Minneapolis data crunchers find success and a new revenue stream explaining housing numbers in easy-to-digest formats.
Clockwise from left, Erin Milburn, Mark Allen, Greg Sax, Jeff Allen and Chelsie Foty form 10k Research, a Minneapolis Area Association of Realtors subsidiary that presents home sales data to clients. The statistical reports lay out everything from pending sales to affordability to how many houses are on the market for every potential buyer.
You wouldn't think a housing crisis would be good for a Realtors association. But at a time when dues-paying members were leaving the industry, the downturn helped the Minneapolis Area Association of Realtors turn one of its strengths into a moneymaker.
The Realtors group, known for its ability to take in-demand housing data and turn it into digestible reports for housing pros and consumers alike, was often approached by associations in other markets that wanted to know how to transform spreadsheets full of numbers into understandable narratives. After industry groups in Brainerd and Mankato asked for their help, they realized they had stumbled upon a new revenue stream.
So in 2007 they created 10k Research, a subsidiary run out of the Minneapolis association's office. In a little more than two years, the group, headed by Minneapolis Area Association of Realtors CEO Mark Allen, has jumped from five clients to 28 today, including one in Canada. Revenue has grown from $16,905 in 2007 to a projected $342,288 this year.
With all eyes watching the housing market for signs of a recovery, housing data is more in demand than ever -- from Realtors and academics, the media and consumers.
Ken Fears, manager of regional economics for the National Association of Realtors, said all real estate associations provide some numbers to members. Some may contract with a local statistician or academic to analyze spreadsheets, have an employee in charge of data, or hire one of 10k's competitors such as Cyberhomes, Altos Research or Clarus MarketMetrics.
But Allen says 10k's format and philosophy set its products apart.
"We have a populist focus,'' he said. "We want our reports to be something everybody can look at ... and have a meaningful experience."
Matt Cohen, chief technologist for real estate consulting firm Clareity Consulting, says 10k provides "better visualization of the data." That makes it easier for Realtors to educate clients about the local market. And educated buyers and sellers are more likely to make sound choices that will help avoid another housing bubble.
"What we do best is take really complicated information and make it simple," said research director Jeff Allen, who is no relation to Mark.
Casual but professional
The 10k name? Ten thousand, as in 10,000 lakes. Hey, it's better than Looky Loon or Digger Dagger, the other candidates. The name choices speak to the casual professionalism of the 10k team made up of both Allens, communications director Greg Sax, director of visual services Chelsie Foty and marketing director Erin Milburn. Jeff Allen peppers his blog entries with pop culture references, and reports have the feel of being written by a friend, not a statistician. It was the first post-college job for both Allen, 28, and Foty, 26. Allen is finishing up his MBA this year.
The data, which come from local multiple listing services -- a frequently updated gold mine of real estate particulars -- are far fresher than the numbers used to make the oft-cited Standard and Poor's/Case-Shiller home prices index.
10k's statistical reports lay out everything from pending sales to affordability to how many houses are on the market for every potential buyer.
User-friendly and cheaper
The group also produces "The 100+," a report that breaks out data by city, enabling buyers and sellers to see how their neighborhood stacks up against metro area averages, and a short-sale and foreclosures report that shines a light on lender-mediated properties.
Before hiring 10k, the Northeast Florida Association of Realtors dumped data into Excel spreadsheets every quarter. But communications director Melanie Green said the old format was worthless for explaining housing numbers to industry outsiders. By contrast, the 10k reports, which are designed with the Florida group's logo and blue-and-green color palette, are "media- and consumer-friendly" and have helped to establish the association "as the voice of real estate for our area," Green said. An added bonus: The monthly reports with visuals cost less than she'd been paying for her quarterly spreadsheets.
10k lets its clients order reports à la carte, or bundle them together for better value. Associations pay for the reports, and agents typically have access to them for no additional charge. They can keep prices low because they are in essence "intrapreneurs," building a company from within an existing organization. They have low overhead since its workers are also employed by the association; the venture is only hiring its first full-time worker this year.
There's also no need to pay for market research: Twin Cities Realtors offer a built-in focus group.
The Skinny, a brief video snapshot of the local housing market, was tested and refined in Minneapolis before being sold to other clients. And when agents such as Edina Realty's Aaron Dickinson were having a tough time educating clients about how lender-mediated properties were driving down the values of all homes, the short-sale and foreclosure report was created to show the chasms between those properties and traditional homes.
He frequently uses 10k's visuals on his twincitiesrealestateblog.com as well. That's another benefit of 10k, Cohen said. As more agents use social media to serve clients, having videos to link to on Facebook or graphs to embed on an agent's website help associations establish themselves as an invaluable resource for members.
10k is about to launch another product it hopes will appeal to current clients and the more than 1,000 associations, multiple listing services and brokerages that could be their clients. The team has been working on an interactive Web-based tool where agents can plug in what they want to see and user-friendly charts appear.
"The idea is we want people to get really specific information without ever having to click a button more than twice," said Jeff Allen. One day 10k hopes the tool will enable agents to create individualized reports so a person thinking of selling his house could see how his home stacks up against other properties in his neighborhood, ZIP code and county.
And the team has noodled with the idea of crunching numbers for other industries one day. "Ten years from now we'll be doing the U.S. Census report," Mark Allen joked.
Kara McGuire • 612-673-7293