Whenever I’m not sure what to write about, I just read. That’s one of the big benefits of daily blogging – it forces me to do that.

This morning I stumbled upon the blog of Jed Kolko. Jed is an economist and, up until 2015, he was Chief Economist and VP of Analytics at Trulia.

His most recent post argues – naturally with lots of data and charts – that for all of our talk of (re)urbanization, it’s actually a specific subset of the population that is far more likely to be have urbanized between 2000 and 2014: the young, rich, childless, and white. (Note: His post is talking specifically about U.S. cities.) 

Below are a few of his charts. 

In all cases, the x-axis represents % change in urban living between 2000 and 2014. All of the data is from Public Use Microdata Samples (PUMS) - 2000 decennial Census and from the 2014 one-year American Community Survey (ACS).

Here is age:

Household income:

Education and children:

And here is race/ethnicity:

This post originally appeared on the Rotman Morning & Evening MBA blog. 

As a recent graduate of Rotman’s Morning MBA program (and presumably because somebody over there reads Architect This City), I was asked to write a guest post for their MBA blog. More specifically, I was asked to share my thoughts on the real estate industry and on my time at Rotman. And since I haven’t really done a post like this before, I thought it would be worthwhile to do.

But before I begin, I think it’s important to explain a bit about my background and my motivations for doing an MBA in the first place. Before going to Rotman, my first master’s degree was in architecture and real estate from the University of Pennsylvania. Basically it was a Master of Architecture combined with their MBA real estate concentration. So it included everything from real estate finance to real estate development.

Having already done this 3-year program, there were a couple of things I wanted out of an MBA program. First of all, I wasn’t prepared to go full-time. Five years out of the workforce was simply too high of an opportunity cost for me and so part-time was all I considered. I also only applied to Rotman because I didn’t want to waste any time traveling outside of the city (or to other parts of the city). I also saw Rotman as a rising star and one of, if not the, best option in Canada.

At the same time, I didn’t give much thought to the real estate curriculum being offered even though I fully planned to stay working in the real estate industry. I felt like I already had that sort of formal training and so, unlike some of my classmates who were looking to switch into real estate, I was after something else. I ended up majoring in Innovation & Entrepreneurship.

What I was trying to do was really round out my skillset and fill in some of the missing holes: accounting, marketing, and so on. But even more importantly, I had drunk the kool-aid around Rotman’s focus on integrative thinking (renamed “business problem solving”) and “design thinking”. And since there will always be a part of me that thinks of itself as a designer, it seemed like the perfect program for me. 

Because at the end of the day, it’s not that hard to learn how to create a real estate development pro forma or calculate your expected exit cap rate on some piece of real estate. That stuff is all fairly mechanical. It might seem quite mythical when you don’t know how to do it, but once you do, you quickly realize that a financial model is only as good as the assumptions you put in. As we’re told in school, garbage in = garbage out.

The real value gets created in the assumptions. It’s created in the way you think about the market, your product, and your customers. And a lot of the time, the most value is created when you know or believe something that nobody else believes to be true. If you’re a lemming, you’re going to get lemming like returns and outcomes. So in a lot of ways, I went to Rotman to help me think better and think differently.

In some industries, resting on your laurels can kill you in a relatively short period of time. See Blackberry. Real estate, on the other hand, is generally a bit slower moving. But that doesn’t mean that change doesn’t happen and that there isn’t room for loads of innovation.

Just look at the Toronto of today versus the Toronto of 10-15 years ago. We’ve transformed ourselves into a city of high-rises where more and more people now want to live in the core of the city. This has brought commercial landlords back to the city center so that employers have downtown office space to attract the best human capital (see South Core) and it’s brought suburban retailers into the core to sell to these same urbanites. We’re seeing a complete reversal of the trends experienced with the last generation.

Amidst all of this, I’ve been noticing a growing awareness and passion around cities. My blog Architect This City started as a forum for architects, planners, and developers, but it has grown into a community of thousands of people who simply love cities. They’re passionate about everything from architecture to grade-separated bike lanes (as geeky as that probably sounds).

So I think that it’s not only the real estate market that’s changing, but also the professions involved with it. I’ve written a lot about the future of the architecture profession because I think we’re starting to see the emergence of new business models. Architects are becoming developers and developers are starting to become much more heavily involved in the shaping of the communities in which they build. Which is why in many ways, I think of my self as a city builder more than anything else.

Finally, to make matters even more complicated, technology is starting to have a huge impact on the business. Zillow.com just bought Trulia.com for $3.5 billion to form a portal that will now serve around ¼ of the online US residential market. And Opendoor.com is getting ready to launch a product that seems entirely poised to disrupt the way homes are bought and sold in America.

So what I’m getting at is that there’s absolutely no guarantee that the way we used to do something, is the way we’re going to continue doing it. In fact, I operate under the assumption that everything can and will be changed by somebody at some point. And if this is the way you approach things, then it should become abundantly clear to you that being able think critically is going to be one of your most important assets.

When I was just starting at Rotman, I met for lunch with an upper year classmate who told me that one of the best things he’s taken away from the program is the ability to think about the way he thinks. That may sound silly to some, but in our uncertain world, it’s actually a great skill to have.

Today it was announced that Zillow.com will be buying Trulia.com for $3.5 billion in a stock-for-stock transaction. Based on share of web visits, the biggest real estate website in the US has just acquired the 2nd biggest.

Both companies make the bulk of their money through advertising sales to real estate professionals (i.e. agents and brokers). But what was interesting to read in their press release is that, even with this merger, the combined revenue of both Zillow and Trulia still only represents about 4% of the estimated $12 billion that US real estate professionals spend on marketing each year. 

Zillow says it’s because the real estate industry hasn’t fully made the switch to online and mobile – and thus it represents a huge market opportunity for them. And from my experience I would say that this is likely the case. But it could also be because the real estate community is putting their marketing dollars elsewhere online. 

Whatever the case may be, Zillow.com (and its portfolio of companies) is now firmly positioned as the largest real estate website in the US. But even still, Zillow.com has never felt fully “net native” to me. It has never felt as if it were specifically built for the internet and that it’s only possible because of the internet. Instead, it feels like an offline model ported over to online. And the two are quite different.

The reason I feel this way is because there’s an inherent tension to the way the online residential real estate market works today. Virtually every lead generation tool (that agents use) is intended to funnel buyers and sellers to them. That’s why so many real estate websites have sucked for so long. Because the goal wasn’t to keep you locked into a website, it was to get you to connect, in person, with an agent.

Zillow and Trulia started to break with that tradition by offering a lot more information online. Before they came along, it was a lot harder for real estate consumers to do their own research. But at the end of the day, Zillow makes money when it’s an effective sales funnel for agents. And since that’s always been the way the market has worked, it doesn’t feel net native to me.

If my gut is right, then it means there’s still lots of opportunities in this space.

Whenever I’m not sure what to write about, I just read. That’s one of the big benefits of daily blogging – it forces me to do that.

This morning I stumbled upon the blog of Jed Kolko. Jed is an economist and, up until 2015, he was Chief Economist and VP of Analytics at Trulia.

His most recent post argues – naturally with lots of data and charts – that for all of our talk of (re)urbanization, it’s actually a specific subset of the population that is far more likely to be have urbanized between 2000 and 2014: the young, rich, childless, and white. (Note: His post is talking specifically about U.S. cities.) 

Below are a few of his charts. 

In all cases, the x-axis represents % change in urban living between 2000 and 2014. All of the data is from Public Use Microdata Samples (PUMS) - 2000 decennial Census and from the 2014 one-year American Community Survey (ACS).

Here is age:

Household income:

Education and children:

And here is race/ethnicity:

This post originally appeared on the Rotman Morning & Evening MBA blog. 

As a recent graduate of Rotman’s Morning MBA program (and presumably because somebody over there reads Architect This City), I was asked to write a guest post for their MBA blog. More specifically, I was asked to share my thoughts on the real estate industry and on my time at Rotman. And since I haven’t really done a post like this before, I thought it would be worthwhile to do.

But before I begin, I think it’s important to explain a bit about my background and my motivations for doing an MBA in the first place. Before going to Rotman, my first master’s degree was in architecture and real estate from the University of Pennsylvania. Basically it was a Master of Architecture combined with their MBA real estate concentration. So it included everything from real estate finance to real estate development.

Having already done this 3-year program, there were a couple of things I wanted out of an MBA program. First of all, I wasn’t prepared to go full-time. Five years out of the workforce was simply too high of an opportunity cost for me and so part-time was all I considered. I also only applied to Rotman because I didn’t want to waste any time traveling outside of the city (or to other parts of the city). I also saw Rotman as a rising star and one of, if not the, best option in Canada.

At the same time, I didn’t give much thought to the real estate curriculum being offered even though I fully planned to stay working in the real estate industry. I felt like I already had that sort of formal training and so, unlike some of my classmates who were looking to switch into real estate, I was after something else. I ended up majoring in Innovation & Entrepreneurship.

What I was trying to do was really round out my skillset and fill in some of the missing holes: accounting, marketing, and so on. But even more importantly, I had drunk the kool-aid around Rotman’s focus on integrative thinking (renamed “business problem solving”) and “design thinking”. And since there will always be a part of me that thinks of itself as a designer, it seemed like the perfect program for me. 

Because at the end of the day, it’s not that hard to learn how to create a real estate development pro forma or calculate your expected exit cap rate on some piece of real estate. That stuff is all fairly mechanical. It might seem quite mythical when you don’t know how to do it, but once you do, you quickly realize that a financial model is only as good as the assumptions you put in. As we’re told in school, garbage in = garbage out.

The real value gets created in the assumptions. It’s created in the way you think about the market, your product, and your customers. And a lot of the time, the most value is created when you know or believe something that nobody else believes to be true. If you’re a lemming, you’re going to get lemming like returns and outcomes. So in a lot of ways, I went to Rotman to help me think better and think differently.

In some industries, resting on your laurels can kill you in a relatively short period of time. See Blackberry. Real estate, on the other hand, is generally a bit slower moving. But that doesn’t mean that change doesn’t happen and that there isn’t room for loads of innovation.

Just look at the Toronto of today versus the Toronto of 10-15 years ago. We’ve transformed ourselves into a city of high-rises where more and more people now want to live in the core of the city. This has brought commercial landlords back to the city center so that employers have downtown office space to attract the best human capital (see South Core) and it’s brought suburban retailers into the core to sell to these same urbanites. We’re seeing a complete reversal of the trends experienced with the last generation.

Amidst all of this, I’ve been noticing a growing awareness and passion around cities. My blog Architect This City started as a forum for architects, planners, and developers, but it has grown into a community of thousands of people who simply love cities. They’re passionate about everything from architecture to grade-separated bike lanes (as geeky as that probably sounds).

So I think that it’s not only the real estate market that’s changing, but also the professions involved with it. I’ve written a lot about the future of the architecture profession because I think we’re starting to see the emergence of new business models. Architects are becoming developers and developers are starting to become much more heavily involved in the shaping of the communities in which they build. Which is why in many ways, I think of my self as a city builder more than anything else.

Finally, to make matters even more complicated, technology is starting to have a huge impact on the business. Zillow.com just bought Trulia.com for $3.5 billion to form a portal that will now serve around ¼ of the online US residential market. And Opendoor.com is getting ready to launch a product that seems entirely poised to disrupt the way homes are bought and sold in America.

So what I’m getting at is that there’s absolutely no guarantee that the way we used to do something, is the way we’re going to continue doing it. In fact, I operate under the assumption that everything can and will be changed by somebody at some point. And if this is the way you approach things, then it should become abundantly clear to you that being able think critically is going to be one of your most important assets.

When I was just starting at Rotman, I met for lunch with an upper year classmate who told me that one of the best things he’s taken away from the program is the ability to think about the way he thinks. That may sound silly to some, but in our uncertain world, it’s actually a great skill to have.

Today it was announced that Zillow.com will be buying Trulia.com for $3.5 billion in a stock-for-stock transaction. Based on share of web visits, the biggest real estate website in the US has just acquired the 2nd biggest.

Both companies make the bulk of their money through advertising sales to real estate professionals (i.e. agents and brokers). But what was interesting to read in their press release is that, even with this merger, the combined revenue of both Zillow and Trulia still only represents about 4% of the estimated $12 billion that US real estate professionals spend on marketing each year. 

Zillow says it’s because the real estate industry hasn’t fully made the switch to online and mobile – and thus it represents a huge market opportunity for them. And from my experience I would say that this is likely the case. But it could also be because the real estate community is putting their marketing dollars elsewhere online. 

Whatever the case may be, Zillow.com (and its portfolio of companies) is now firmly positioned as the largest real estate website in the US. But even still, Zillow.com has never felt fully “net native” to me. It has never felt as if it were specifically built for the internet and that it’s only possible because of the internet. Instead, it feels like an offline model ported over to online. And the two are quite different.

The reason I feel this way is because there’s an inherent tension to the way the online residential real estate market works today. Virtually every lead generation tool (that agents use) is intended to funnel buyers and sellers to them. That’s why so many real estate websites have sucked for so long. Because the goal wasn’t to keep you locked into a website, it was to get you to connect, in person, with an agent.

Zillow and Trulia started to break with that tradition by offering a lot more information online. Before they came along, it was a lot harder for real estate consumers to do their own research. But at the end of the day, Zillow makes money when it’s an effective sales funnel for agents. And since that’s always been the way the market has worked, it doesn’t feel net native to me.

If my gut is right, then it means there’s still lots of opportunities in this space.