More on Zillow taking over the real estate world – an excerpt:
Zillow is simultaneously taking on traditional real estate agents, media companies and publishers of housing data — and it’s threatening all of them in the process.
Not a bad tactic when you’re trying to corner a market.
“Zillow saw this opportunity, about five years ago, to fill what we perceived to be a massive void in academia, government and in the media,” says Spencer Rascoff, the company’s 37-year-old chief executive. “Nobody was providing objective, unbiased data and analysis about what was happening in the real estate and mortgage industries. The people that were providing it represented trade associations with agendas and were advancing particular policy prescriptions for their constituents.”
When Rascoff says “trade associations with agendas,” he means the National Association of Realtors, where the mention of the word “Zillow” makes people recoil in distaste (the Association told its membership that it didn’t take part in a White House online forum in August during which Rascoff interviewed the president on housing because Zillow was a “popular housing entertainment website” and the interview was “not a serious public policy discussion”). While many real estate agents have adapted to leverage Zillow and other listings sites to their advantage, Zillow has also given homebuyers lots of information they used to have to get from professionals, which makes it more difficult for agents to add value.
Zillow’s numbers are different. Rather than just measure what’s selling, their team of over a dozen economists, statisticians, and other analysts pulls in local property databases to value all homes, which owners can then update themselves with attributes like a renovation or a new garage. That creates what’s called a “hedonic” index, which is more difficult to compute but also a better reflection of the entire market. Zillow also prides itself on telling people when the market looks bad, like it did before the real estate bubble popped and as it kept sliding.
“You looked at other industry professionals, and they would tell you the bottom’s right around the corner, things are going to get better. And month after month after month, we were the only ones saying home values are bad and they’re going to get worse,” Humphries says. “Our business only works if people trust us to be telling them the unbiased truth. We don’t want to tell them now’s a good time to buy and sell, because we believe that now can’t be a good time to be doing both.”
With the “massive void”, anyone can step up to the microphone and be the expert. Zillow is doing a great job at filling the void – and good for them.
Where will they go from here?
It wouldn’t take much more for them to try to take out realtors altogether.