Most sectors have a spunky privately held company or two, kicking and fighting to make a difference, but logic dictates that public companies are the real stars. They've got the easy access to capital, rather than panhandling to venture capitalists when the well runs dry. They've also got stock options with tangible value to recruit the top talents. They're the names -- and ticker symbols -- we know.

But all those rules get turned topsy-turvy in the world of online real estate. It's no coincidence that stand-alone Web-based real estate plays like HouseValues (NASDAQ:SOLD), Move (NASDAQ:MOVE), and ZipRealty (NASDAQ:ZIPR) are all trading in the single digits. One can only wonder how much higher IAC/InterActiveCorp (NASDAQ:IACI) would be trading if it weren't weighed down by its LendingTree and RealEstate.com subsidiaries.

As it turns out, the true darlings are the privately held players in this niche -- companies like Zillow, Trulia, and Redfin. Zillow's launch last year made the original HouseValues model go the way of vinyl records. Redfin became the country's first online brokerage for residential real estate when it launched in Seattle a couple of years ago.

This morning, HotPads.com joins them in trying to reinvent the housing wheel. The site launched two years ago as a provider of map-based rental listings. It eventually tacked on a search engine for sale listings, too. Now that it has 80,000 rental properties to accompany 250,000 homes for sale, it's launching a "Buy vs. Rent" portal, allowing aspiring movers to weigh the options available, based on how much they can afford each month. Plenty of sites do that, but HotPads uses dynamic metrics-based mapping to narrow down the choices on the fly.

Appealing to both buyers and sellers makes sense. Borrowers are now stingier than landlords, and buyers may want to see residential real estate prices settle before plunking down a deposit on what might be a depreciating asset in the near term.

HotPads' features aren't a guaranteed elixir, of course. Move is living proof. The company runs Realtor.com, but it's also got its paws all over moving services and apartment listings. Last week it inked a content distribution deal with Microsoft's (NASDAQ:MSFT) MSN. However, sloppy financials find the shares hugging lows last seen during summer 2005.

What will the future bring? As long as the sector stays in the doldrums, privately held innovators aren't likely to go public. Even a star like Zillow, a product of the proven founder of Expedia (NASDAQ:EXPE) and an easy sell to venture capitalists, would be nuts to file for its IPO until the publicly traded penny stocks begin to build their way out of the rubble.

Just like way too many homeowners, the industry is stuck where it's living now, despite its best intentions for a little interior decorating.

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Microsoft is an Inside Value recommendation. HouseValues is a former Hidden Gems newsletter selection. The Fool's newsletters are a perpetual Open House, offering free 30-day trial subscriptions.

Longtime Fool contributor Rick Munarriz isn't interested in selling his home, even if the once-red-hot South Florida market is cooling off quickly. He does not own shares in any of the stocks mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a rent-controlled disclosure policy.