San Francisco Chronicle
Zillow traffic up after shift
Site known for real estate prices decided to add for-sale listings
Marni Leff Kottle, Chronicle Staff Writer
Saturday, December 9, 2006
It's been two days since Zillow.com, the free-for-all Web site that brags about having a price for virtually every house in the country, entered a new part of the market with for-sale listings.
And, as can be expected from a company that admits part of its mission is to entertain, the reaction is mixed.
Richard Barton, Zillow's chief executive, was the first person to post a for-sale listing to the site. He's asking almost $3 million for his four-bedroom Seattle home.
The second listing, a $376,000 house in Compton, Los Angeles County, was posted Thursday at 4:40 a.m., just minutes after Zillow pushed the button that allows real estate agents and homeowners to post virtual for-sale signs next to satellite pictures of their houses.
By the end of its first day Thursday, Zillow had collected 4,000 listings and traffic to the site was 35 percent higher than on an average day.
The addition of listings isn't designed to move Zillow into the brokerage business, but to bring more people to the site and increase advertising revenue.
Since it started nine months ago, Zillow has generated buzz because it lets homeowners and real estate junkies estimate the price of any home. The site has also received criticism from people in the industry who say those estimates are woefully flawed.
The real estate listings mean Zillow will rev up competition with companies such as San Francisco's Trulia.com and San Ramon's Reply Inc., which already offer listings and other features designed for a similar audience.
Bay Area agents Friday were split on how quickly they think the new feature will catch on and whether it will help reel in buyers in a tough market.
"I will seriously consider using Zillow," said Linda Harrison, an agent for Pacific Union, who specializes in luxury real estate and investment properties in San Francisco. "It's a win-win if it helps bring more traffic to a particular listing."
Already, Harrison posts listings on Craigslist, has her own Web site and creates individual sites for the houses she lists.
Harrison fits the profile of the type of agent who is most likely to post on Zillow, according to Scott Kucirek, general manger for Prudential California Realty. The feature will catch on most quickly in Northern California and the Pacific Northwest, where people are tech-savvy, he said.
"While there is a growing pool of agents who are technologically sophisticated, there is also a big group of people who are just not going to do it," Kucirek said.
Some of Zillow's rivals questioned whether listings are a good fit for Zillow because they will provide would-be home buyers with dueling numbers.
"Zillow is famous for its valuations," said Pete Flint, chief executive of Trulia. "Evaluating the value of a home and selling it don't naturally fit side by side because there are clearly some conflicts between what a house is listed for a what a computer thinks it's worth."
Trulia began running Bay Area for-sale listings in September 2005 and now has more than 1 million on its site. The company relies on relationships with real estate companies to get the information, Flint said.
One thing that Trulia and Zillow have in common is that they depend on real estate agents and homeowners for listings instead of the Multiple Listing Service. That means the companies are always going to lack complete information, said Payam Zamani, Reply's chief executive.
"That's the only way you're going to have a complete database of listings," Zamani said.
Reply, like Zillow, makes money from advertising. But the company also generates revenue by forwarding the contact information to real estate agents who pay for the leads.
Although Zillow joined the online real estate frenzy later than other sites, it has generated lots of buzz, raising $57 million in venture capital, and gets more than 3 million visitors each month. The company has also garnered attention because of its founders: Richard Barton, who started the travel site Expedia.com, and Lloyd Frink, a former Expedia executive.
That buzz is one reason that Ernesto Eugenio, an agent at Realty World Elite Realty in Dublin, decided to test the for-sale listings. He posted a $1.2 million home in Dublin early Thursday.
Whether Eugenio posts more houses will depend on what happens with the first one.
"There are a lot of consumers out there who are familiar with Zillow," he said. "I'm just testing it out. It's new -- I'll see if it generates something."
More than other real estate Web sites, Zillow caters to the sort of real estate shopper who wants to know how much the guy down the street's house is worth, Kucirek said.
Zillow also introduced a second new feature on Thursday called "make me move" that's intended for that group.
The feature allows homeowners to post a price at which they'd be willing to sell even though their home isn't formally for sale.
"There's a lot of voyeurism on Zillow," Kucirek said. "This is another interesting thing that caters to that population."
Not too serious
Barton said that even as Zillow adds utilitarian services such as the real estate listings, the company is focused on maintaining its less-serious side, too.
"We want to entertain," Barton said. "We don't want to lose the frivolous entertainment value."
Still, there's also a serious side to the make-me-move number. For some people who want to test the market or who receive interest at their dream price, it may represent the first step toward selling a home.
By the end of the day Thursday about 1,200 people had posted make-me-move prices. Some, like Jamie Glenn, a Trulia executive, were testing the service. He posted a price of $1.25 million. Zillow estimates the value of Glenn's San Mateo home at $873,805.
"I arrived at the price purely by thinking about how much it would take for me to actually want to move," Glenn said. "The other thing I wanted to see is whether I would get spammed by agents, as I am a little curious on if agents would use this new tool as a way to prospect for leads."
Others are serious about selling. Tim Murphy and his family are leaving San Francisco and haven't decided whether to rent their Ocean Beach duplex or sell it.
He posted a price of $1.2 million (Zillow estimates the home is worth $980,776).
Testing the market
"We want to see what the market is like before we commit to selling," Murphy said in an e-mail. "We loathe the idea of interviewing real estate agents, and this service seems very intriguing. If someone offers us our asking price, we sell."
Vince Malta, who just completed his term as president of the California Association of Realtors, said he encourages the use of Zillow.
But he also said he's concerned that people like Murphy, who view the make-me-move feature as a way to test the market, will suffer.
"I think it's great that someone is able to do that," he said. "But I also really think they still need to consult with a professional. Even though they may think they're getting their dream price, the home may be undervalued."
Maybe. But as of Friday, at least for some homeowners, the chances that homes are being undervalued seem slim.
One of the highest make-me-move prices listed in San Francisco by mid-afternoon Friday belonged to a house on Union Street.
Zillow estimates the home's worth $4.35 million. The make-me-move price?
A mere $8 million.