off their real estate IQ.
The New York Times published a very interesting article last Sunday titled When the Price Isn’t Right written by Peter Goodman.
Goodman writes about the current failure of traditional valuation methodologies and how the resulting uncertainty is slowing the economy.
The global financial system is struggling with tight credit in part because markets are unwilling to buy many of the exotic assets sitting on the books of banks. These assets are linked one way or another to mortgages, their value riding on the ability of homeowners to keep making their payments. With house prices falling and foreclosures increasing, few can be sure what these assets are worth, making the current state of banking something like a poker game in which no one knows how many face cards are in the deck. It adds up to an incentive not to play.
With the real estate market in such a tumultuous state, comparable sales, typically a lynchpin of real estate valuation can not be relied upon to predict future real estate values. ‘Price Me Now’ is one of the few places where you can voice your opinion on the future sales prices of homes and see how your guess compares to other people’s guesses. We hope playing this game will help reduce some of the uncertainty in the market for our players.
That is the question of the day at Realius. As we prepare for the launch in our first market - Oakland, CA Metro area, we have put together a simple little site to find out where you want to play. Click here and let us know.
We were on stage at the Web 2.0 Summit Launchpad. Here is the coverage from O’Reilly Radar. We were the youngest company in the group and the only one that has yet to launch. At the show, we announced that we will be launching our first public game in the Oakland/Berkeley area in the next couple weeks.
We were pleased to be selected Most Creative Idea - here are the four awards:
The voting was crowd applause-based and it was neck and neck between Realius and Spice Works for the most creative idea award. It was an honor to be selected to present on the Launchpad with the other companies.
Ryan Kim and Adam Kopytoff from the San Francisco Chronicle ran a good article on the TechCrunch40 Show. Out of the 100 companies in the Demo Pit, they covered two three- Aviary, 1800Pharmacy.com and Realius.
A quick spin around the DemoPit, where another 100 startups showed their wares, revealed a number of ideas:
–Bay Area real estate fanatics will love Realius ( www.realius.com),
a Berkeley startup that’s building an online fantasy game based on
housing prices. Users sign on to a Web page and a house or condo
listing pops up, giving the usual information in any MLS listing. But,
on Realius, users guess how much the house is worth. Using comp
listings, the site gauges whether a guess is close to market value.
The usual fantasy-league high jinks ensue, ranking competitors
nationally and awarding prizes.
It was great to be in the pit with my fellow entrepreneurs. The buzz from the Demo Pit at the Palace Hotel was loud and constant. As I walked the floor, the typical discourse went as follows - “nice product, who are your customers and how will you make money.” Most of the answers were focused and concrete. I only ran into the “we’ll figure that one out later” comment a couple of times. It is refreshing to see product innovation and strong business models emerging.