Will Zillow Put Real Estate Agents Out of Business?

It would be an understatement to say that Zillow® has many real estate agents nervous about their future.  It’s not just Zillow® though, it’s Amazon, big banks, and dozens and dozens of new real estate start-ups and changing business models.

A true dysfunctional family…

The most common name that comes up in real estate agent circles when discussing the impact of the internet on the real estate profession topic is Zillow®, and usually in the context of “the enemy“, so to speak.  It seems to me the biggest fear among agents about Zillow® is that they want to eliminate real estate agents and instead give consumers a marketplace to buy and sell homes without the need for an agent.  What is most interesting to me about this, is that Zillow® made something like nearly $1 Billion last year from selling leads to, guess who? Yep, real estate agents. So, the group that is afraid Zillow® is gunning for them, is lining their coffers with cash to do so, see the dysfunction?  To be clear, I’m not blaming agents here for doing business with Zillow®, nor am I saying what Zillow® is doing is wrong, I’m just commenting on what I see and find it rather fascinating.

But wait there’s more…

Going back to Zillow® and all those leads they sell to agents, what makes it even more interesting is the fact that Zillow® is able to generate all those leads as a result of getting more than 1 million real estate agents in the U.S. to send their listings to them and give them permission to market them.  Hmm…

Zillow Under Investigation By CFPB Over Co-Marketing Program With Real Estate Agents

Zillow, the behemoth real estate search site, revealed in it’s Form 10-Q filed with the Securities and Exchange Commission earlier this month for first quarter 2017, that the Consumer Finance Protection Bureau (CFPB) is investigating some practices by Zillow.  According to the filing, what is under review is their co-marketing program in which the CFPB is alleging that Zillow violated parts of both RESPA as well as the Consumer Financial Protection Act.  The complete Form 10-Q can be viewed here.  On page 40 (outlined in red by me) is the section where Zillow makes this disclosure, and I have pasted that section of the report below as well (the emphasis and color have been done by me).

Excerpt from Zillow’s 10-Q –
“In April 2017, we received a Civil Investigative Demand from the Consumer Financial Protection Bureau (“CFPB”) requesting information related to our March 2017 response to the CFPB’s February 2017 Notice and Opportunity to Respond and Advise (“NORA”) letter. The NORA letter notified us that the CFPB’s Office of Enforcement is considering whether to recommend that the CFPB take legal action against us, alleging that we violated Section 8 of the Real Estate Settlement Procedures Act (“RESPA”) and Section 1036 of the Consumer Financial Protection Act. The purpose of a NORA letter is to provide a party being investigated an opportunity to present its position to the CFPB before an enforcement action may be recommended or commenced. This notice stems from an inquiry that commenced in 2015 when we received and responded to an initial Civil Investigative Demand from the CFPB containing a broad request for information. We believe our response to the NORA letter addresses the CFPB’s concerns related to our co-marketing program under which a lender pays us to appear in advertising alongside a real estate agent. We are continuing to cooperate with the CFPB in connection with their most recent request for information. We continue to believe that our acts and practices are lawful and that our co-marketing program allows lenders and agents to comply with RESPA. Should the CFPB commence an action against us, it may seek restitution, civil monetary penalties, injunctive relief or other corrective action. We cannot provide assurance that the CFPB will not ultimately commence a legal action against us in this matter, nor are we able to predict the likely outcome of the investigation into this matter. We have not recorded an accrual related to this matter as of March 31, 2017 or December 31, 2016, as we do not believe a loss is probable. There is a reasonable possibility that a loss may be incurred; however, the possible loss or range of loss is not estimable.”

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Continue reading “Zillow Under Investigation By CFPB Over Co-Marketing Program With Real Estate Agents

Zillow says St Louis Home Prices Have Not Hit Bottom;   Predicting further declines

dennis-norman-st-louis-realtor-

St Louis home prices have not hit bottom yet, according to a report just released this morning by Zillow, which shows that St. Louis home prices fell by 4.0 percent in the second quarter of 2012 from the year before.  St Louis home prices are predicted by Zillow to fall another 2.6 percent in the coming year.  This is in pretty sharp contrast to the report on U.S. home prices which shows that they were up in the 2nd quarter of 2012 from the year before and are expected to rise 1.1 percent in the coming year. Continue reading “Zillow says St Louis Home Prices Have Not Hit Bottom;   Predicting further declines

Survey shows economists largely in agreement that home prices will hit bottom this year

dennis-norman-st-louis-realtor-A survey conducted by Zillow compiled from 114 responses by a diverse group of economists, real estate experts and market strategists, reveals that economists expect home prices to decline only slightly in 2012 (0.4 percent for the year) and then be on the rise. According to Zillow, this is the first time the individual economists surveyed were largely in agreement on where U.S. home prices are headed, signaling that a true bottom may be imminent. Continue reading “Survey shows economists largely in agreement that home prices will hit bottom this year

St Louis home values fall in April;  St. Louis rents on the rise

Rents Rise in Three-Quarters of Markets, According to April Zillow Real Estate Market Reports

National home values rose for the second month in a row, climbing 0.7 percent from March to a Zillow Home Value Index of $147,300. This is the largest monthly increase in home values since January 2006, when they rose 0.8 percent, according to the April Zillow® Real Estate Market Reports.

Rents also rose from March to April, increasing 1.6 percent, according to the Zillow Rent Index. Rents rose in 78 percent of the 178 markets covered by Zillow. Continue reading “St Louis home values fall in April;  St. Louis rents on the rise

St Louis rents on the rise while home prices on the decline

st-louis-realtor-dennis-norman-hot-rental-market-A report released today by Zillow shows that median rents rose 6.1 percent in St Louis to $1,085 from January 2011 to January 2012 while, during the same period, home prices fell 6.9 percent to $120,300. According to the report, over two-thirds (69.2 percent) of the metro areas covered saw year-over-year gains in rents but only 7.3 percent of the metros saw home values rise during the same period. Continue reading “St Louis rents on the rise while home prices on the decline

Homeowners in U.S. to lose nearly $700 Billion in value during 2011;  Is the worst of it over?

Dennis Norman, St Louis Realtor - U.S. Home Values - Zillow ReportWhile losing $700 Billion in value in U.S. homes in a year sounds horrible, the good news is, if we end this year around this number the total loss in home values for 2011 will be smaller than the prior four years! This information is from the newly released Zillow Real Estate Market Reports, which also predicts that nine metro areas will see gains in home values this year once the final numbers are in! With all this “good” news, we have to ask ourselves…is the worst of the real estate market crash over? I think the answer is yes, at least when it comes to the housing market. Continue reading “Homeowners in U.S. to lose nearly $700 Billion in value during 2011;  Is the worst of it over?

Almost half of prospective home buyers unrealistic about home value appreciation

Dennis Norman, St Louis REALTOR - Home price appreciationYou would think after what we have seen happen in the housing market during the past 5 years, especially in the area of falling home prices, that home buyers today would not have lofty expectations about a home they buy appreciating, but apparently many do. According to a recent survey Zillow, 42 percent of prospective home buyers believe home prices typically appreciate by 7 percent a year. Continue reading “Almost half of prospective home buyers unrealistic about home value appreciation

Homeowners that bought since 2006 overpricing the most when they resell

St. Louis REALTOR, Dennis NormanA report just released by Zillow.com shows that current home sellers who purchased their homes “after the bubble” (2007 or after) are overpricing their homes by more than sellers that bought during the bubble (2002-2006) or before the bubble (pre-2002). According to the report, current sellers that bought post-bubble are overpricing their homes by an average of 14.1 percent, compared with sellers that bought during the bubble that are overpricing their homes by an average of 9.3 percent and the sellers that purchased pre-bubble are overpricing by 11.6 percent. Hmm, notice a theme? On average, ALL sellers are overpricing their homes in the current market. Continue reading “Homeowners that bought since 2006 overpricing the most when they resell

Zillow Report: U.S. Homes Set to Lose $1.7 Trillion in Value During 2010

Report by Zillow estimates that U.S. Homes have now lost $9 Tillion in value since Market Peak

Dennis Norman St Louis

U.S. homes are expected to lose more than $1.7 trillion in value during 2010, which is 63 percent more than the $1 trillion lost in 2009, according to a report released by Zillow.com. That brings the total value lost since the market peaked in June 2006 to $9 trillion.

Continue reading “Zillow Report: U.S. Homes Set to Lose $1.7 Trillion in Value During 2010

Current Housing Market Rivals Depression-Era Price Declines according to Zillow Report

Percentage of Homeowners Underwater Reaches New Peak; Length and Depth of Housing Downturn Approach Depression-Era Declines According to Zillow® Real Estate Market Reports for 3rd Quarter 2010

The United States housing market continued its long decline in the third quarter with home values falling for the 17th consecutive quarter, according to Zillow Real Estate Market Reports. With home values 25 percent below their June 2006 peak, the current housing downturn is approaching Great Depression-era declines, when home values fell 25.9 percent in five years. Continue reading “Current Housing Market Rivals Depression-Era Price Declines according to Zillow Report

Homeowners becoming more pessimistic about housing market

Dennis Norman St Louis

Dennis Norman

1 in 3 Think Worst Is Yet to Come, While 38% Think Local Home Values Have Reached Bottom

According to the second quarter 2010 Zillow Homeowner Confidence Survey, one-third (33 percent) of homeowners feel home values in their local market have not reached bottom, while 38 percent believe their market has in fact hit bottom. Continue reading “Homeowners becoming more pessimistic about housing market

U.S. Home Values Fall In 2nd Quarter; Negative Equity Declines Though

Dennis Norman

A report just issued by Zillow shows that home values in the United States continued to decline in the second quarter of 2010, with the Zillow Home Value Index falling 3.2 percent year-over-year and 0.6 percent from the first quarter to $182,500. The national rate of decline decelerated from the first quarter, marking the second consecutive quarter of slowing declines. Continue reading “U.S. Home Values Fall In 2nd Quarter; Negative Equity Declines Though

Fewer home owners are underwater on their homes according to Zillow report

Dennis Norman
Dennis Norman

The percent of American home owners with mortgages in a negative equity position fell to 21 percent in the third quarter of this year, down from 23 percent in the second quarter, as home values stabilized in the short term and more underwater homeowners lost their homes to foreclosure, according to the third quarter Zillow Real Estate Market Reports.

Year-over-year home values in the U.S. declined for the 11th consecutive quarter, falling 6.9 percent to a Zillow Home Value Index of $190,400. However, the rate of year-over-year decline shrank for the third quarter in a row, meaning home values did not decline as dramatically year-over-year in the third quarter as they did in the second or first quarters. Continue reading “Fewer home owners are underwater on their homes according to Zillow report

Almost 1 in 5 prospective homebuyers say extending $8,000 tax credit to 2010 would be primary influence on their decision to buy

By: Dennis Norman ZILLOW.COM LOGO

Nearly one in five (18 percent) prospective first-time homebuyers said extending the $8,000 tax credit would be the primary influence on their decision to buy a home before the end of 2010, according to a Zillow survey. That would equate to 334,000 buyers from Dec. 1, 2009 to Nov. 30, 2010 – a likely time period for an extension, according to additional analysis.

Zillow queried adults who qualify as a first-time homebuyer, asking them if an extension of the tax credit would influence their plans to buy a home before the end of 2010. If the credit were extended, of those who intend to buy a home, 18 percent called the credit the “primary influence” in their decision, 25 percent said it would be a “significant influence,” and 27 percent said the credit would have “some” influence on any home buying decision. Thirty-one percent said it would have no influence on their decision. Continue reading “Almost 1 in 5 prospective homebuyers say extending $8,000 tax credit to 2010 would be primary influence on their decision to buy