And just like that, a pair of rivals in the real estate portal sector are teaming up.
As they prepare to release their second quarter earnings reports, Zillow and Redfin announced a partnership to connect home builders with buyers in the market. The collaboration will make it so Zillow’s selection of new-construction listings can be automatically syndicated to Redfin sometime during the fourth quarter of 2023.
“The partnership with Redfin extends this unique and valuable resource to a wider audience,” said Owen Gehrett, vice president and general manager of New Construction at Zillow. “It benefits home builders by expanding their reach to additional homebuyers while empowering home shoppers to make confident and informed decisions, regardless of where they choose to shop.”
The partnership emerges against the backdrop of a housing market that has struggled with a lagging supply of existing homes for sale. To a large degree, new construction has started filling some of that gap as it has gained traction in recent months.
In June 2023, new single-family home sales were up 23.8% from a year ago.
Zillow touted its “standout platform” that allows home builders to highlight their communities and connect with potential buyers. Company executives pointed out Zillow’s “Community” pages as a resource that helps buyers understand the benefits of a new-construction home, among other information.
The collaboration will allow home builders to market their new-construction communities to Redfin consumers.
Redfin will be able source non-MLS new-construction listings exclusively from Zillow when the partnership launches. New-construction listings available through an MLS will still be discoverable on Redfin.
Redfin executives claimed in a Tuesday statement that the partnership will provide a new revenue opportunity for the company while allowing them to “focus on what we do best, helping customers buy and sell homes with local Redfin agents.”
“With buyer demand outpacing the supply of existing homes for sale, Redfin’s home-buying customers are increasingly turning to new construction,” said Adam Wiener, Redfin’s president of real estate operations. “Our Zillow partnership will help our customers discover more homes that fit their criteria.”
Wiener characterized the collaboration as a “win-win-win” for Redfin’s customers, agents and builders who advertise with Zillow.
Time will tell how this collaboration between the two portal giants could affect their balance sheets. Zillow and Redfin are slated to release reports outlining how they fared last quarter, as each company has already had a mix of results in the 2023 market.
Both companies opened the year with a dip in revenue. Zillow tallied a 13% decline in revenue—it earned $469 million in Q1—while Redfin posted a 45% drop in revenue year-over-year during the first three months of 2023.
However, the chief executives of both companies struck optimistic tones during their respective calls with investors during the spring.
“Between the end of the third quarter of 2022 and the first quarter of 2023, our competitive position has significantly improved,” said Redfin CEO Glenn Kelman during the call as he highlighted the company’s progress in cutting $295 million in debt.
Market headwinds forced Redfin to reassess its gameplan last year. However, Kelman remained confident that the company would turn a corner this year following several adjustments it made in previous quarters.
Despite drops in revenue during the first quarter, Zillow has outperformed the slower housing market. At the same time, the real estate behemoth has continued to roll out one announcement after another about new tools or resources that it has invested in.
Amid the continued pursuit of its long-planned “super app,” Zillow has built a plugin for ChatGPT that it launched in select markets.
The company also rolled out its collaborative product with former-iBuying rival Opendoor, allowing homeowners in select areas to request a cash offer from the iBuyer and a market-price estimate to sell on the open market with a local Zillow Premier Agent partner on Zillow.