Zillow

Zillow Group
Public
Traded as NASDAQ: Z
NASDAQ: ZG
Headquarters Russell Investments Center
Seattle, Washington
Key people
  • Spencer Rascoff CEO
  • Stan Humphries Chief Economist[1]
Revenue IncreaseUS$644.6 million (2015)[2]
DecreaseUS$-149.5 million (2015)[2]
DecreaseUS$-148.8 million (2015)[2]
Total assets IncreaseUS3.1 million (2015)[2]
Total equity DecreaseUS$215.1 million (2015)[2]
Website zillow.com

Zillow Group, or simply Zillow, is an online real estate database company that was founded in 2006[3] and created by Rich Barton and Lloyd Frink, former Microsoft executives and founders of Microsoft spin-off Expedia. Spencer Rascoff is the current CEO of Zillow, Inc.[1]

Business model

Zillow has stated that it is a media company that generates revenue by selling advertising on its web site. In April 2009, Zillow announced a partnership to lend its real estate search engine to the web sites of more than 180 United States newspapers as a part of the Zillow Newspaper Consortium. Zillow shares advertising revenue from the co-branded sites with the newspapers and extends its reach into local markets.[4]

In February 2011, Zillow and Yahoo! Real Estate launched an exclusive partnership creating the largest real-estate advertising network on the web, according to comScore Media Metrix.[5]

Acquisitions

Website features

Zillow has data on 110 million homes across the United States, not just those homes currently for sale.[17] In addition to giving value estimates of homes, it offers several features including value changes of each home in a given time frame (such as one, five, or 10 years), aerial views of homes, and prices of comparable homes in the area. Where it can access appropriate public data, it also provides basic information on a given home, such as square footage and the number of bedrooms and bathrooms. Users can also get current estimates of homes if there was a significant change made, such as a recently remodeled kitchen. Zillow provides an application programming interface (API) and developer support network.[18][19][20]

In December 2006, Zillow launched three new pieces of functionality: allowing users to post homes for sale and set a "Make Me Move" price (an informal way to pre-market a home), as well as a real estate wiki. In 2006, Zillow teamed with Microsoft to offer Bird's Eye View, a feature in Microsoft Virtual Earth, that shows (in certain areas) clearer aerial photographs taken from airplanes rather than conventional satellite imagery.[21] Zillow uses this functionality for entertainment-focused features on famous homes.[22]

In December 2009, Zillow expanded its services to include the rental market.[23] The addition of rental listings enabled users to list a home for rent and search for both rental homes and homes for sale.

In late 2013, Zillow began powering AOL Real Estate. In July 2014, Zillow also took over the real estate portal for MSN Real Estate.[24]

Zillow Mortgage Marketplace

On April 3, 2008, Zillow launched a service called Zillow Mortgage Marketplace. This service allows for borrowers to get custom loan quotes without revealing personally identifying information.[25][26]

Zillow Mobile

Zillow Mobile apps allow users to view nearby homes based on the user's location.

Zillow Advice

On December 16, 2008, Zillow launched Zillow Advice, allowing people to ask real estate questions online and get answers from the Web site's community of experts.[28]

Real estate market reports

Zillow produces home value reports for the nation and over 130 metropolitan statistical areas. The reports identify market trends including, but not limited to: five and 10-year annualized change, negative equity,[29] short sales and foreclosure transactions.

Zillow also releases a Homeowner Confidence Survey.[30] The survey is conducted by Harris Interactive and measures homeowners' perceptions about home value changes of their own home and the local market.

Report for the Bellingam area

On August 26, 2016 the Bellingham Herald published housing prices and rental statistics obtained from Zillow[31] which said that these statistics conflicted with those obtained from the Housing Finance Agency.[32]

Neighborhood Boundary Maps (GIS Data)

The Zillow data team has created a database of nearly 7,000 neighborhood boundaries in the largest cities in the U.S. and made them available via Creative Commons Attribute-Sharealike license.

Website activity

The company said it had more than 24 million unique visitors in September 2011, representing year-over-year growth of 103 percent.[33][34] Of those users, 90% own a home and more than three quarters are looking to buy or sell within the next two years, helping others to buy or sell or looking to rent. Zillow claims over 50 million U.S. homes have been viewed. In some cities more than 90% of all homes that exist have been viewed, including San Francisco, Los Angeles, Boston and Seattle.

Zestimate

Zillow determines an estimate ("Zestimate," pronounced "ZEST-imate") for a home based on a range of publicly available information, including sales of comparable houses in a neighborhood. Once a Zestimate has been established there is no way to remove it from the homes address even if it is not accurate. Zestimate does not take into consideration home-specific factors like recent remodeling, although there is an option to update the information for a particular home. The accuracy of the Zestimate varies by location depending on how much information is publicly available, but Zillow allows users to check the accuracy of Zestimates in their own region against actual sales, In many U.S. states, information on the transfer prices of real estate is readily available and accessible by the general public and is not exclusively held in realtors' databases.[35]

In March 2011, Zillow released Rent Zestimates, which provide estimated rent prices for 90 million homes on both the Zillow website and all of its mobile apps.[36]

On June 14, 2011, Zillow changed its algorithm used to calculate Zestimates. In addition to changing the current Zestimate for millions of homes throughout the country, Zillow changed historical Zestimate value information dating back to 2006. This resulted in drastic changes in both past and present Zestimate values for millions of homeowners.

Critique of Zestimate accuracy

In 2007, The Wall Street Journal studied the accuracy of Zillow's estimates and found that they "often are very good, frequently within a few percentage points of the actual price paid. But when Zillow is bad, it can be terrible."[37]

According to Fortune, "Zillow has Zestimated the value of 57 percent of U.S. housing stock, but only 65 percent of that could be considered 'accurate'—by its definition, within 10 percent of the actual selling price. And even that accuracy isn't equally distributed."[38] Fortune cites the state of Louisiana as an example, where "the site is just about worthless".[38]

In October 2006, the National Community Reinvestment Coalition filed a complaint with the Federal Trade Commission[39] stating that Zillow was "intentionally misleading consumers and real-estate professionals to rely upon the accuracy of its valuation services despite the full knowledge of the company officials that their valuation Automated Valuation Model (AVM) mechanism is highly inaccurate and misleading." In a letter dated May 4, 2007, the FTC elected not to investigate this complaint,[40] which was later withdrawn by the NCRC.

Real estate agents with specific market knowledge are more likely to know specific factors affecting the sale of a home such as the overall condition of the home, room flow, landscaping, views, traffic noise, and privacy. These factors have been called unzillowables, a term coined in the real estate blogosphere.

Zillow may use the last bank assessment or sales transaction for home value. Some of this data is old and may not reflect changes or improvements to the property. This may mislead buyers and sellers who place too much credence in the Zestimate while failing to understand that any home's price is determined by what the market will bear.

Using data published on the Zillow website, the typical Zestimate error in the United States in July 2016 was $14,000.[41]

Controversy and lawsuits

While factors contributing to estimates are described elsewhere, Zillow seemingly overemphasis home square footage as the major metric driving property valuation. This method may not be unique to Zillow, but unduly distorts value expectations.[42] Listings in areas where land is priced at high premiums often reflect an identical Zillow Estimate to that of nearby homes with comparable interior square footage, but where the home might be decades older. Condition, age of home, special features, proximity to nuisances are insufficiently factored into the estimate. Zillow has made some effort tp add balance by including option for owners to provide their own value estimate; but, these figures can be similarly unreliable as being opinion instead of quantifiable.

In 2014, Zillow faced several lawsuits from former employees at the Zillow operation in Irvine, California, alleging violations of California Labor Code and California Business and Professions Code.[43] On February 26, 2016, the U.S. District Court for the Central District of California certified the class to include anyone who worked as an inside sales consultant at Zillow between November 2010 and January 2015.[44] Among the numerous allegations brought by high-profile attorneys Bobby Samini and Mark Geragos, Zillow is accused of failing to pay wages, failing to pay overtime pay, and failing to provide meal and rest breaks. Zillow responded that "the narrative being pushed by this law firm through their multiple lawsuits is completely inconsistent with those who know and work with Zillow...the behavior described does not accurately depict our culture or the 1,200 Zillow employees."[45]

In addition, Samini and Geragos represented a former Zillow employee in a sexual harassment action against the company, alleging "sexual torture"[46] and “the most heinous acts of sexual harassment imaginable.”[47] According to the lawsuit, Zillow's Southern California office represents an “adult frat house where sexual harassment and misconduct are normalized, condoned, and promoted by male managers.”[46] Based on the allegations against the company, Samini has called Zillow a "modern day Animal House."[48] On May 5, 2016, Zillow settled the action for an undisclosed amount, without admitting any wrongdoings.[49]

See also

References

  1. 1 2 3 Lerman, Rachel (10 December 2014). "Zillow CEO Spencer Rascoff gets book deal with major New York publisher". Puget Sound Business Journal.
  2. 1 2 3 4 5 "Z Income Statement - Balance Sheet - Cash Flow - Zillow Group, Inc. Stock - Yahoo Finance". Retrieved 22 October 2016.
  3. ↑ Inc., Zillow,. "What is Zillow? - Zillow". Retrieved 22 October 2016.
  4. ↑ Wortham, Jenna (April 1, 2009). "Newspapers Begin to Use Zillow". The New York Times.
  5. ↑ Stynes, Tess (2010-07-09). "Yahoo, Zillow to Pair Up on Web Real-Estate Ad Network". The Wall Street Journal.
  6. ↑ Leena Rao, TechCrunch. "Zillow Buys Real Estate Listings Creation And Distribution Tool Postlets." April 11, 2011. Retrieved April 11, 2011.
  7. ↑ "R. Newman, Zillow Press Release" (Press release). Nov 2, 2011.
  8. ↑ Brier Dudley, Seattle Times. "Zillow buys Rent Juice, reports blowout quarter." May 2, 2012.
  9. ↑ Leena Rao, TechCrunch. "Zillow Acquires Real Estate Shopping And Collaboration Platform For Brokers And Homebuyers, Buyfolio." October 31, 2012.
  10. ↑ Leena Rao, TechCrunch. "Zillow Acquires Mortgage Software Company Mortech For $17 Million." November 5, 2012.
  11. ↑ Frederic Lardinois, TechCrunch. "http://techcrunch.com/2012/11/26/zillow-acquires-rental-and-real-estate-search-site-hotpads-for-16-million-to-grow-its-rental-marketplace/ Zillow Acquires Rental And Real Estate Search Site HotPads For $16 Million To Grow Its Rental Marketplace." November 26, 2012.
  12. ↑ Frier, Sarah; Levy, Ari (August 19, 2013). "Zillow Buys Real-Estate Site StreetEasy for $50 Million". Bloomberg.
  13. ↑ Lardinois, Frederic July 16th 2014. TechCrunch. "Zillow Acquires Retsly, A Service That Helps Developers Access Real Estate Listings"
  14. ↑ dealbook.nytimes.com/2014/07/28/zillow-to-buy-trulia-for-3-5-billion/
  15. ↑ PRNewsWire. "Zillow Group to Acquire DotLoop." July 22, 2015.
  16. ↑ Zillow Group. "." January 03, 2016.
  17. ↑ Zillow CEO shares new rules of real estate, CBS News, 28 January 2015, retrieved 30 June 2015
  18. ↑ "Zillow.com Launches Beta Real Estate Site: Valuations and Data on More Than 60 Million Homes in U.S", PRNewsWire
  19. ↑ Interview with Zillow's CFO, Spencer Rascoff, Podtech.net
  20. ↑ Interview with the Zillow development team, Podtech
  21. ↑ Cook, John (2006-04-15). "Zillow.com offers a closer look at homes". Seattle PI.
  22. ↑ "Zillow: Monica's Apartment From Friends Worth $2.9 Million". Curbed. 2006-06-23.
  23. ↑ "Zillow launches rental listings and search service". Reuters. 2009-12-15.
  24. ↑ Hagey, Paul. "Zillow takes over real estate search at MSN Real Estate after Move Inc.'s exit". Retrieved 2 July 2014.
  25. ↑ Gopal, Prashant (2008-04-03). "Zillow Opens Online Mortgage Marketplace". Businessweek.com. Retrieved 2011-02-26.
  26. ↑ "Waltham, MA News - Waltham, Massachusetts - Wicked Local Waltham". Dailynewstribune.com. Retrieved 2011-02-26.
  27. ↑ (Not updated since initial release as of 2015-03-26. Also listed as "This app is no longer published" on 2015-03-26.) You can see it at http://www.windowsphone.com/en-us/store/app/zillow/f2cccea4-14a1-e011-986b-78e7d1fa76f8
  28. ↑ Cohen, Aubrey (2008-12-16). "Get advice from Zillow | Seattle Real Estate News - Seattle Post-Intelligencer". Blog.seattlepi.com. Retrieved 2011-02-26.
  29. ↑ Timiraos, Nick (May 6, 2009). "Affluent Homeowners: Underwater and Sinking Fast". The Wall Street Journal.
  30. ↑ "Most U.S. homeowners think a bottom has been reached: Zillow". Reuters. May 14, 2009.
  31. ↑ "Which Bellingham neighborhoods are seeing jump in home values?". Retrieved 22 October 2016.
  32. ↑ http://www.fhfa.gov/AboutUs/Reports/ReportDocuments/HPI_2Q2016final.pdf
  33. ↑ "Form 8-K". United States Securities and Exchange Commission. October 4, 2011.
  34. ↑ Geron, Tomio. "Zillow Buys Real Estate Listings Service Postlets". Forbes.
  35. ↑ "Maryland tax assessment database allowing searches of all property transfers". Dat.state.md.us. Retrieved 2011-02-26.
  36. ↑ "Zillow's Rent Zestimates to provide rent prices for 90 million homes". VentureBeat. Retrieved 2013-09-29.
  37. ↑ Hagerty, James R. "How Good Are Zillow's Estimates?", The Wall Street Journal, 2007-02-14. Retrieved on 2009-02-25.
  38. 1 2 O'Brien, Jeffrey M. (February 7, 2007). "What's your house really worth? (cont.)". CNN.
  39. ↑ "Federal Trade Commission Complaint" Archived July 1, 2007, at the Wayback Machine.
  40. ↑ http://www.bloodhoundrealty.com/BloodhoundBlog/FTC_NCRC_Zillow.pdf
  41. ↑ "Zillow Zestimate Accuracy Chart". Real Estate Decoded. Retrieved 21 July 2016.
  42. ↑ "see LA Times story". Retrieved 9 February 2015.
  43. ↑ "Zillow Escapes Worker's $5M OT Class Action Under Landers - Law360". www.law360.com. Retrieved 2016-07-09.
  44. ↑ "Class Action Certified As to Zillow Consultants for Unpaid Overtime - Chicago Business Litigation Lawyer Blog". 2016-03-28. Retrieved 2016-07-09.
  45. ↑ "Zillow's alleged "frat house" culture leads to new lawsuit". Fortune. Retrieved 5 December 2014.
  46. 1 2 "Mark Geragos: More Zillow employees victims of sexual harassment". www.housingwire.com. Retrieved 2016-07-09.
  47. ↑ "Zillow settles sexual harassment lawsuit". www.housingwire.com. Retrieved 2016-07-09.
  48. ↑ "Zillow Is a `Modern Day Animal House': Attorney Samini". Bloomberg.com. Retrieved 2016-07-09.
  49. ↑ "Zillow settles lawsuits regarding employees at Irvine sales office - L.A. Biz". Retrieved 2016-07-09.
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