As homeownership becomes an elusive dream for a growing number of Americans, real estate portals are bolstering their rental search capabilities.
Move Inc., the parent company of realtor.com and Doorsteps.com, announced this morning that starting January 1 both sites will be working exclusively with San Francisco-based Apartment List to power their apartment community listings. Apartment List takes over providing realtor.com with rental listings from CoStar’s Apartments.com. (CoStar’s attempted acquisition of ForRent.com, meanwhile, was recently halted by the government).
Apartment List, which has both multifamily rental communities and individual listings, attracts 5 million unique users every month in 40 cities nationwide while realtor.com and Doorsteps.com collectively attract 5 million renters every month.
Apartment List currently counts 3.8 million rental listings, a number that grew 50 percent this year. It is expecting its share of U.S. leases to grow by 285 percent in 2018. The portal launched to consumers in 2014 and linked up with Homes.com in September to provide it with rental listings. Last month it also announced a partnership with Facebook Marketplace.
Ryan O’Hara, CEO of Move, said that Apartment List, which asks renters fill out a detailed questionnaire to get closer to their preferences, “is changing how people search for apartments by offering a highly customized experience that is built on renters’ personal priorities.”
Apartment List CEO John Kobs elaborated further:
“Renting is a series of trade-offs; we ask renters if you want a short commute, how short? If you commuted five minutes more and you paid $300 less (a month), would you be interested, for instance? To me the future is customizing renter preferences only showing them what they want.”
Apartment List only gets paid (by the landlord) when a renter finds their home on the platform. Today 1 out of every 183 renters finds a home on Apartment List, and Kobs expects that next year 1 in 64 will find a home using the platfom. The company increased its number of signed leases this year by 2.3 times over 2016.
“Ryan and I both share a vision that there is an opportunity for a business like Apartment List to reinvent the way consumers find their rental home. I think realtor.com has been anticipating that someone would emerge with a business model that would align with where they want to go,” said Kobs, who added that the partnership with Move is a “rite of passage” for his company, giving it an ability to “cast a wider net.”
While Kobs believes the American dream of owning a home is “alive and well,” this goal is being delayed for a number of young people, he said. In a recent survey by Apartment List of around 50,000 renters, 70 percent of millennials said they had less than $1,000 saved for a down payment, so he is seeing the market for renters as a strong one for the foreseeable future.
“Thirty seven percent of the U.S. population rent and we fully anticipate that will continue to grow as a percentage as this next generation optimizes flexibility,” Kobs said.
Realtor.com senior director of product, Todd Callow agreed that the home journey has been delayed for many buyers, with the median age of the first time buyer standing at around 32.
“It matters a lot to be there for people across their real estate journey, which starts with renting then thinking about buying,” Callow said.
Thanks in part to today’s deal, Apartment List intends on hiring an additional 100 employees in 2018, according to Kobs, whose company raised $30 million at the end of 2016.
Partnerships such as those with Facebook, realtor.com and Homes.com will continue to “compound user growth,” Kobs said. “The renters’ category is one of last remaining ones that has not been won by a modern startup — we want to win the renters’ category.”
