Real estate website Zillow plans to soon link its new-construction listings to rival Redfin to expand its own reach and broaden the range of new-construction homes for sale on Redfin.
In a joint statement, the companies said that Zillow is the most-visited real estate website and has the largest selection of new-construction communities of all U.S. real estate websites. The partnership will allow home builders to expand their marketing to Redfin’s customer base of 50 million monthly visitors.
Home builders that are partnered with Zillow will begin to see their listings and communities syndicated to Redfin in the fourth quarter, the companies said.
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Under the deal, Redfin will source non-multiple listing services (MLS), new-construction listings exclusively from Zillow. Redfin says it will still offer new-construction listings through an MLS on its site, however.
Quarterly sales slump in key sectors
The partnership comes as new construction, particularly for single-family homes, is becoming increasingly popular with buyers as inventory of existing homes has declined sharply. It was also announced just days before both companies reported second-quarter results with slumping sales in key sectors.
As Kiplinger recently reported, single-family construction has improved this year, which is “a sign that builders are scaling up development in response to both more favorable conditions and a steady stream of buyers giving up on the existing home market, where inventories are slim.”
Inventory of existing homes on the market is down to a record low, according to the article, “and it’s unlikely to improve in coming months, as more homeowners choose to stay put rather than list their homes.”
That is borne out in a statement by Adam Wiener, Redfin president of real estate operations, in announcing the Zillow partnership.
“With buyer demand outpacing the supply of existing homes for sale, Redfin's home-buying customers are increasingly turning to new construction,” Wiener said. The deal is a win-win-win for customers, agents and the builders who advertise with Zillow, who will be able to reach homebuyers on Redfin, he added.
On Aug. 3, Redfin reported a second-quarter net loss of $27.4 million, compared to a net loss of $78.1 million in the second quarter of 2022. Total revenue slid 21%, to $275.6 million. The company’s real estate services division’s gross profit fell 24%, to $56.2 million over the same period last year.
Commenting on the results, Redfin CEO Glenn Kelman said that, in a declining market, Redfin saw a year-over-year, second-quarter improvement in net income.
“We lost market share due to one-time setbacks from agent layoffs and the closure of RedfinNow, but we expect to return to quarter-over-quarter gains in the second half, as Redfin.com has been competing better for traffic,” Kelman said.
On Aug. 2, Zillow posted second-quarter sales of $506 million, up from $504 million in the same prior year period. The company posted a net loss of $35 million in second-quarter 2023, from net income of $8 million in the prior-year quarter.
Zillow’s residential revenue declined 3% in the quarter to $380 million, and mortgages revenue dropped 17% to $24 million.
Rentals revenue grew 28% year over year to $91 million due to continued strong traffic and growth in multifamily properties, Zillow said.
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