Image courtesy of Flickr, Pascal
Zillow, Trulia and Realtor.com are popular online destinations for home owners, home buyers and real estate professionals alike. Each have gained market share by providing a service to its users that was not easily available in the past.
Whether you are in the real estate business or not, you have either heard of or used Zillow, Trulia and Realtor.com before. These three websites account for the majority of the entire market share for all real estate listing websites and in recent years have become a preferred destination for real estate brokers to list, promote and sell properties for their clients.
According to comScore, Inc. (an analytics company), in the month of June 2015, the top 20 real estate listing websites accounted for 176.023 million unique website visitors. Of these top 20 sites, Zillow.com, Realtor.com and Trulia.com were the top three, taking a combined 68.21 percent of the market share. The following pie chart shows how much of the market share from those 176.023 million unique visitors each of the top three sites had in June 2015.
In this article, you will learn what each company does, a little about their history and growth in quarterly visitors, and about the details of the mergers and acquisitions of each company.
Zillow seeks to serve the full lifecycle of homeownership: renting, financing, buying, selling, remodeling and more. The company has a database of more than 110 million U.S. homes - including homes for sale, homes for rent and homes not currently on the market. For the homes in its database, Zillow assigns what they call Zestimate home values, Rent Zestimates and other home-related information. Zestimate is a term made up by Zillow referring to an estimated market value of a home or rental property.
Rich Barton founded Zillow in 2006. Barton was the visionary behind the popular travel site Expedia. He created Zillow because he believes people love to be in control and make decisions for themselves. Zillow does that by letting everyday consumers see information about every home in the country.
In December 2006, Zillow introduced two popular features along with a real estate wiki, which is a website that allows editing of its content by users:
"Make Me Move" Price
Homeowners could post their homes for sale and set a "Make Me Move" dream price, which became a great way to pre-market a home. It was a way to get homeowners to pretend like they were listing their homes for sale at a price that they couldn't refuse if offered.
Bird's Eye View
Zillow used Microsoft's Virtual Earth to show aerial photographs of homes taken from airplanes rather than the conventional overhead satellite images. In most cases, the photographs were much clearer and made the user experience better.
Three years later in 2009, Zillow expanded its service to include rental listings. In 2013, Zillow began powering AOL's real estate report and began the same for MSN in 2014.
Today, Zillow offers the following popular features to its users.
Zillow uses public information to determine a home value estimate. It uses a range of information, including comparable houses in the neighborhood. Although it does not account for home-specific factors such as remodeling, users have the option to enter this information on their own.
Real Estate Market Reports
Zillow creates home value reports for the U.S. and over 130 metropolitan areas. The reports include market trends, such as 5 and 10 year annualized change, negative equity, short sales and foreclosure transactions. The company also releases a Homeowner Confidence Survey that measures homeowners' perceptions about home value changes of their own home and the local market.
This site allows users to ask real estate questions and get answers from real estate agents or other users within the Zillow community.
Zillow Mortgage Marketplace
This relatively new service allows borrowers to get loan quotes without providing personal information, in order to satisfy homeowner needs to research current mortgage rates.
In the 1th Quarter of 2014 (January 1 - March 31) Zillow recorded 212.004 million unique visits to its website - more than any other online real estate site. During the 4th Quarter of 2014 (October 1 - December 31) Zillow recorded 230.139 million unique visitors to its website.
According to Zillow, they state that the complexities involved in having purchased Trulia and other businesses across multiple platforms are the reasons why the company will no longer be officially reporting website visitor metrics after 4th Quarter 2014.
The following graph tracks the growth of unique website visitors of Zillow.com from the 1st Quarter 2013 to the 4th Quarter 2014.
With all this traffic, how accurate is Zillow? Zillow CEO Spencer Rascoff stated in a Los Angeles Times article that nationwide Zestimates have a "median error rate" of about 8 percent, meaning the Zestimate prices could be 8 percent higher or lower than the actual value. However, that error rate is much higher in various localized regions. For example, the median error rate increases to 19.9 percent in Manhattan New York. Error rates tend to increase further in more rural counties. California is a case in point, where Zestimate error rates on values in some rural California counties are as high as 26 percent.
Since February 2015, Trulia is a fully owned subsidiary of Zillow. Like Zillow, Trulia is an online real estate listing site helping its users with the home search and research process.
When launched in 2005, Trulia only provided information on California properties. Less than a year later, Trulia expanded nationally because of the growing demand from listing agents to give their listings nationwide exposure through the site.
In July 2012, the company filed for an initial public offering (IPO) which occurred in September of that year. The IPO was priced at $17 per share, but the stock began trading higher at an opening price of $22.10 showing enthusiasm in the marketplace for Trulia stocks.
Zillow announced a deal to buy Trulia for $3.5 billion in an all stock deal on July 28, 2014. The purchase was completed during the 1st Quarter of 2015.
In addition to offering home value estimates similar to Zillow, Trulia also offers the following features to its users:
Criminal Activity Maps
Trulia uses geo-data maps from its partners CrimeReports.com, EveryBlock.com, and SpotCrime.com to generate maps of criminal activity in metropolitan areas. Users can view crime statistics in areas and neighborhoods and compare data between two regions before they determine where the best place is for them to buy.
Local Schools and Amenities Reports
Trulia users can view other user ratings on the safety, walkability, pet-friendliness and other criteria specific to a particular neighborhood or city. Trulia also provides school reports that include school name, contact information, ratings, grades taught, and whether the school is public or private.
Interactive Commuter and Transit Maps
These real-time maps provide users with driving or commute times between any two points in the U.S. in order to give users information of how much time it would take for them to commute before they determine if a particular home or neighborhood is right for them.
In the 1th Quarter of 2014 (January 1 - March 31) Trulia recorded 128.70 million unique visits to its website. During the 3rd Quarter of 2014 (July 1 - September 30) Trulia recorded 165 million unique visitors to its website.
According to Zillow, the parent company of Trulia, they state that the complexities involved in having purchased Trulia and other businesses across multiple platforms are the reasons why the company will no longer be officially reporting website visitor metrics for both companies.
The following graph tracks the growth of unique website visitors of Trulia.com from the 1st Quarter 2013 to the 3rd Quarter 2014.
Realtor.com displays home listings from nearly 900 Multiple Listing Services (MLS) across the U.S. The site is one of the products offered by Move.com which is owned and operated by NewsCorp.
Realtor.com started out in the mid-nineties as the consumer website for the National Association of Realtors (NAR). NAR originally built the Realtor Information Network which was a disaster. Following its failure, NAR partnered with RealSelect/Homestore (now known as Move.com) to create Realtor.com.
Until competitors such as Zillow and Trulia entered the field, Realtor.com had a virtual monopoly in the online real estate listing business.
On September 30, 2014, NewsCorp announced its acquisition of Realtor.com's parent company Move.com for $950 million in cash. Ever since, the website has been working on improvements and buying new advertising in order to rebrand and revitalize its business to stay competitive.
Realtor.com has more than 3 million for-sale listings available on its site, which means it accounts for more than 97 percent of all MLS-listed for-sale properties. More than 90 percent of the listings are updated every 15 minutes.
The site was the first of its kind to add a school search. Its Nearby Schools button on the home screen allows users to find schools in the area. Interactive maps show school boundaries and neighborhood assignments. In addition, users can search Realtor.com's listings by public school or assigned school district.
In the 1th Quarter of 2014 (January 1 - March 31) Realtor.com recorded 59.20 million unique visits to its website. During the 4th Quarter of 2014 (October 1 - December 31) Realtor.com recorded 65.70 million unique visitors to its website.
The following graph tracks the growth of unique website visitors of Realtor.com from the 1st quarter 2013 to the 4th quarter 2014.
The main similarity between all three sites is their extensive database of property listings. Each site allows users to search for available properties through several different criteria. Property listings include just about everything a homebuyer would want to know about the house and neighborhood before deciding if the home is worth a closer look. Zillow and Trulia are similar in that they offer estimates of a home's value. Each includes the highly desired functionality to search for homes by school district.
While the three sites are very similar when it comes to real estate listings, each has a feature or two that its competitors do not offer. Realtor.com, the most traditional of the online real estate sites, focuses more on its extensive listings but it does not offer home value estimates in the way that Trulia and Zillow do. Zillow stands apart from Trulia in that it offers Rent Zestimates in addition to home value estimates.
Finally, Trulia is more of a collaborative site to help consumers find the right home in the right neighborhood. Therefore, Trulia has a larger, more engaged community of users than its parent company Zillow and its competitor Realtor.com.
Businesses exist to meet the demands of consumers by making it easier for them to get what they need, and consumers continue to say they would rather conduct most of their business online. From the creation of the first hunting spear to the advent of 3D printers, technology aims to improve on what existed previously. We evolve, and therefore our tools must evolve with us.
The trend for faster, better and cheaper technology continues to move forward while leaving behind traditional brick and mortar service companies that struggle to keep up. Zillow, Trulia and Realtor.com have filled a need for people to conduct their real estate business online from wherever they choose at whatever time they choose. These companies have collectively taken over the majority of the market share dealing with real estate transactions, and as investors continue to throw money at them, they are only improving and expanding their reach.
At this point in time it's hard to say with absolute certainty if all or any one of these three companies will still be around 20 years from today, but I can say with relative certainty that the need for people to conduct business online in faster, better, and cheaper ways will become the norm. Whatever companies create technology to fill these needs will be the ones to prosper in the future.
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