Customer Reviews -- Adding Spice to a Bland Housing Market

Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):

Home-Price Rises Slow the Most In Over 30 Years and Snippy Things Folks Say About Your Home Are Now Also Online

• Summary: Home prices rose 1.17% in Q2, compared to 3.65% in Q2 2005; the drop was the steepest since 1975. Analysts attribute the slowdown to higher interest rates, rising inventories, and a decline in real-estate speculation. Price increases will continue to be weak. A related story: Operators of real-estate Web sites ZipRealty Inc. (ZIPR) and Reply Inc. have begun encouraging customers to write reviews of homes for sale. Early indications are that the reviews can be harsh but honest, threatening to detract from the gushing language used in agents' marketing materials, this in a time when a homes-glut is already allowing buyers to take their time, dwell on defects, and demand price cuts. Operators of the sites say the reviews provide valuable information for home shoppers. The phenomenon also affects rental properties: Apartment Ratings Inc. says it has about 425,000 apartment ratings and reviews. Yahoo! Inc. (YHOO) is encouraging users to rate apartment complexes, as well as real-estate agents. Reviews are screened for racial discrimination, inappropriate content, phone numbers or advertisements, but not for whether reviewers' descriptions are accurate.
• Comment on related stocks/ETFs: The housing/real-estate markets have been the economy's weak leg over the past year; some analysts insist they will eventually drag the stock market down with them. The major brokerage firms seem to be displeased with this recent development. Another possible angle is that anything that stirs controversy and catches people's interest can only benefit an otherwise flat marketplace.