Tom Kelly: Homebuyers focus on commute time
Bryan Mistele inched his way back into the real estate category through what can be a long and grinding road – traffic.
The former Microsoft HomeAdvisor product manager has been developing tools to gauge and predict traffic for nearly a decade as the CEO of INRIX, a research and technology company that supplies traffic information to companies and drivers around the world.
“Nobody likes sitting in traffic,” Mistele said. “And smart applications of traffic data can help drivers not only save time on their existing commute but help them through the process of deciding on the purchase of a new home.”
Last year, INRIX introduced a drive-time tool that quickly was adopted by a regional real estate company for use on its website. Company reps said the traffic question – how long it takes buyers to drive to and from work – had become one of the most important criteria in the purchasing process. That was backed by a National Association of Realtors study that reported 73 percent of all homebuyers consider drive time to work a key buying component.
It appears many real estate professionals are interested in an accurate count of cars and trucks on the road. INRIX recently signed an agreement with Denver-based RE/MAX, giving homebuyers in all 50 states the ability to identify and compare properties based on preferred commute time to work.
“Buying a home is the single largest financial decision most of us will ever make and drive time is a quality-of-life issue important to buyers,” said John Smiley, RE/MAX’s technology strategy officer. “For many, it’s as important as the neighborhood and good schools.”
While the deal with RE/MAX is particularly significant because it brings the first national franchiser under the INRIX umbrella, Kevin Foreman, INRIX general manager of GeoAnalytics, said residential real estate makes up a tiny portion of the company’s business. But he said interest is growing.
“Our core clients are fleet operators like FedEx and rental car companies,” Foreman said. “I think we’ve helped all delivery managers and drivers understand that right turns are a lot cheaper than left turns. They simply take a lot less time. Saving time means more deliveries. In a world measured in miles, we measure it in minutes.”
INRIX said it collects its data by analyzing billions of real-time data points from a combination of sources ranging from road sensors to real-time traffic speeds from a network of millions of vehicles and devices. The Washington State Department of Transportation is just one state agency using the company’s information.
Mistele and Foreman discovered residential broker interest through a cursory email survey.
“We asked a lot of basic questions about drive time and commute hours,” Foreman said. “It turned out quite a few of the respondents had real estate agency email addresses. When we saw that amount of interest, we thought it was time to approach a few companies.”
The U.S. Census Bureau’s American Community Survey published last quarter found 88 percent of American commuters travel to work by car. Moreover, more than 600,000 of those commuters are facing commutes of at least 50 miles from home taking at least 90 minutes each way.
INRIX pitches real estate brokers with three key “homebuyer benefits” in its INRIX Drive Time website and mobile apps:
Find properties that meet critical needs faster: The app reduces the need to guess travel times between work and prospective homes or “drive the route” to find out.
Understand how drive times vary throughout the day: What’s the commute from each home if the owner must be at a work at 7 a.m. or 9 a.m.? Tools show how actual drive times vary between prospective homes and work throughout the day.
Decrease buyer’s remorse: Homebuyers don’t like surprises. Understanding the actual drive time to and from work before buying a home can remove a critical unknown in the most expensive purchase decision most people make.
A dozen years ago, Mistele was chosen to lead a Microsoft company that targeted on-line mortgage borrowers. In a capsule, the software giant set its sights on making a huge number of loans. Mistele soon found that many consumers would spend time doing comparison-shopping online but when it came to locking in a deal, they often would ask the neighborhood branch manager to match, or better, the online offer.
Now, he’s helping consumers to determine how long it takes to get to the branch.
Tom Kelly is a former real estate editor for the Seattle Times.