Millennials-oriented home-buying app Casamatic rebuilds model to become tool for real estate agents
Algorithm creates ‘an eHarmony for homes'
Liz Engel, WCPO contributor
7:00 AM, Sep 7, 2016
10:40 AM, Sep 7, 2016
CINCINNATI -- Rachel Bauer wouldn't stand for an ugly house. And the neighborhood? Schools might be moot, but it had to have character. Thus the struggle of today's millennial homebuyer.
Bauer, 29, is among a demographic -- those ages 19-35 -- considered the largest and fastest-growing segment of property purchasers nationwide. And in Cincinnati, that's no exception.
There are more millennial buyers, for example, than younger and older boomers combined. Realtors, consequently, are just trying to keep up.
Luckily, there's an app for that.
Casamatic is a locally based tech startup that aims to change how young people buy real estate. But the company is shifting gears after a year matching millennial users with properties in cities like Cincinnati, Chicago and Columbus.
It's now a real estate agent-facing tool, instead.
While the business is maintaining its inaugural concept -- a signature algorithm formulated through a quiz that helps pinpoint what buyers want: their work commute, proximity to restaurants and quality of schools -- it's now only accessible through a real estate agent. It's a change Casamatic's founders say adds value. It better monetizes the product but also makes it more powerful and accurate, with a wider array of listings to boot.
An agent now pays for a monthly contract to be on the Casamatic site, which is branded with their info, versus waiting for leads when a buyer simply clicks through to a home he’d like to see.
"The response has been extremely positive; our metrics are great. But we found the business model -- the way we were generating revenue -- didn’t make a lot of sense," co-founder Alex Bowman said. "A lot of people who were using Casamatic already had real estate agents outside Casamatic or at least knew of one. And we had this request over and over again from agents and brokers to run a white-label version, basically taking the Casamatic branding off and putting theirs on it instead. We realized it actually make a lot of sense."
Casamatic rolled out the change in recent weeks and is jumping straight into the mix with an upcoming afternoon panel event, "How to work with millennial home buyers," exclusively targeting real estate agents and brokers.
A better way to buy
Alex Bowman and Chris Ridenour started Casamatic in December 2014 and launched their idea publicly last August following stints at OCEAN, the Crossroads Church-based accelerator, and The Brandery in Over-the-Rhine. Their office is housed at the 84.51 Center in Downtown.
Both Bowman and Ridenour had bad house-hunting experiences – hence their passion for the business. While Bowman ultimately landed in Norwood, and Ridenour in Bellevue, the homes they looked at along the way just weren't up to par. There had to be, they said, a better way.
In the beginning, they interviewed dozens of other millennials -- who seemed to have similar stories. From there, they developed an algorithm to better match buyers to neighborhoods.
"Like an eHarmony for homes," Bowman said.
While on the surface Casamatic looked a lot like other real estate sites, like Zillow and Trulia, it honed in less on specific neighborhoods and more on the surrounding attributes: activities, hobbies, people and more.
"There were definitely a lot of really strong similarities about what people wanted," Bowman said. "Ultimately, most everyone wanted to be within a certain distance from work, near friends and family, near things that they like to do. They wanted a certain architecture style. The right amount of outdoor space."
Bowman said millennials now represent the largest and fastest-growing segment of homebuyers, about 35 percent. But there's a gap, Bowman said, considering the median age of a Realtor is 58.
"There's a wide array of (missing links), but we don’t believe the real estate market is built to provide an awesome experience for those homebuyers," Bowman said. "Most agents, for example, work with this incredible tool, the MLS, multiple listing service, which essentially has every single listing that's on the market at a given time.
"But the way that looks to a millennial buyer, it doesn't work. It doesn't look right, for example, on a smartphone, but that's where most are conducting their search. We found out that 70-75 percent of our traffic was coming from the iPhone, and that was before we launched our app. It's pretty unique to this generation, I think, and goes to show it's important for agents and home-search tools to be mobile-friendly."
What buyers want
Since Casamatic's launch, it has compiled tons of interesting stats.
In Cincinnati, most Casamatic users -- 50.6 percent -- want to live in a small suburb versus a large one (19.6 percent) or the city (17.1 percent). The average desired commute time is 24 minutes (or less). A whopping 95 percent drive to work versus walking or relying on public transit.
Only 40 percent said highly rated schools are important. They want to live closer to nightlife (65 percent), arts (40 percent) and sporting events (38 percent). Forty-eight percent prefer to have their favorite brewery nearby.
As far as home size, Cincinnati users are looking for two or three bedrooms and at least one-and-a-half bathrooms. The average maximum budget tops $272,000.
For Bauer, the 29-year-old buyer, aesthetics, yard size and a neighborhood on the upswing were also key. She and Kelsey Pytlik, 29, were among Casamatic's first users.
The fellow 2015 Brandery grads and co-founders of Gild Collective "really had no interest in owning homes," Bauer said, and only signed up for Casamatic's emails to offer feedback.
They, however, found themselves pulled in. One day, Pytlik, for example, saw a listing she liked, so she hooked up with a Realtor via Casamatic and went to see it the next day.
"The big trigger for me, in addition to those emails, because we were starting a business, Downtown rent was not really affordable for me anymore," she said. “It took me a little while to figure out exactly what I wanted. I didn't really know. But somewhere where I could walk to get a sandwich. Ideally, there would be an ice cream place nearby. I also didn't want to do work on a house -- so, recently renovated and the right size for my life."
While that deal ultimately fell through, the two closed on respective purchases within weeks of each other this winter -- Bauer in Northside, Pytlik in East Walnut Hills.
"We wanted different things to do in a neighborhood," Bauer said. "It was hard to explain to my parents, 'I don't want a yard.' (The process) was way more cultural than anything else: What is the feel of the neighborhood? How diverse is it?"
Pytlik and Bauer both said the MLS listing didn't work for them. The new Casamatic tool is all automated -- an agent adds his or her client to the dashboard, the buyer gets an invite and the experience speaks for itself.
"Our company is a creative company, and I'm the creative director … so I expect a good user experience, a cool logo, a story I can get excited for," Bauer said. "We expect this level of service that offers a very high-level connection but is also very digital.
"Casamatic was a great product because it's very personalized and easy to use, and a Realtor needs to be that, too," she said. "I feel like all of the worst things they say about millennials are definitely true -- especially during the home-buying process. Mine balanced treating me like an adult, which I am, and like a child, which I needed to be as a first-time buyer."
As far as the next step, Casamatic wants to work with all agents in the region -- and beyond, Bowman said. It's a crowded market, however, and he and Ridenour are still figuring out the best way to position themselves. The company is offering a $50 referral reward to get more Realtors on board. While they had previously expanded into seven cities across the country, Casamatic has now pulled back to just one, Cincinnati, although Bowman hopes to bring back certain markets -- and add others -- before the end of the year.
"The new model unlocks cities we couldn't necessarily get in easily before," he said.
What: Upcoming panel event, featuring a handful of millennial buyers as panelists, Pytlik and Bauer among them
When: Noon-1 p.m., Sept. 14
Where: OCEAN at 3450 Madison Road
Casamatic aims to do more lunch-and-learns with agents in the future. While exact topics might very, the focus on millennials as homebuyers will remain.
"That's what we're all passionate about," Bowman said. "We want to make sure they're getting an awesome experience using our technology -- now available through the real estate agents."