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INTERNETUSE:THEEXPERIENCE OFREALESTATEFIRMS ANDCONSUMERS 197to greatly increase efficiency and depth by expanding ac-
cess to finance from personal networks to a broader set of
virtual, anonymous financial markets.Property Management
Property management companies with large portfolios of
apartments need to integrate specialized property man-
agement software on the one hand with effective com-
munication with investors, customers, and managers on
the other. Both the Internet and its segmented, private
version—the intranet—are now being used for to access
data and analysis from these applications and then to dis-
seminate the information. At any given time, it is possi-
ble to retrieve the latest data regarding revenues, expir-
ing leases, and vacancies. Real-time online tracking and
database accessing are made possible by this two-way
transfer of processed information.Project Management/Development
and Predevelopment
The complex coordination needs of large projects are now
being met by a new generation of Web sites that com-
bine virtual community creation, online collaboration,
and support services to create an environment in which
the entire process from the design stage to the construc-
tion process is streamlined. The scattered activities of sub-
contractors, architects, engineers, developers and others
can now be brought together on a technology platform
under the aegis of an Internet firm in order to facili-
tate quick changes in blueprints, fine tuning of work in
progress, and resolving supply bottlenecks. Some devel-
opers, construction firms, and contractors have their own
specific, project-linked, intranets to manage their supply-
chain issues. Some predevelopment oriented Web sites
have developed online technology platforms for studying
cost metrics, design parameters, and feasibility analysis.
Digital storage of project data and information, accessible
databases/blueprints, online updating/fine tuning, supply
management, and project planning capabilities result in
new kinds of value creation in real estate.Relocation Services
The United States has an extraordinarily high internal mo-
bility, with more than 20 million people moving each year.
A number of Internet-based relocation services firms have
appeared offering complete relocation packages (pack-
ing, shipping, trucking, etc.), with links to moving compa-
nies, listings for the destination point, short-term rentals,
and other relevant information about the destination city.
Some sites also come with a range of excellent tips and
checklists, with both “before move” and “after move” ver-
sions. For corporate customers there are modules for cost
comparisons, as well as absorption data, vacancy rates,
and office, retail, or industrial spaces available.Title and Other Property Insurance
Insurance plays an important role in all real estate trans-
actions, since both investors and lenders will desire pro-
tection against physical risks (such as fire) and the risks
of an invalid title (title insurance). Many activities of aninsurance company—actuarial, claims, and billing—are
highly data and informative intensive. So it is not sur-
prising that insurance firms are taking significant ad-
vantage of Internet capabilities in managing their back
offices. Furthermore, the Internet is increasingly being
used to market insurance, based on the ability of firms
to offer policies based on the information that the con-
sumer provides, and for consumers to carry out compari-
son shopping. Title insurance is a particularly interesting
example, since records pertaining to property ownership
are now becoming available online. The computerization
of these records together with the advent of the Inter-
net is allowing title insurers to expand to serve national
markets.INTERNET USE: THE EXPERIENCE OF
REAL ESTATE FIRMS AND CONSUMERS
The Fisher Center for Real Estate and Urban Economics
at the University of California, Berkeley, carried out a lim-
ited survey of a sample of 60 leading real estate related
firms in the United States and California. [The sample
consisted of those firms that were members of the Ad-
visory Board of the Fisher Center for Real Estate and
Urban Economics at the University of California, Berke-
ley. These firms cover a wide range of real estate activi-
ties and are among the largest in the industry. See Bard-
han, Jaffee, & Kroll (2000).] The survey showed that over
four-fifths had Web sites by March 1999, with about one-
third having already established their sites by the end of
1996 and another third with sites inaugurated in 1998 or
early 1999. Brokers, lenders, financial services firms, law
firms, and residential developers were among the early
adopters. Commercial developers, consultants and advi-
sors, lenders, REITs, and investment firms were among
the later adopters. Those without sites were more likely
to be privately held firms with a relatively narrow base of
activity.
Most firms with Web sites used their site to provide
information about the company and to market services.
Some marketed property from their site (either as indi-
vidual pieces or as part of a REIT), providing detailed
information on the characteristics of buildings available,
surrounding communities, and other related data. Other
Web site uses included employee recruiting, providing in-
formation for members or investors, and disseminating
related information on topics such as regulations or real
estate markets (see Figure 1). It should be noted, however,
that both the survey mentioned above and one from Geor-
gia Institute of Technology mentioned later will become
outdated in a field that is changing as rapidly as e-
commerce.
From the point of view of real estate firms, a key fea-
ture of the Internet is to create initial leads that are later
followed by transactions. Real estate businesses use the
Internet initially for marketing and communication, and
later additionally for customer support and service.
Web sites frequently lead to contacts that are then nur-
tured through telephone and person-to-person meetings.
For residential real estate, Web activity from the point
of view of the consumer includes residential searches,