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$Z earnings
I scrolled straight to page 5 "Homes segment results." That's what matters over the next decade.
I scrolled straight to page 5 "Homes segment results." That's what matters over the next decade.
All Homes segment costs were down sequentially - lower home acquisition costs were macro-driven - renovation, holding, and selling were durable improvements.
Squeezing costs down will lead to higher margins -> better offers -> more volume - flywheel at work.
Squeezing costs down will lead to higher margins -> better offers -> more volume - flywheel at work.
Biggest takeaway - Zillow is heavily counting on leveraging their large audience to lower their CAC. Lower CAC spins the flywheel of higher margins, better offers, and more volume even faster.
The Zestimate will now be a living real offer on your home. This hopes to turn casual browsers into real customers. If it works, Zillow will have a real advantage
Opendoor, OfferPad, etc. will lower their selling costs at scale, too. CAC is a different story.
Opendoor, OfferPad, etc. will lower their selling costs at scale, too. CAC is a different story.
Zillow 1.0 - media focused
Zillow 2.0 - transaction focused
Barton calls it "one-click trade-in nirvana"
Zillow 2.0 - transaction focused
Barton calls it "one-click trade-in nirvana"
It's just beginning, but the writing is on the wall. When you weigh the headwinds against the tailwinds, adding internet dynamics to home sales seems highly likely. And Zillow's brand gives it a good shot at being a winner.
