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Some Real Estate Photography Market Insights From Rusty In LA

November 11th, 2009

I got an e-mail yesterday from Rusty Freeman in LA. Rusty said:

Larry: Just wanted to tell you about an MLS search we completed this past week on the local board. We searched the county for all homes $2 mil & up. Found over 1,000 listings. …

I was looking for homes & agents to target was the reason of the search.

What I found is what I wish to share.  The 1,000+ listing ONLY a few had professional photos, less than 40+/- the rest 950+ had photos taken with an point & shoot, one front photo only, interior photos blown out or black, or even iPhone photos, no joke.

The 10+ agents we have talked with this past week, as a follow up, none are spending any money right now, zip ZERO. I got the same answer for all of them. Ten rejections in one afternoon was all I was up for, I did not call another one.

The average list time DOM was over a year, some going on 500+ days too. The agents said in this market for higher end property a good photo set does not make a listing sell, buyers do.

Until the market changes, we are looking at a less business.

I was surprised to see just how many non-professional photo listings there were, in the $4mil to $20mil range, the agents are doing the photos themselves to save money, plain fact.

We do have other photography business, which we are looking at expanding at this moment, our skills & new web site for Real Estate will just sit for now, maybe in the spring.

I wanted to pass Rusty’s experience on and add some commentary. Here is what I told Rusty:

To understand what is going on in real estate these days, you need to look at the big picture of what the real estate bubble we’ve been through looks like (http://www.ritholtz.com/blog/2009/07/update-case-shiller-100-year-chart/) and realize that:

  1. The most important thing that sells a home is price. To sell homes in this market agents can’t let home sellers tell them what the asking price is. To sell, the price needs to be market based from facts and data. But sellers have difficulty accepting what their home is worth in this market (in some cases 1/2 what it was worth in Jul 2006).
  2. Once the home is correctly priced then the photography and marketing can do it’s job.
  3. It takes a lot of hard work these days to convince sellers to price their home to the market. For many sellers, it’s impossible. The media is talking about how we are “coming out of the recession” so sellers are telling themselves if I just hang on for a few months the market will come back. The reality is the market may not get back to July 2006 levels in our life time or ever.
  4. It is impossible to talk accurately about the real estate market in general. The real estate market is highly dependent on where you are. That is, what’s happening in high-end homes in LA may be very different than other geographic locations. Even different locations and price ranges in LA.
  5. Even in great real estate market years, during Nov and Dec in the northern hemisphere real estate sales drop towards zero.

Rusty is taking the right approach. There are many locations where the situation that Rusty found is similar. However, there are locations where there is work for real estate photographers. This is not the time of the year to mount a new marketing campaign. After the first of the year and in the spring is better.

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21 Responses to “Some Real Estate Photography Market Insights From Rusty In LA”

  • Greetings,

    I would encourage Rusty to continue his efforts after the first of the year and not give up on the sales and marketing. It is hard to get rejected time and again but what you are looking for is maybe the 1 in 50 or even 1 in 100 clients that really value what you can bring to the table. The entire marketing focus is what you can do for the agent, not the fact that you take awesome photographs.. I have also found that I need to help my clients spearhead their marketing efforts by assisting them with websites, video and printed materials. I have had to expand beyond just offering photography to offering entire marketing packages and concepts. It has been a real effort to educate and package this new approach but its working. Real Estate agents are sales people but they are not marketing gurus for the most part. many of the older agents are having a tough time embracing new marketing strategies that include new internet communications technologies (iPhone presentations), social media and the like. I believe there in lies an opportunity in itself, educating through seminars, meet up groups and blogs for RE agents.

    Larry, I agree with your assessment and everything you have shared above about current market conditions. It will take quite a while for the market to come back, if it ever does, to the insane levels of 2005.

    Best Regards,
    Ron

  • PS: Check out a new website I just completed for a very progressive agent in Jupiter, FL

    http://www.jupiterhillsrealestate.com

    Thanks again,
    Ron

  • Good Morning,

    As both a realtor, and a professional architect photographer, I love to see my fellow realtors declare that November and December are terrible real estate months. That means that they are not working as hard as they do the other months of the year, and that leaves more business for me.

    I belong to an MLS which numbers more than 27,000 realtors. Every year I remain in the top 5% in both sales and listings. One reason for this level of success is that I work as hard in November and December as I do the other ten months. This means Open Houses on Thanksgving weekend and during December as well. Last year, 2008, I wrote two contracts, totaling more than $1 million, on Christmas Eve Day, and one of the contracts came by way of an open house. A lot of buyers look to be in a new home either before Christmas, or before January 1st and I plan to be the realtor that will accomodate them.

    Many realtors slow down and take time off during the last two months of the year, and I have nothing against that. Spending time with family and friends is a major part of the holiday season. As for me, I just keep on working, keeping my name before the buyers and sellers and letting them know I’m always available, even in November and December. And yes, I do find time for my family and friends, as well.

    Works for me,
    Doug Scott

  • Rusty is advertising unlimited photos for any size home for $130, and he’s researching $2 million plus homes? Considering travel, shooting time, and post… what sort of hourly rate does that work out to if the client doesn’t upgrade to additional services?

  • I have to agree with Michael here as far as being curious about what’s going on with this. $130/unlimited photos for multi-million dollar homes and high end agents… I am a bit perplexed. I also have to say that this particular article pretty much made me question whether I’m getting into a good business here. It feels really negative torwards RE photography. I understand the reality of what’s happening in our market, AND that the market doesn’t really give a d@mn about what the media and the government say… so with that, are we saying that RE photography is a not-so-good to bad idea, or just a bad idea right now, i.e. winter? I am curious what you all think, and a bit more nervous after reading this.

  • Joshua- Don’t be discouraged by the fact that there are some locations and price ranges like Rusty described in LA where agents aren’t spending money. It’s also important to understand that what’s going on for Rusty in LA in the $2 mil and up market doesn’t say anything about what’s going on in . You have to do what Rusty did to figure out your market! As I pointed out, it is highly probable that it’s possible to find some other area and or price range in LA where the market is better.

    There are photographers all over the world making a living from real estate photography. There are just too may economic factors that are geographic dependent to make one simple characterization of the US, a state or a city.

  • It would seem that RE photographers may be marketing to the wrong group? What would prevent
    us from taking out an add in the RE section of your local paper with a link to your website where you could educate HOMEOWNERS about the importance of RE photography…

    Problems selling you home? Are you hiring an agent to sell your expensive property and they show up with a point & shoot camera? Is your million dollar home being properly EXPOSED? Make sure when you interview a potential RE agent that you know what kind of photos will be taken of your property..

    Just wondering if this approach has been tried by anyone..

  • Bob….
    While that might get you some one off [vendor] clients, it’s also likely to p**s off your potential repeat business clients [ie agents]. Finding ways to encourage vendors to demand pro photography is a good tactic, but upsetting estate agents is not a good idea.

  • Bob,

    It’s not clear to me that people selling their houses are reading the real estate sections of the newspaper. In fact, my clients tell me that they don’t think ANYONE reads it. The problem with marketing to homeowners is the return on investment is low. You aren’t going to get repeat business, there’s no opportunity to build relationships, all you can really do is hope to compete on price. Lots of expense (both money and time) and small return.
    Marketing to RE agents, on the other hand, promises repeat business, lots of referrals, and relationship-building. Much better return for my time.

    As far as diversifying, I think that’s wise. Lately, portraiture accounts for a growing percentage of my monthly revenue. I’d caution against spreading out into areas that aren’t photography, however. Once you spread yourself too thin, you can’t excel at any one thing, in my opinion. Leave the graphic design to the graphic designers, the website development to the web designers, the printing to the printers. They’re good at it, they can devote themselves to it. As the old guy said, “A cobbler should stick to his last!”

  • I’ve noticed a drop in the number of properties I shoot under $1,000,000 but my Los Angeles based real estate photography business has continued to grow over the last three years (and you won’t drag me out of the house for less than $300). I’m looking forward to next year when I actually start to execute my targeted marketing!

    @bob – why not tweak that approach and promote your clients (ie the agents who hire you) to the homeowners?

    @doug – sounds like a great time for you to pick up business but the fact remains that there are fewer jobs available for re photogs during this time for the very reasons you mentioned. It’s a great time for us to develop connections, create more streamlined workflows and figure out ways to better serve our clients when they come back from the break.

    @scott – just say no to weddings, lol!

  • I think marketing to homeowners can work – but like scott says the homeowners are going to read newspapers or such. Might just have drive around either talk homeowner in person or leave post card at property

    It is rather odd thinking, the money spent to get a home ready to sell and be shown, and yet a couple hundred or so for photographs suddenly becomes a budget buster?

  • @Bob- Newspaper advertising is expensive and not targeted. No one reads the real estate section anymore… that’s why the LAtimes dropped their weekly real estate section in Aug of 2008.

    A better way to target sellers is selectively mail post cards to owners of new listings on the market a few postcards a week will get you to exactly the people you want for less money. You can subscribe to a e-mail list of new homes on the market in an area and price range at most large brokers sites.

  • Re. Scott’s comment, I have to wonder a little about website design and photography in certain markets. In the SF Bay area there are at least a few web designer-photographers who seem to be capturing a certain portion of the high-end market. I think this is in part because they offer a certain kind of look that standard RE photo services are not providing, but also because they can offer a package of photography and website. Sure we can go and buy templates for websites, but they mostly are very generic looking. Partnering with a web designer might work, but you would have to be sure that they are reliable and can meet your delivery requirements consistently. So, I am wondering if there is a future for the website designer-photographer model. Personally, I would rather be shooting than spending yet more time in front of a computer. But if that is what it takes….

  • I agree with Doug Scott. I don’t take the holidays off – I work harder. Just as he, I want to keep my name in front of those agents who are getting listings.

    While my market (a ski resort town) is unique, I am finding business is holding up quite well. I could be busier, but I’m pretty much running at capacity right now. I landed a big job from a rental management company a couple of weeks back and it is keeping me busy between real estate shoots for agents. Had to discount the per unit price some, but with 100 units to shoot (and I’m only doing 8 shots per unit) the volume makes up for it.

    Michael

  • Please pardon my ranting in this post, but I see a disaster looming and I need to get this out! I would like to make a few comments regarding what I have seen become of the state of our industry. I have been shooting architecture for 6 years professionally and have done really well as far as the types of assignments I shoot and the money I’ve made. I have been published internationally and have a great reputation amongst my clients. Now, this last year has been particularly rough, as many of you can attest. About 2/3 of my clientele are RE Agents, the other 1/3 comprises of Architects, Developers, RE Management Co’s. etc… I have noticed very major drops in business due to three very major factors. They are: 1) Architects and the people that support them are not designing, or building any new projects. And, since they aren’t bringing in much new business, they aren’t marketing like they used to. 2) RE Agents are scared to spend the money to professionally photograph new listings because the listings stay on the market long past the contract term these agents have with their clients. 3) The influx of individuals, and big Co’s (like the one that advertises at the top of this blogs directory. And you had better check them out, because they are coming to a town near you!), who will shoot an entire house and give a ton of photos for a very nominal fee! (this one bugs me the most because they devalue what it is that we do). In most cases, they provide sub-par imagery at rock-bottom prices just to get the job. Now what I hear from my agents is that “It’s good enough and the price is right”. I actually had one of my biggest clients ask me to do a job for over %75 off my normal rate to match a new Photographer’s pricing! I have been shooting for this client for 4 years! They are now using the other person, because I refused to shoot an entire house for… Hold onto your hats… $40.00!!! Now personally, I wouldn’t get out of bed for that, but I have to tell you, that is who we are competing with. And, I can’t compete with that (The price that is, not the quality. The images were terrible). I flat out told my client to hire them. I refuse to compromise my quality, my integrity and getting paid what I am worth, just so I can keep an account that shows no loyalty. Now, here is the thing that really rubbed salt in the wound. I have an insider that I know who does not like the company and she filled me in that even though the market was down, the Co. had a banner year from volume! They made more money this year than they did in the last 2 years combined. Now as I am sure you all know, now that they know that they can pay someone so cheaply to shoot, they will never go back to paying the rates we charge and so rightfully deserve! I have friends that shoot all types of things from weddings to journalism and they are all experiencing the same phenomenon. I guess we can either join them, or beat them… Any suggestions?

  • Essphoto, well, I don’t think that it matters what any of us thinks we deserve. It is what the client needs (or thinks they need) and is able, though not necessarily willing, to pay. You are very able and, it seems, very experienced. It is insulting that someone like you should be asked to compete with the kind of service you mention. But it just goes to show that a lot of realtors either do not really recognize good photography (even though they have used it sometimes) or good photography has lost some of its usefulness to them. Certainly realtors who do not have the ability to get their clients to price their homes realistically or to stage them adequately are right to be concerned about spending much on photography. And there may be some realtors who are so well established and capable that they don’t need to market themselves much and can get by with poor photography for a lot of very marketable listings. But I would think that still leaves some in the middle: those who are very able but less well established. I would think these people still need to market themselves strongly and will tend to have listings worthy of good photography (or are ambitious to get them), at least in the middle and upper price ranges. Seems like a pretty narrow niche though. I just don’t know where all this is going. However, the Web marches on and continues to grow as a marketing medium. The economy has thrown a big monkey wrench into things, but it is hard for me to imagine that good pfre isn’t going to be valuable in the long run, if we can just stick it out.

  • are the wooden floors really orange like that picture suggest?

  • essphoto, I wouldn’t even be worried about places that charge the meager amounts you are speaking of. Hold your integrity and do not compromise your skill or quality, this is what sets you apart and is your main competitive advantage over these other low quality turn-key based companies.

    Lose these stingy clients you speak of and focus on the higher end/niche part of the market and do what you do best. Do not lower your prices to compete with these other companies because they clearly are not at the same level playing field as you in terms of quality, and if you lower your pricing you may be giving the impression that you are “less-skilled”/cheap or crap quality.

    I say play on the expensive/high end spectrum of the market… this is just my opinion though and i don’t entirely know what kind of a position you are in both financially and business wise…

  • Thanks for sharing, your assessment is right on. In today’s current market you may find a few realtors who are willing to spend the money to showcase their high-end listings but by and large most agents are sitting tight. If I had to depend on my real estate photography business to survive I would be in big trouble. We’re all victims of the economic crisis and it may not improve substantially for some time. My suggestion would be to go after accounts like BuyOwner who hires photographers on 6-mo contracts. Our local regional office recently signed on w/a photog for 6 mos so we’re going to stay on top of this and hopefully throw in a bid next April when the contract expires.

  • It all comes down to being unique so there is not competition. One of the most valuable, and sometimes most challenging, business activities to sink time into.

  • During this time of the year I like to focus on packages instead of individual products. If you’re comfortable shooting photos with your DSLR why not start looking into video? The second largest search engine (after Google) is YouTube so use video to increase your exposure. It might take a few weeks to get the hang of it, but a DSLR slider and jib can really add some production value to your property video tours.

    One common mistake I see a lot of real estate photographers do is use photo slideshows. Not only are these boring and littered with bad music, they don’t add anything to the experience the client can’t achieve by simply looking at the photos one-by-one. Use video to sell dream of owning the property, not the product. If implemented correctly, a package which combines video, photography and web will win over the hard-to-sell agents.

    Another thought — has anyone considered offering their services free or performance based. If agents are not willing to pay out money upfront, why not tie your fees into the closing costs (escrow) and charge a percentage of their commission. Sure, you won’t get paid right away, but you’ll be able to take home a larger paycheck. An agent earning a $20k commission isn’t going to have a problem giving you $800 or $900 off that check once they see results.

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