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Zillow…The Disruption Continues

I loved Zillow $Z (great ticker guys) from day one. Here is a post entitled ‘The Summer of Zillow‘ back in 2006.

Now they are a public Company and deservedly so. I don’t know about the valuation. It only mattered in the very first round of capital. Now you can rent it. Get it? Amazon $AMAZN was surely ‘overvalued‘ in 1997 on their IPO day at $430 million. They had to do ‘death spiral’ convertible notes in 2000 to survive. Let me just say…thank god.

We should be embracing the day and the possibilities, but the media has chosen to talk about ‘bubbles’. Zillow is not a bubble stock. It’s a proxy for the disruption that entrepreneurs feel was needed in the real estate market.

Take an hour off from freaking out at the valuation. Roll up your sleeves and solve a problem.

  • CoryS

    If the premise is “taking the real estate agent out of the equation”, then interesting, but if it is “a better way for agents to advertise” (see WSJ write up), then not touching a big enough market. 

    • howardlindzon

      if thats the case they will get punished by the market itself.

  • Anonymous

    The main thing Zillow has done, in my opinion, is to make general real estate trends available to the consumer in each consumer’s local market which MLS has attempted to shroud for nearly half a century. It still, however, cannot identify my house nor properly calculate its fair value, nor even get the number of bedrooms and square footage right. It can, however, within 2-3% of aggregate value, tell you what the local trend has been for the last 3 months to 10 years. It can also shortcut a lot of hunting for distressed areas (which investors like myself am interested in). Because I have partners with experience in those matters, Zillow is an educational ramp that clears up a lot of uncertainty in making investment decisions.

    What Zillow could do, if the fullest extent of its disruption is realized, is complete the process of disintermediation in the residential real estate business the way that discount and direct access brokers changed the securities business forever. Could you imagine buying a home online without having to hire your relative (the local relatively unskilled real estate broker)? I believe the day is coming when the real estate broker will be as obsolete as the retail securities broker is today. Hopefully Zillow management, or some future entrepreneur who will buy or compete with Zillow will make this happen. With the collapse of home prices what better time than today is there to eliminate the 6% of a home price that you pay to a gatekeeper? If Zillow can accomplish that feat, it could justify a tidy multiple. Only time will tell.

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  • Cape Coral Rental Management

    Zillow is one best for marketing sites. But for past few months and years the other viewers from zillow is moving back into craiglist.

  • Cape Coral Properties

    Zillow is one best site. Home selling, home buyes it is one of the choice. We should be embracing the day and the possibilities.

  • Foreclosures

    Another tidbit from the amended S-1, noted by Zillow paid $1 million and 700,000 shares of common stock to acquire Postlets in March.


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