Zillow and Redfin team up to connect homebuyers with homebuilders.

Zillow and Redfin team up to connect homebuyers with homebuilders.

Zillow and Redfin Join Forces to Expand New-Construction Listings

Real estate website Zillow

Real estate website Zillow has announced a partnership with rival company Redfin that will link their new-construction listings. This collaboration will not only expand Zillow’s reach but also provide Redfin with a broader range of new-construction homes for sale. As the most visited real estate website, Zillow boasts the largest selection of new-construction communities among all U.S. real estate websites. This partnership will enable home builders to market their listings to Redfin’s customer base, which consists of approximately 50 million monthly visitors.

The companies have revealed that Zillow’s partnered home builders will have their listings and communities syndicated to Redfin starting in the fourth quarter. Under the agreement, Redfin will exclusively source non-multiple listing services (MLS) new-construction listings from Zillow, while still offering new-construction listings through an MLS on its own website.

Meeting the Increasing Demand for New Construction

This partnership comes at a time when new construction is growing in popularity, particularly for single-family homes. With the inventory of existing homes declining sharply, buyers are looking towards new-construction options. As a result, builders are scaling up development to meet these favorable market conditions and the steady demand from buyers who are unable to find suitable existing homes.

The current inventory of existing homes on the market has reached a record low, indicating a trend of homeowners staying put rather than listing their properties. This scarcity has prompted a surge in interest in new-construction homes. Redfin’s president of real estate operations, Adam Wiener, acknowledges this shift in buyer preferences and sees the Zillow partnership as a win-win-win for customers, agents, and builders. The collaboration will allow Zillow’s advertisers to reach potential homebuyers on Redfin, expanding their audience and potential sales.

Mixed Q2 Results for Zillow and Redfin

Both Zillow and Redfin recently reported their second-quarter results, which revealed sales slumps in key sectors. On August 3, Redfin reported a net loss of $27.4 million for the second quarter, an improvement from a net loss of $78.1 million during the same period in 2022. Total revenue declined by 21%, amounting to $275.6 million. The real estate services division’s gross profit saw a 24% decrease to $56.2 million compared to the previous year.

Redfin CEO Glenn Kelman attributed the decline in market share to one-time setbacks caused by agent layoffs and the closure of RedfinNow. However, he expressed optimism for the second half of the year, expecting quarter-over-quarter gains as Redfin.com competes better for traffic.

On August 2, Zillow posted second-quarter sales of $506 million, a slight increase from $504 million in the same period the previous year. However, the company reported a net loss of $35 million for the second quarter of 2023, compared to net income of $8 million during the prior-year quarter. Residential revenue for Zillow declined by 3% to $380 million, while mortgage revenue dropped by 17% to $24 million. Rentals revenue, on the other hand, experienced a substantial 28% year-over-year growth to $91 million due to the continued success of multifamily properties and strong traffic.

Despite these mixed results, the partnership between Zillow and Redfin highlights their determination to adapt to the changing real estate market and meet the evolving demands of buyers.