Listings portal site Zillow is telling investors it plans to build a “housing super app” with the ambition to become “the central integrator” for buyers’ and sellers’ housing journeys.
The prize could be big. In an investor letter the company filed with the Securities and Exchange Commission at the end of last week, Zillow CEO Rich Barton wrote that the company thinks the moves, if successful, could generate $5 billion additional revenue and a 45 percent increase in earnings by the end of 2025.
Barton outlined a strategy that counts on better integrating the services the company currently offers into its listings and attracting some of the nation’s 6.1 million sellers to its platform. The company estimates around 67 percent of the nation’s homebuyers visited Zillow’s websites and apps last year, 1.4 million people – mostly buyers – initiated the process of connecting with a Zillow Premier Agent and 360,000 actually sold their home using an agent they found this way, putting the company’s buy-side market share at 5 percent nation-wide, it said.
First, the company wants to beef up its listings and make them even more engaging, adding more and more 3D tours, interactive floorplans and other “personalized, immersive content.” The company also plans to “improve” its Zestimate home valuation tool, which some commentators said showed its failings during the company’s iBuyer debacle last year. The company wound up over-paying for so many homes amid cooling demand in the fall that it was forced to shutter its iBuyer operation, called Zillow Offers.
Next, Barton said, the company wants to make it easier for prospective buyers to go through Zillow’s website to buy a house by using the ShowingTime service, which it bought last year, to “make it easier” for buyers to set up tours.
The company also wants to push more “intuitive and digitized mortgage offerings” to the millions of home-shoppers who browse its listings every year. Much of this may rely on integrating the company’s Zillow Home Loans service with its current listings, Barton said, which will help the company “keep customers engaged in our funnel.”
And, amid a record shortage of new listings, Zillow wants to offer more products and services get more sellers into its fold. Part of this, Barton wrote, will involve using things it learned from its failed Zillow Offers experience “to stand up new, more asset-light services.”
“We see expanded seller services and closing services as critical to the integration we expect to provide, and are hard at work testing and innovating on what is next,” Barton wrote.
