An August, 2002, Pew Internet & American Life study found that 40 million Americans, or one third of all Internet users, have used the Internet for information about a place to live. More than three million people are, on average, searching online for a new place to live on any given day.

Internet house hunters have increased by two-thirds since March 2000, when 24 million Americans had used the Internet to find information about a place to live. Daily housing research-related traffic has roughly doubled since then.

A September 23, 2003, Inman Real Estate News article reported that the paid-per-click search engine Overture records about 1.1 million monthly searches for the phrase "real estate" while the number one search engine, Google, will record about 500 million real estate-related searches over the next year.

Google’s paid search program, AdWords, has grown from just a few advertisers a year ago to 150,000 advertisers today. A Piper Jaffray study reported that paid search revenue for 2002 was $1.4 billion and projected it to grow to $7 billion worldwide by 2007.

Real estate-related advertisers are one of Google’s fastest-growing advertiser segments, with local real estate companies being the most active advertisers with the purchase of local search phrases. Web-based companies and individual brokers make up most of Google’s realty advertisers, the article said. LendingTree, for example, is a major keyword-buyer and considers Internet advertising as important as offline advertising.

Jupiter Research reports that Internet real estate classified ad spending in 2003 will reach $274 million; they project that figure to reach $424 million by 2007.

Mortgage Web sites are also popular among searchers. comScore Media Metrix reports there were nearly 5 million mortgage-related searches in March 2003. They found that variations of "mortgage calculator" were the most popular, logging 322,000 searches; "mortgage" and "mortgages" logged 247,000 searches; "Mortgage rates" garnered 112,000 searches; "liberal mortgage" was searched 38,000 times, and "mortgage companies" logged 20,000 searches.

Is The Internet A Threat To Real Estate Agents?

It may seem logical that real estate agents would consider the proliferation of information on home buying a threat to their industry but that perception is contradicted by a July, 2003 E-LOAN, Inc. commissioned study of U.S. real estate agents. The survey found that agents consider Internet home buyers an Internet-savvy group who are more knowledgeable of their financing options, and better prepared for the financing process than their offline peers. The survey revealed that 88% of the real estate agents surveyed agreed that the Internet has given homebuyers more options; 67% believe that it helps customers with pre-approvals, 66% agreed that interest rates are more competitive online; and 59% believe it makes mortgage lending faster. This study would seem to indicate that the Internet has made the real estate agent’s job easier by educating buyers.

The Internet has definitely changed the way the real estate industry operates. A 2003 survey conducted by the National Association of Realtors (NAR) found that 64% of realtors think that having a Web site and using the Internet has changed the way they do business. That figure is up from the 50% recorded in 2002.

NAR Vice President Mark Lesswing said, "The changes in technology usage from 2002 to 2003 suggest an increased reliance on the Internet and new consolidated technologies in the conduct of Realtor business over time."

Mobile phones or pagers are now being used by 98% or more of agents, up from virtually nothing in 2002. Computer use among agents now approaches 100%. Ninety-four percent of agents use e-mail for business, primarily for client contact. Eighty-five percent of agents use digital cameras.

The 2002 National Association of Realtors Profile of Home Buyers and Sellers found that Internet home buyers were more likely to use a real estate agent to complete the home search and close the transaction. Internet users purchased more expensive homes than their offline peers.

In the summer of 2002, Prof. Waleed Muhanna, associate professor of Information Systems at Fisher College at Ohio State, and doctoral student James Wolf, released a report that found the Internet did not replace real estate agents or other industry intermediaries. Indeed, the report found that Internet use by house hunters augmented the relationship between buyers and brokers by functioning as an informational resource.

Internet House Hunters

Real estate Web site visitors are an audience that is primed for a purchase. Nielsen//NetRaings' reports that 22.4% of the visitors to the real estate sites were "definitely" or "probably" planning to purchase a new residence in the next 12 months; nearly 32% were "definitely" or "probably" going to move in the next year.

The National Association of Realtors reports that approximately 4 in 10 buyers now use the Internet to shop for their next home. That is nearly an 18-fold increase in only four years.

An August, 2002, Pew Internet & American Life study found that younger people are more likely to be online house-hunters: 47% of 18 to 29 year-old Internet users have looked for houses or apartments online, compared with 37% of 30 to 49 year-olds; and 25% of 50 to 64 year-olds.

The study found that although Internet house hunters are more likely to have college or graduate degrees, they are spread relatively evenly across all income groups.

Online house hunters are Internet veterans and heavy Internet users: 62% have been online for more than three years and 58% use the Internet daily. Nearly half--46%--of broadband users have looked for houses online, compared with just over a third--35%--of those with dial-up connections.

Online house hunters are more likely to be unmarried suburbanites and more than a third of them are professionals: Nearly 6 in 10 (58%) of Internet house hunters are unmarried; more than 55% live in the suburbs, and 36% are in professional or managerial occupations.

House Hunters’ Beliefs & Online Behavior

In May, 2003, Neilson//NetRatings reported 12 million U.S. Net users, or nearly 10% of the active Internet population, went online to visit real estate and home rental Web sites in March of 2003.

The market research firm NPD Group reported three out of ten online consumers are in or have been in the market to buy a new property during the past six months. The top reasons for searching online for a new property were convenience (73%) and researching prior to talking to a realtor (69%). Finally, NPD Group reported that 92% of all consumers consider property photos extremely or very important.

The California Association of Realtors reports that Internet home buyers spend two weeks working with a realtor, one-third the time it takes for traditional home buyers. They also report that Internet house hunters are more satisfied with the home-buying process than traditional home buyers.

The National Association of Realtors reports that 77% of home buyers consider detailed property information "extremely valuable," and that virtually all online home buyers found the Internet to be valuable. They also report 67% of home buyers believe using the Internet saved them time in their home search.

The 2002 National Association of Realtors Profile of Home Buyers and Sellers found that 41% of home buyers used the Internet as an information source; that Internet users tended to be younger and purchased more expensive homes than other home buyers; that virtually all Internet home buyers found that using the Internet in their home search to be at least "somewhat valuable;" and that 63% of buyers said the Internet shortened the search time for their new home.

The August, 2002, Pew Internet & American Life study revealed that more than a fifth of Internet users who found a new place to live during the past two years reported that the Internet played a vital role in their housing search. Nearly one-third of veteran Internet house hunters relied extensively on the Internet.

The study found that not all of those seeking real estate and housing information on the Internet are active buyers, sellers, and renters. Many Internet users who search for housing information are checking out prices in their own neighborhoods or those in distant cities to stay abreast of the housing market.

Local House Hunters -- Minnesota

The 2003 National Association of Realtors Profile of Buyers and Sellers, Minnesota State Report (a survey of Minnesotans who had bought or bought and sold a home in early 2003) revealed that 86% of home buyers used a real estate agent during their search. But they also relied upon the Internet (71%), yard signs (69%), open houses (63%), and newspaper advertisements (55%) as sources for information during their search. Twelve percent of Minnesota home buyers first found out about the home they purchased through the Internet. Sixty-six percent of Minnesota home buyers reported the Internet was either "very useful" or "somewhat useful" in their home search. Fifty percent frequently used the Internet during their search and 26% used it occasionally. The most valuable Web site features were detailed property information, photos, and maps.

Minnesota home hunters were slightly more likely than the nation as a whole to use the Internet in home search, with 76% of Minnesota home hunters reporting that they used the Internet occasionally or frequently, compared to 71% for the nation as a whole.

Top Real Estate Internet Properties

According to a May, 2003, Neilson//NetRatings report, the top ten Real Estate and Home Rental sites among U.S. Internet users were:

Top Mortgage Internet Properties

Mortgage-related searches led 15% of Internet users to bankrate.com, while realtor.com and mortgageexpo.com each claimed 14%. Another 13% surfed to lendingtree.com, and wellsfargo.com saw 10% of Internet search traffic.

What Are People Searching For?

An e-strategy.com analysis of 1,936 real estate-related search terms compiled from the search term database WordTracker shows that during the past sixty days, the top ten realty search terms were:

1. Real Estate
2. Mortgage Calculator
3. Mortgages
4. Mortgage Rates
5. Realtor.com
6. Real Estate Listings
7. Home Equity Loans
8. Manufactured Homes
9. Modular Homes
10. Century 21

Searches with a geographic intent (i.e. "twin cities home for sale") are very popular, making up 53% of all realty-related search terms we analyzed.

Silly Search Terms: 25 searches were performed for "feng shui buying a home" and "feng shui tips for buying a home."