Some might say the term “game changer” is overused these days, but sometimes there’s simply no other way to describe something – and “game changer” is exactly how many Realtors feel about a technology called Altos Research, which has made their lives easier than ever before by providing extremely up-to-date market data in an easy, digestible way.
If you’re a Realtor, you’ve probably heard of Altos Research. If you haven’t, you’re going to want to keep reading. That’s because the founder of Altos Research, Mike Simonsen, spoke to us about what Altos is, why it’s an invaluable tool for real estate agents, and how it came to be.
Hi, Mike! Thank you for taking the time to speak with me today! Let’s start by talking about how Altos came into existence. Did you have a real estate background before creating it?
Sure. I started Altos almost 15 years ago, in January of 2006. I wasn’t in real estate, I’ve always been a data software guy. I like taking crazy information and data and making it usable for people. In Silicon Valley I was doing network security stuff, where there’s a billion packets on the network – and which are the bad ones, right? It was that kind of visualization work and data work that I had been doing for a bunch of years before I started the company.
Then I had bought a crappy little Silicon Valley house with a giant mortgage, and then the NASDAQ bubble blew up. So I was trying to understand what was happening in the market and to my mortgage and the neighborhood, so I started building the data so I could understand. And it was at a time when information about homes for sale and other real estate information was finally available online so I was able to use that information to build models and start doing the analysis for myself. And then after a few years of that, I realized that I had more information than anybody else. I had learned more about what was going on in the market. And so I started to commercialize it. And that’s where the company came from.
So it was actually really personal. It sounds like you were just curious about the topic because you’re a numbers and data guy. And then you were able to make something out of it.
Yes, it was very personal. It was just a process I was doing for my own need and for my own use for several years before I started doing work beyond my own neighborhood and into the rest of the state of California and the rest of the country.
So let’s fast-forward to today. How can real estate agents benefit from using Altos?
At Altos we track the active real estate market and we do it in real-time. This includes all of the pricing, supply and demand, and metrics that are happening in the market. Traditional real estate data is actually several months old by the time it reaches the consumer. You know, the house is on the market in October, it gets an offer in November, the deal closes in December. That information doesn’t get to consumers until January or February. So what Altos does is track the data on Friday and publishes it on Monday so you know exactly what is going on right now, based on extremely current data.
And so what we do for Realtors is we package all those analytics up for them – for them to be able to reach their clients, and to help their clients make better decisions. It’s a matter of reaching people. As a Realtor, it’s super competitive to reach new consumers. And one of the ways you distinguish yourself is by having really useful information that all consumers want. And it turns out that everybody wants to know what’s going on in the real estate market right now. So that’s what we do. We package all that information up for Realtors and brokers to reach consumers, to reach new leads, to convert those leads into clients, to communicate and nurture those relationships over many years.
As a Realtor sending stuff to your clients, there’s very few things more valuable to a client than insight about the real estate market. And it’s all automatic so it’s super easy. This is great because most agents don’t have a lot of time, and it can be difficult to look at the data and understand what it’s saying and present it. That’s a lot of work. So we do all of that.
Do you have market data for everywhere in the US? Even, for instance, a zip code in rural Iowa?
We cover about 98% of all areas of the country. So there are a few rural Iowa zip codes that we don’t cover, but there are basically no homes in those places. Just a lot of farmland.
Do you target a specific type of Realtor? Or is Altos for everyone?
The thing our Realtors and brokers have in common is that they’re investing in their business. They’re growing it, they’re investing in tools and resources and communication strategies to grow their business and reach more people. So they may be anywhere in the life cycle of their real estate career. We have folks who’ve been around for a long time and we have very brand new agents who are just building their businesses. We have people who are very tech savvy and those who are not at all. And you know, even the ones who are not very tech savvy want to be able to put a market report at the top of a pre-listing presentation or a HighNote presentation. You want to have it right there because there are really only three questions that consumers have: “What’s for sale?,” “How much is my house worth?,” and “How’s the market doing?” So in a HighNote presentation a Realtor can use the market data provided by Altos to answer those questions. You can imagine that any agent who is putting any kind of presentation in front of their clients wants to be able to answer the “How’s the market?” question in a really thoughtful, powerful way.
Can you dig deeper into how Altos helps with lead generation?
Yes. So with market data, you have the opportunity to do things like engage a new customer who you don’t know yet. Or maybe you know them, but you’re not doing business with them; they don’t work with you as a Realtor. And one of the ways to do that is you say, “Oh, you’re looking for a house in Calistoga? Here’s my Calistoga report.” And so they go, “Oh, that’s great.” And then they say, “Yes, I’d love to get that in my inbox every Monday morning.” And now that person has gone from a contact or a friend, or a friend of a friend, to a lead in your database who may do a transaction sometime soon. They want the information in their inbox because they want to know how the market’s doing, and the market data is answering that. So it’s a great way to convert new leads into your contact database.
And Altos can even run Facebook ads on the behalf of real estate agents, right?
Yes. Facebook ads are really powerful. It’s an extension, it allows you to reach a bunch of people you don’t know yet with the power of Facebook. We do one-click Facebook ads. Our system intelligently writes the ad copy based on the market conditions. So it’ll say, for example, “The market in Palo Alto is surprisingly strong going into the fall. Click through to see all the details and subscribe.” So we run these ads for agents; they don’t even have to set up a Facebook business page or anything like that. We do all the work, and the lead goes right into their inbox.
What about good old-fashioned email campaigns?
Altos does that, too! Imagine you’ve got a database of people, of contacts, and you need to nurture those relationships over time. You want to nurture them until they’re ready to do a first transaction, or maybe it’s been six years since you worked with them and they’re moving again. You want them to call you. So we do automated email campaigns with the market reports. The reports come out every Monday, they’re always fresh. We put needed information into people’s inboxes. The emails we send get really high click through rates (37%) as far as marketing emails go, as opposed to some random real estate marketing email that might get a 5% or 6% click through rate because it looks like marketing. It’s a really fascinating way of doing things. So we take care of all the emails for our clients.
That’s awesome. Your clients don’t have to worry about much at all! What about website integration? How does Altos help there?
When Realtors build their websites, they have a few things they need to provide. And very often it’s those three questions we talked about before – it’s what’s for sale, so they have an IDX search; it’s how much is my house worth, so they have a little bar where you type in your address to get a valuation report. And it’s how the market is doing. There’s a lot of community information that Realtors put on their websites so that if you’re looking and you’re new in town, you can find a Realtor’s site and figure out if there are homes in your price range. We provide that through website plugins that agents drop on their sites, little charts that are for their city, state, zip code. They’re always live with the latest data, they pull out of our databases. So there’s always fresh data, which is both cool looking and powerful on the agent’s website.
Awesome! I see why so many agents rave about Altos being such a valuable tool! And what about CRM integration?
Well, when a Realtor is nurturing their contacts over time they use a CRM and they have their database, but they’ve got leads coming in from all different sources. All of those leads, all those contacts, will benefit from getting the market data. If you’re in the real estate market you want to know what’s going on. So we integrate with the CRM so that you can be an agent looking through your CRM, a lead comes in, and it automatically gets handed to Altos. Altos then gets the right local market report for that contact and sends that information back into the CRM. So as an agent, you never actually even log into Altos. You stay in your CRM, and all the data is there in front of you.
Now I’d like to talk about HighNote a little bit, because a lot of agents that use HighNote like to put your market data straight into their pre-listing presentations. Can you speak as to why Altos and HighNote make such good partners?
Yes, for sure. HighNote is about creating a presentation of relevant, good looking, powerful content that the consumer needs. And, you know, just like everywhere else in our conversation, market data is a really strong part of that conversation, part of that presentation. So you might say to a client, “Look, while we have your house listed, I’m going to give you this market data every week; you can find it in this HighNote presentation. And I want you to keep your eye on one number. If this number is falling while we have your house for sale that’s because there are fewer buyers and more seller competition, so you as a seller should be aware of that.” So that’s the kind of power that you can put in it. So any time you create a HighNote presentation, no matter where a consumer is in the real estate transaction, they always want to know what’s going on in the market throughout the entire process. So we’re building a nice little plugin that will allow them to get their local market report dropped right into their HighNote presentation in just a couple clicks.
Great! Now for my last question, I’d like to talk about what’s going on in the real estate market right now, in regards to COVID-19. I guess it’s safe to say that no one saw this coming!
You know, the fascinating thing going on here in the fourth quarter of 2020, when we’ve been living through a pandemic for six months, is how unbelievably hot the real estate market is. Inventory is at record lows. Normally right now, at this time of year, we’d have a million homes for sale across the country, and we only have 570,000 this year. It’s crazy. Americans are buying everything in sight, and prices are climbing as a result.
Had you asked me about my market forecast for Q4 back in March, never in a million years would I have predicted that we’d be in this spot right now. I never would have said that people would be buying up everything and prices would go through the roof. We’ve got so many people unemployed. It doesn’t make any sense, right? But prices have been going through the roof because inventory is low and demand is off the charts. So we’re looking at 2021 as a super powerful, strong year; the trends seem to be continuing. But the cool thing is, when the trends change we get to see it in the data here first. At some point there are going to be things that lessen the demand. Maybe interest rates climb. And you don’t want to be waiting for the newspaper to write that article before you’re talking about it, before you let your clients know, before you can make decisions. And that’s why we do what we do.