Zillow's Rise to Dominance in Real Estate with Q1 Earnings
The company's growth and influence have significant implications for the real estate industry, and it is essential for industry professionals to understand the dynamics at play. By examining Zillow's key metrics and strategies, the industry can develop effective countermeasures to maintain its position in the market.
Zillow Group is expected to announce Q1 earnings of $0.43 per share, a 19.4% year-over-year increase, with revenues projected to reach $588.55 million, an 11.3% increase from the same quarter last year. The company's key metrics show significant growth in various sectors, including mortgages and rentals.
The company's revenue from mortgages is projected to increase by 25.2% year-over-year, while revenue from rentals is expected to rise by 30%. Zillow's mobile applications and websites have also seen an increase in average monthly unique users, reaching 224.67 million, up from 217 million last year. The company's visits have also increased to 2.33 billion, up from 2.32 billion last year.
Despite the expected increase in earnings, shares of Zillow have a Zacks Rank #4 (Sell), indicating potential underperformance in the near future. The company's strategy of positioning itself as the "consumer champion" has allowed it to fill the gaps left by the real estate industry's lack of cohesion. Zillow has built a vertical empire by inserting itself into every stage of the real estate transaction, using billions in ad dollars from Realtors.
To counter Zillow's growing influence, the real estate industry needs to stop funding the company's growth through ad dollars and update MLS photo policies to allow listing agents' contact information. The industry should also get involved in setting MLS rules and association policies, and master existing marketing tools. By returning to grassroots methods such as open houses, social media, and community events, the industry can build relationships and local authority, and potentially turn the tide against Zillow's dominance.
As Zillow continues to execute its master plan to become the dominant force in real estate, the industry must take a proactive approach to reclaim its position. By understanding Zillow's strategy and taking steps to counter it, the real estate industry can work towards a more balanced and competitive market.