WASHINGTON, D.C. — Real estate tech giant Zillow Group has been known to rattle Realtors on occasion, especially as it expands its iBuyer program, Zillow Offers, in which it buys homes for all-cash directly from consumers over the internet.
But the CEO of the nation’s largest real estate trade group says the company doesn’t scare him too much.
“People in the real estate community will say, ‘Are you terrified of Zillow?’ I’m not terrified of Zillow,” National Association of Realtors CEO Bob Goldberg said on Wednesday morning in an address to hundreds of Realtor association executives gathered at NAR’s Realtors Legislative Meetings & Trade Expo (colloquially known as NAR Midyear) in Washington, D.C.
Bob Goldberg, CEO of NAR. Credit: NAR
“We know the things that they’re doing. They telegraph everything because they’re a public company. Dial into one of their early earnings calls … you’ll hear what the real intentions of what those companies are. They will tell you.”
In its latest earnings report, Seattle-based Zillow Group, the operator of listing portals Zillow, Trulia, StreetEasy and RealEstate.com, posted a net loss of $67.5 million in the first quarter and announced the expansion of Zillow Offers to six additional markets.
The company’s first quarter revenue also rose 51 percent year over year, to $454.1 million, beating Zillow’s own projections as well as the Zacks Consensus Estimate.
Revenue coming into the company from Zillow Premier Agent, an online paid advertising program for real estate agents in which their name and basic information exclusively appears on Zillow online listings, has long accounted for around 70 percent of the company’s overall revenue.
But in Q1 of 2019, it fell to less than half — 47.9 percent — of Zillow Group’s total revenue, largely driven growing demand for Zillow Offers. Zillow predicts its iBuyer revenue for the second quarter will be on par with or higher than Zillow Premier Agent revenue.
The change may alarm agents who have long believed that Zillow would not bite the hand that feeds it.
But Goldberg told conference attendees he was more worried about the “mom and pop” startups or the “guys or gals in the garage” who have no connection to the real estate industry and how it currently works.
“That’s how the Zillows of the world started. That’s how the realtor.coms of the world started,” he said (NAR owns the registered trademark on the term “Realtor” and licensed the realtor.com internet domain name to News Corp.’s subsidiary Move, Inc., which currently operates the home search portal).
That concern is why NAR has invested in 80 companies and counting through its for-profit subsidiary and venture capital arm, Second Century Ventures (SCV), according to Goldberg. The companies tackle aspects of the entire real estate life cycle, from farming all the way to closing, and SCV’s aim is make them “Realtor supporters” even as they seek to change the industry, he said.
“That’s one thing I’m most proud of,” Goldberg said of the investments. Goldberg has served as NAR CEO since August 2017.
NAR, through SCV, launched a commercial real estate tech accelerator in February, expanding its years-old residential tech accelerator, REach. SCV also made a significant windfall on its early investment in online electronic document signing company DocuSign after the latter company went public in 2018.
Goldberg also touted the success of NAR’s first iOi Summit in August, noting that the trade group “had some pretty significant disrupters on stage with us” from “companies with over $6 billion in capital.”
The next iOi Summit will be August 21 in Seattle and online registration opened Tuesday. Goldberg said he expects the event will sell out as last year’s did.
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