To all the agents in the house,
Unlike Howard Ratner viewing the 76ers-Celtics at the end of "Uncut Gems," I have not exactly been hyperventilating over the ups and downs of real estate brokerage stocks this week. The market capitalization of companies including Opendoor, Redfin, Compass and eXp have each dipped a few percentage points in the last week, but certainly not more than any other kind of stock.
However! I have been keeping tabs on the stocks, and Zillow's performance is interesting. Zillow's market value was $12.6 billion at the close of the Nasdaq market on Tuesday. On the one hand, Zillow was worth almost four times more one year ago when it had high hopes about capitalizing on iBuying, which the company has sought to wind down since November.
On the other hand, that $12.6 billion is more than 300% the valuation of brokerages Realogy, Compass and eXp. It's 400% more than its listings website rival Redfin. And Zillow's Wall Street worth is twice as much as Opendoor, whose stock has sunk like a stone since a brief November heyday of being the company that didn't pull the plug on iBuying.
That means (except for CoStar, which is just now stepping foot into residential real estate) Zillow is still the most highly regarded residential real estate company by stock investors. The reason why would seem its 226 million visitors each month to the site, and the notion that Zillow can capitalize on that audience, perhaps through a revenue stream beyond Premier Agent, the website's buyer's agent advertising.
Zillow has not yet explained its next move. The company's fourth quarter earnings call is Feb, 10, and they have not answered HousingWire's questions about possible new products. Currently, the company is Premier Agent, a mortgage division that lost money in the third quarter, and ShowingTime, a home viewing scheduling service and database for agents.
Zillow bought ShowingTime for over $500 million, and it's already the industry standard for scheduling home showings. Maybe Zillow will find a new way to monetize this product, but I haven't heard many concrete ideas around that.
So, what's next?
Will Zillow take steps to become more of a real estate brokerage, a mortgage company, a more complete rental listings website? Or are they okay simply playing defense against CoStar?
Agents, please let me know what you think. I can be called at mblake@housingwire.com.
Sincerely,
Matthew Blake
Senior Real Estate Reporter
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