So here we go…
Zillow is using employee licensees to sell the homes it owns.
Zillow is now a broker in 50 states.
Zillow.com is now powered by IDX.
Seriously, you say?
OK, sure, yeah, it’s a significant move. But c’mon now, it’s far from shocking, isn’t stupid or vindictive, and is easy enough to understand rationally.
Having agent partners sell the homes it buys was always just a temporary contortion for Zillow, an industry anesthetic. That was obvious, wasn’t it?
And the IDX play? If you’re going to become a broker, it seems reasonable to participate in IDX. It’s what brokers do.
So yes, Zillow will hire Boston real estate agents
You may not like this news. I understand. When Zillow announced that it was getting into the game three years ago, I was really upset. Not because I didn’t get the business case for it, or thought it would eradicate Realtors, but because I felt like I was lied to.
But if I’m honest, I have to ask myself what the point of my sanctimoniousness was. Opendoor became a legit thing and Zillow had to react. If I am going to think in principled terms at this point, I’d rather see Zillow win selling homes to consumers than Opendoor win selling homes to institutional landlords.
I don’t like classical music or cantaloupe. But they exist. I deal. Contending with the reality of a Zillow juggernaut is a much harder, higher-stakes matter. But the bottom line is the same: time spent in a state of fear or disgust is time wasted.
Agents, teams and brokerages that process reality fully, strategize and adapt aren’t going to get killed by ZIllow. No Realtor mass extinction event is imminent. And our industry violence has been, and likely always will be, within the tribe: RE/MAX hurt Century 21 back in the day, then Keller Williams hammered on RE/MAX, and now EXP is landing body blows on Keller.
Consumers like and trust Zillow. This is a truth no angst-derived industry solvent can dissolve. If you are an agent, broker or team not on the ZIllow platform, it’s left to you to strengthen your own foundation of trust, to cultivate the affection people may have for you.
You may believe this is just a precursor to Zillow listing homes it does not own — in other words, offering sellers a “take our offer or list it with us” proposition. Certainly they could. But I don’t think they will in the near future. Why would Zillow carry that burden when they’re getting 35% referral fees on the seller leads they’re feeding to existing Premier Agents already? Plus, remember — and I believe them on this — Zillow’s North Star is the consumer, to whom it promises a simpler, more certain way to move to “life’s next chapter.” It’s hard to deliver on that promise when you’re selling a home someone else still owns.
But, hey, if you’re a broker, agent or team in this business, I think it would be a good idea to assume, just for the sake of planning your own strategy, that Zillow will in fact do everything you fear most. What’s your strategy for getting where you want to go if that happens?
That’s the question to focus on. Because I think it’s clear that howling at the moon about what Big Z does isn’t going to produce useful answers.
Have a good weekend.
The continued economic fallout from the spread of COVID-19 has introduced immense uncertainty into the Boston real estate market as consumers step back from large purchases and social distancing puts a chill on necessary market services. As a result, Zillow expects Boston condos prices will most likely fall 2%-to-3% through the end of the year from pre-coronavirus levels, and home sales to fall as much as 60%, before both begin to slowly recover to baseline levels by the end of 2021.
The latest forecasts, based on published and proprietary macroeconomic and housing data, also include more pessimistic or optimistic projections based on the duration of the pandemic and the depth of its impact on the broader economy.
The forecasts center around a baseline prediction of a 4.9% decrease in United States GDP in 2020 and a subsequent 5.7% increase in 2021.
Under the baseline scenario, we expect:
- A 2%-3% drop in prices through the end of 2020, followed by a slow recovery throughout 2021. Prices will return to Q4 2019 levels by Q3 2021.
- A 50% decline in home sales from their pre-coronavirus levels, as measured at the end of 2019. Home sales will bottom out in Q2 before beginning to improve near the end of Q2 2020.
- Sales volume will recover to about 97% of Q4 2019 levels by the end of 2021.
- The pace of recovery is what distinguishes our three scenarios from one another.
Each of our scenarios implies very different paths for home prices and sales volumes. Our optimistic scenario features a small dip in house prices in Q2-Q3 followed by a robust recovery. The baseline medium scenario features a U-shaped trough in Q4 followed by a slower recovery and our pessimistic scenario features continued weakness through all of 2021 (more of a “long U” shape). Under our more-optimistic assumptions, the market could experience a fast, V-shaped “snapback” similar to what happened in the Hong Kong real estate market after the 2003 SARS outbreak. The medium scenario features a “check-mark” shaped recovery and our pessimistic scenario features more of a “wide-U” recovery, with a longer bottom and more gradual pace of improvement.