Hitwise Real Estate Analysis: Part 2 - Rent vs Buy and the Long Tail

Yesterday, we took a broad look at the real estate vertical by comparing for rent search terms with for sale search terms and found that the market share of for rent terms had overtaken that of for sale terms in 2009. Just to review, by market share for search terms, we mean the percentage of the 10 million U.S. internet users who searched with a given keyword (search term) and from that query clicked on a site that Hitwise categorizes as part of the Real Estate Industry (of which there are a few thousand).

So, today we wanted to get a little more granular to see what specific terms or perhaps keyword and its permutations had contributed to the new trend towards renting. Yesterday, we compared all terms that included the word rent versus all terms that included the word sale to draw our conclusions; today, we are going to look at one specific term to gauge the shift, 'homes for rent' versus 'homes for sale.'

We saw enormous gains from 'homes for rent' in 2009. There are two charts below, the first, shows that both 'homes for rent' and 'homes for sale' gained market share in 2009. However, the market share for 'homes for rent' skyrocketed nearly 150 percent from January 2009 to January 2010, although 'homes for sale' retains a slight edge, gaining around 41 percent in the same time period.

The second chart just shows rank by market share, and it mirrors the above chart, 'homes for rent' jumped from 20 to 9 and homes for sale moved up one spot to 8 in January 2010.

So a big part of the gain in market share was definitely an increase in the 'homes for rent' search term; even last year, we saw an increase in searches for single family rental homes.

Also contributing to the rise in the market share of 'rent' terms was the gains in the search term 'apartments for rent,' which grew from .384 percent in January 2009 to .648 percent in January 2010.

The interesting part, however, is how the long tail seems not to apply to our results. Most vexing is the fact that although the number of search terms that include the word 'apartments' decreased from 60 to 45,, the market share of the sum of those terms increased from 1.27 percent to 1.32 percent. This trend suggests that more volume is being funneled through 'head terms.' Else, the long tail is so long, that the top 1000 terms is not a large enough sample to really draw conclusions. What do you think?