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Category: Zillow.com (page 2 of 13)

July 15, 2011

Regarding the Zillow.com IPO: “Since when is a seven year old company with really no large scale growth prospects that has lost money every single year on revenue less than $45 million/year worth half a billion dollars? Am I missing something?”

by

Suburban Phoenix Real Estate Broker

Author website

The question comes from a comment to a post at Seattle-based start-up blog, GeekWire. The news? Zillow.com is bumping the per-share price on its forthcoming IPO to as high as $18, up from the $12-$14 range it started with when the public offering was announced.

I like that question, because it parallels one of my own: What, precisely, can Zillow hope to do — other than provide big paydays for its VCs and founders — with $71 million in new funding? Which parts of the site will require that much build-out?

My take: The web-tech IPO craze that’s going on right now is just the next phase in the rape-the-rubes strategy Wall Street has pursued since internet start-ups came on the scene in the late ’90s. There is plenty of money to be made churning the stock of “businesses” that, in the end, all amount to MySpace.com — all hype, no actual value.

What’s the name for that phenomenon…? Oh, yes — a bubble.

The good news: Cynthia Pang Nowak, formerly Redfin.com’s queen-bee PR geek, is now signed on with Zillow. While she may be both the smartest and most breathtakingly beautiful woman on the Puget Sound, it remains to be seen if she can answer the BloodhoundBlog question: What would David Gibbons do?

Meanwhile, GeekWire.com deserves your daily attention. Run by Todd Bishop and John Cook, formerly the start-up reporter for the Seattle Post-Intelligencer and a long-time friend of BloodhoundBlog, it’s kind of like TechCruch in the rain — but without the bluster and hyperbole. The daily email digest is quick way to keep up with the wired side of our world.

But: Am I all wet? Does Zillow.com look like a buy to you at $18? Can it go to $36? To $180? To $0.01? I like the people who work there, and the founders have been very good to us from the beginning. But I’ve never seen the value of Zillow.com, except as an advertising play, and I still don’t. As with the comment quoted above, am I missing something?

May 9, 2011

Brett Arends from the Wall Street Journal on Zillow’s morning gloom report: “All this bearish news makes me bullish.”

by

Suburban Phoenix Real Estate Broker

Author website

Our friends at Zillow.com have figured out the secret to getting news coverage: Bad news:

Home values in the United States fell faster in the first quarter of 2011 than they have in any quarter since 2008, when the housing market experienced its worst performance, according to Zillow’s first quarter Real Estate Market Reports(1). The Zillow Home Value Index(2) fell 3 percent from the fourth quarter of 2010 to the first quarter of 2011, and declined 8.2 percent year-over-year to $169,600. Home values have fallen 29.5 percent since they peaked in June 2006.

Negative equity reached a new high mark with 28.4 percent of single-family homeowners with mortgages underwater at the end of the first quarter, up from 27 percent in the fourth quarter of 2010. A homeowner is in negative equity when they owe more on their mortgage than their home is worth.

Meanwhile, foreclosures(3) rose throughout the first quarter as banks unfroze moratoriums and allowed foreclosures to resume. Foreclosures had fallen in late 2010 due to the slew of moratoriums brought about by the “robo-signing” controversy. In March, one out of every 1,000 homes in the country was lost to foreclosure.

With substantial home value declines, as well as increasing negative equity and foreclosures, Zillow forecasts show it is unlikely that home values will reach a bottom in 2011. First quarter data has prompted Zillow to revise its forecast, now predicting a bottom in 2012, at the earliest.

“Home value declines are currently equal to those we experienced during the darkest days of the housing recession. With accelerating declines during the first quarter, it is unreasonable to expect home values to return to stability by the end of 2011,” said Zillow Chief Economist Dr. Stan Humphries. “We did expect substantial payback from the homebuyer tax credits, which buoyed the housing market last year, but underlying demand post-tax credit, as well as rising foreclosures and high negative equity rates, make it almost certain that we won’t see a bottom in home values until 2012 or later.”

My own take is that we are at or near the knee in the curve: While supplies of fire-sale-priced homes Read more

December 3, 2010

Zillow says, “If you will send us your clients as web traffic, we’ll be pleased to sell them back to you, again and again, from now on.”

by

Suburban Phoenix Real Estate Broker

Author website

Q: What do you do when your massive Realty.bot web site, target-marketed to equity-rich home-sellers, finds itself in a real estate market where most sellers are upside down and do not give a rat’s ass what their homes might sell for?

A: Punt.

This is an eyeball play, up front, just pure traffic-baiting. But the genius of it is that it turns into FUD for the agents in the long run: A million necks, one noose.

These sites are just noise, by now, just more “media” — uninformed opinions from people who make their living doing something other than selling real estate. Delivering your clients to them strikes me as a poor idea.

July 23, 2010

Where Would David Gibbons Go?

by

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Home, of course.

Anybody who followed his World Cup trip to South Africa saw the glow on his face, in his Facebook pictures, and the longing in his heart, on his Facebook status updates.  Social media are interesting platforms.  They have the power to bring you much closer to people you’ve met or allow you to learn more about those you’ve yet to meet.   I “met” David on Active Rain, was drawn to the Zillow brand because of him (and Drew Meyers), and am grateful to him for supporting  the inaugural real estate social media marketing conference.

I’ve battled with, yelled at, drank beer with, collaborated with, and tried to support David Gibbons for a number of reasons but, in the end, it’s all about mentschkeit.  David G from Zillow is the type of guy you want on your team….and you want to play on his team, too.

I”m not going to cry about his departure because between  Skype and Facebook, Seattle is not much farther than Jo-Berg.  My goal today is to remind you of the single most important lesson we learned, from David G:  What Would David Gibbons Do?

The WWDGD lesson is to represent yourself  positively online and always sell your brand.  The trick is in the delivery.  David G. never skulked and pounced, like a sleazy corporate pitchman.  David G. was always part of the conversation, offering ideas, debating, and developing best practices.  If there was ever a spokesman for the ” RE.net“, Davig G would be that guy.  Why?  He lives in our world.

So I’ll just say “Hamba Kahle” to David G.  I’d say I’ll miss him but I doubt I’ll notice he’s moved.

December 21, 2009

Who’s Afraid of Redfin.com?

by

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Bob Haywood, an Owasso, OK real estate agent makes a case for why you should be aware of Redfin.com.  Bob articulates, from behind the cloaked wall on Active Rain, why Redfin.com is the REAL agent of change in the real estate industry.  Read what Bob has to say:

You should pay as much or more attention to Redfin and what they are doing than you do to Zillow. Am I saying we should ignore Zillow?  No!  But the group who has the potential to really change real estate is Redfin, not Zillow.  And here’s why…Zillow is just an information source.  So they give lots of information.  Yippee.  The information real estate vault is now open to the public.  Zillow is just one of many players in the information delivery game.  And guess what?  Zillow exists at the 20,000 foot level.  Their information is not very accurate.  You and I exist on the ground level.  We know our local real estate market in ways that Zillow will never know.  We know what actually sold.  What it sold for.  What it is actually worth and often, what is about to come onto the market.

Fear Zillow.com?  “Not so much”, says Bob and I agree with him.  Zillow introduced the  Zillow Mortgage Marketplace and it has had no impact on my business these past 18 months.  Only one consumer has referenced Zillow’s mortgage rate quotes in their negotiation with me.   That consumer did speak a lot about the Zestimate and its inaccuracy; that inaccuracy actually helped me in the negotiation with the consumer because it threw a shadow of doubt upon the accuracy of the mortgage quotes they offer.

And that is why you should watch Redfin. Redfin is a ground level company.  They are attempting to take the information and link it to agents on the ground.  That’s what makes them dangerous.  If they ever get their feet under them and decide that they actually want to be a player nationwide, they could just change the way real estate is bought and sold.  And if they do, they could end up owning (many of) us.  Already, Read more

July 6, 2009

Why Web 2.0 Still Hasn’t Mastered the Real Estate Mantra: LOCATION, LOCATION, LOCATION

by

Realtor, Rabble-Rouser

Author website

So Goggle thinks it’s going to win the real estate search game.  As far as I’m concerned, there is no more meaningless a result in an online property search than a red pin designating the location of a property on a map.  Take the map above in the example – a snapshot of the the greater New York City area with little red dots designating search results.  New York’s a big city with alot of little neighborhoods.  Help me understand how this solution is any better than any of the others? How has Google upped the ante in providing a better solution?

They haven’t.

What I find interesting about the online search game is how many players fail to understand what makes a particular property unique – desirable – a one of a kind.  How does a little red dot convey the weighty significance of LOCATION, LOCATION, LOCATION?  I just read Joe Burslem’s post over at FOREM, regarding how Google is now getting serious about real estate.

Should Zillow and Trulia be worried?  Not if they view search as a value added activity.  SEO juice isn’t necessarily the fuel that runs an effective or valuable search.  The content around the search is key.  What makes a location important?  When consumers seek a home – not a house – what evokes the emotional response?  A view?  The possibility of walking to a farmer’s market on Sunday, while passing a Starbucks?

A street view is a “window” into a location, but it doesn’t define it’s personality.  Location has an identity.  Zillow has already done the homework to identify the boundaries to neighborhoods.  Perhaps a valuable next step may be to better identify a neighborhood’s identity – its personality – or maybe link the characteristics of a location to the attributes of a property.

If a search result can personify a property’s location, consistent with how a consumer lives, the red pin comes alive.  Search is meaningful.

Google – you’ve got your work cut out for you.

December 12, 2008

Is Web Technology Squashing the Little Guy in Real Estate?

by

CEO, Redfin.com

Author website

About once a week, someone asks Redfin who built our real estate search site (sometimes they don’t ask, they just take). Since we built our site on our own, we can’t recommend a development partner, but we can offer advice to other brokers building MLS-powered sites.

And our first suggestion would be to bring your wallet. If you include all the employee salaries, benefits, hardware, online services, data costs and hosting costs, Redfin will probably spend $4+ million on research and development in 2009.

Is Technology Tilting the Playing Field Toward Large Brokers?

Is Technology Tilting the Playing Field Toward Large Brokers?

That may sound like an imposing number but we have costs you can avoid. We spend at least $1 million on commerce tools for tracking offers and listings, so we can give customers the same 24-hour web support you expect from a bank, limiting the administrative burdens on our agents. A traditional brokerage doesn’t have to invest in this area.

We probably spend another $1 million making mistakes you could easily duck by following us at a safe distance of, say, six months. We try to avoid mistakes, but a mistake is often just a good decision outpaced by circumstances.

For example, when we had no money — scratch that, (thanks David Selinger) when no mapping technology existed that supported user-controlled panning and satellite imagery — it made sense to build our own map. Later, Virtual Earth was the best choice because Google was slow to draw hundreds of property outlines on its map. Now the best choice for us is Google Maps because we figured out how to outline all the properties at once. We just switched to GMaps today, and now it’s on the front page of TechMeme.

I think we’re the only folks in real estate who have used Virtual Earth, Google Maps and a proprietary map, so if you have questions on the relative merits of each service, please just drop us a line.

That leaves the cost at around a few million dollars per year to build a real estate search site with national scale, which is still too expensive. While hardware costs decrease every year, Read more

October 18, 2008

Tom Johnson to the Realty.bots: All that free stuff you gave us would have been a bargain at twice the price!

by

Suburban Phoenix Real Estate Broker

Author website

In a comment at the Future of Real Estate Marketing, our friend Tom Johnson delivers a fatherly lecture on the facts of life:

This is the free market and unintended consequences at work. There is a reason that the commission rates have been stuck for years where they are. The contingency nature of the listing relationship drives the business. The consumer is unwilling to pay for service that does not result in a sale.

Pouring VC cash into the real estate space has improved technology. The RE.net came on the scene with plans to disintermediate the real estate brokers by tapping into the commission honey pot. This put pressure on commissions forcing brokers to cut costs, so the RE.net responded by giving the services away for free. Free outbound doesn’t earn a return inbound. The cash burn continues, brokers continue to cut costs by not buying RE.net products causing more cash burn and layoffs.

As transactions slow, the commission honeypot shrinks. Brokers will cut cost and redouble efforts to get salable listings, by using the free tools that are provided by RE.net.

It seems to me that the RE.net did indeed disintermediate, but it was not the RE brokers that were disintermediated, but the print media. So here we are, marketing listings for free on the web. Because of the fractured nature of the RE space, it takes unimaginable amounts of time to manage all that free stuff, so we are where we were. The consumer is still unwilling to pay cash for RE services on a non-contingency basis. So, we tweet and blog and facespace our listings, to get a transaction started, and then the real work begins-getting the contract to the closing table. That is the part of this industry that the RE.net sort of forgot about and the cash burn continues…

Indeed. We have seen the future of real estate marketing — and it is us.*

As might be obvious, I don’t have a lot of time for other RE.net sites right now, but it is worthwhile to note that tFoREM has four whole posts this week, a huge number by comparison to recent Read more

October 1, 2008

Zillow.com creates a directory of real estate agents who can’t sell

by

Suburban Phoenix Real Estate Broker

Author website

Okay here’s the good news: You have another opportunity to garner a do-follow link from Zillow.com.

And here’s the bad news: For that link to do you any good, your best bet is to be a really bad listing agent. The more listings you can accumulate on Zillow.com — which implies listings that don’t sell — the higher your ranking among your peers.

Yikes!

Or: Too frolicking stoopid…

Zillow’s Professional Directory is new as of this night, so — who knows? — maybe it will get better. In the neighborhoods we understand, it’s an exceptionally valuable glimpse into the world of lister dysfunction: Who can’t sell how much real estate how slowly? If you want to know for sure who cannot sell the greatest quantity of real properties over the longest spans of time, Zillow.com has the answer.

It gets worse: The “Top Zillow All-Stars” are, for the most part, bubbleheads. Everything is measured by contributions, where what Einstein does and a cat-box deposit are equally “contributions” — equally additions to Zillow.com’s great big cat-box of crap.

This is wicked-dumb, far dumber than the usual agent-rating schemes. Where those other “tools” can be gamed, Zillow’s system is based on measuring, first, a meaningless metric, and, second, by actually rewarding incompetence. Quantity not only is not quality, the number of listings a Realtor is carrying is very often a negative indicator — a symptom not of quality performance but of its absence.

Even acknowledging this, measuring velocity of turnover would not improve things, particularly since this is a metric that could be gamed. And even adding in true — meaning verified — list price to sales price ratios might not be enough. Readers here can correct me if they think I’m wrong, but I don’t think there is any reliable, objective way to rank Realtors by quality of performance.

And that’s as may be. It remains that graduating them by their inability to move product is inarguably a terrible way to rank real estate agents. The Professional Directory is a truly amazingly tone-deaf addition to Zillow.com.

As you might have deduced by my absence from these environs, I am very, very Read more

September 10, 2008

Zillow.com launches Mortgages Unzipped, a new consumer-focused lenderblog

by

Suburban Phoenix Real Estate Broker

Author website

Hither. The weblog will be an adjunct to Zillow Mortgage Marketplace, with a crew of loan bloggers and frequent ZMM mortgageurs providing the content. Our own Brian Brady and Tom Vanderwell are early contributors, and Zillow’s man on the job, David Gibbons, will be looking to add more writers as time goes on.

Visit the site for more info.

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August 29, 2008

Zillow.com: The “REconometrics” Firm of the Future?

by

Commercial Real Estate Finance Expert
Structured Debt and Equity
Licensed Real Estate Broker in AL, CA, and FL

Author website

Have you been watching Zillow.com lately, in the press? They’ve done a nice job at selling the mainstream media that they are the “real estate statistics” firm of choice. With the introduction of Zillow Mortgage Marketplace, they are aggregating real-time live quotes and are positioned to trump other media sites for accurate mortgage rates reporting.

I”ve admitted that I’m a Zillow-phile. As a mortgage wonk, I love the data they gather and the reports they publish. I read Spencer Raskoff’s Active Rain Blog, weekly. I’m constantly comparing my terms offerings to the realistic quotes on ZMM (I’m a few hundred bucks more expensive but a helluva lot cheaper than the average quote-ask me why sometime). Their Zestimates are getting more accurate as they rewrite their algorithms and gather more market data. As a reporting service, Zillow could and should take the national lead.

Lately, I’m starting to see Zillow try to emerge as an advisory firm of sorts which is fascinating to me. I’m not speculating here, watch what’s happening:

I started reading Spencer’s blog with this post about trading commissions; I realized that we had a common background and that we probably speak the same language. This recommendation confirmed that thought.

This was the first time I saw Zillow offering its data as analysis, by Zillow economist Stan Humphries. Then, Spencer Raskoff suggested that Zillow would have prevented the rampant speculation, from 2004-6. Interviews on Bloomberg, radio shows, and CNBC, all “reporting” about the rapid decline, with really cool granular data. Most recently, I spotted Spencer on Bloomberg, reporting about the decline and offering his prognostication about the market. Today, Spencer took a well-deserved pot shot at the NAR economists.

Silly Active Rain chatter? I think not. It’s my opinion that Zillow.com is fashioning itself as the econometrics firm for real estate, I call it “REconometerics” just to give it a name. Where will they take that “new” product? They can:

  • Publish the data, like a newspaper, as interesting content for readers,so that Zillow can sell more ads.
  • They can Read more
July 23, 2008

There aren’t enough advertising dollars for Zillow.com to go IPO, but adding Google Street View makes the site a little more useful

by

Suburban Phoenix Real Estate Broker

Author website

So far, in 30 months since Zillow.com launched, precisely one client has shown me a Zestimate. I mention the site all the time, just as a matter of casual conversation, but only the INTx types know what the hell I’m talking about. Last night on the the phone with Brian Brady, I equated the Realty.bots with model trains: We fool around with these model train layouts because they’re interesting and fun — and then we get up and go back to our real jobs on the railroad.

That’s not completely fair. I’ve been using Zillow more and more in my own real estate practice, as one of my pre-listing tools. Because our current MLS system sucks so bad — it’s gone on July 28th — often I will go to Zillow first.

One thing I’ve wanted and missed at the site is Google’s Street View.

Guess what we’re getting today? That link is dead for now, but I’m not under any embargo, so here’s the news:

Even though it uses Microsoft’s satellite imagery, Zillow will also be adding Google’s Street View technology for exterior elevations of homes and views of the streets and surrounding areas.

The other bit of Zillow news this week was the announcement by Zillow.com CFO Spencer Rascoff that the start-up will not be going IPO in 2008.

The problem? All of Zillow’s services are built on an advertising-based revenue model, and it is struggling to sell enough ads.
 
“There’s an online advertising recession right now, and we are not immune,” said Rascoff. He did not show any signs of departing from the company’s advertising-based business model, or its eventual plans for an IPO.

Street View doesn’t seem to be turned on yet, as I write this. The IPO spigot may be turned off for quite a while.

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