Inside the nation’s largest most profitable brokerage company, 3 compelling real estate companies + the market heading into 2023
In addition to the articles, here are a few items we are reading from across the internet.
Houwzer, launched in 2015 and which provides discount brokerage services to consumers (such as a flat $5,000 listing fee to sellers), has acquired Trelora, a discount broker headquartered in Denver. Discount brokers have come and gone in the industry, and the promise remains big to those who attempt it. Philadelphia-based Houwzer has slowly gained traction over the years, while adding alternative financing services. It is showing promise as it continues to grow.
Vacation-rental owners across the U.S. report dropping demand for their properties, as the supply of these rentals have skyrocketed. According to data from firm AirDNA, the number of available short-term rentals jumped 23.3 percent from October 2021 to October 2022. This has caused an average of 6 percent fewer nights booked per property in October 2022 compared the month a year previous. With interest rates at all-time lows as the pandemic began to wane, more buyers purchased homes with the intent of renting them as short-term rentals. The market has experienced a flood of supply. In addition, those looking to rent have begun looking farther afield as long-range travel has picked up after the pandemic.
MLSs are getting more sophisticated and Bright MLS, the nation’s second largest MLS, has hired a chief data officer, a first for any MLS. In 2022, it also hired a chief economist, another first for an MLS. Data and research present to valuable revenue opportunities for MLSs – we expect more news like this to come out of the MLS world, especially among the nation’s largest and savviest.
With the acquisition of VRX Media, Zillow Group reveals the shape of how its much talked about “Super App” will work for agents. VRX provides marketing technology that helps listing agents build marketing for their listings, revealing how Zillow’s ShowingTime+ offering will include block-and-tackle marketing tools and services for agents.
Ryan Gorman, who has been CEO of Coldwell Banker and the nation’s second largest brokerage Anywhere Advisors since 2019, is stepping down from his role. Sue Yannaccone, who oversees Anywhere Real Estate’s brands, will take over his duties. Gorman was a fast-rising leader at the large real estate holding company. He has not indicated his next move, but, as he is in the prime of his career, we expect to see him again. As for Anywhere, it continues its steady track record of solid performance in recent quarters under CEO Ryan Schneider.
CoStar Group has merged Homesnap into Homes.com, and relaunched the latter portal as its real estate retail marketplace. The move establishes CoStar’s play as a competitor in the real estate portal space. It will compete by focusing on advertising properties, rather than agents, says CEO Andy Florance. It will feature listing agents prominently with each listing. The firm has not announced how agents will be able to advertise on Homes.com yet, but its well-trod playbook provides a potential playbook. See the 2022 Swanepoel Trends Report chapter on CoStar Group: “Inside Residential Real Estate’s New Heavyweight.”
With its stock trading below $1 for over 30 days, Offerpad, the nation’s second largest iBuyer, was warned by the New York Stock Exchange that it was in danger of being delisted from the exchange. The company says it is taking steps to increase its share value, which has plummeted from nearly $7 per share in January to approximately 60 cents in mid-December. IBuying is on trial, and may be on its last legs.
Opendoor, the nation’s largest iBuyer who lost $928 million in the third quarter, has announced a significant leadership reshuffle. Co-Founder and CEO Eric Wu, the seventh most powerful person in real estate (according to the 2022 SP 200), transitioned to president of the company’s marketplace division. President Andrew Low Ah Kee is leaving the company. Carrie Wheeler, the firm’s chief financial officer, will take over as Opendoor CEO. This news along with Redfin backing out of iBuying and Offerpad potentially getting delisted, reveals the extent to which the iBuying business model is taking a hit. If any company will make it through, it will likely be Opendoor, as it is the closest to achieving the scale at which iBuying benefits really show.
Venture firm Fifth Wall, an investor in alternative finance companies Opendoor and Flyhomes among other residential real estate tech firm, has raised an $886 million fund, its third. Investment has cooled relatively in recent months in real estate, but as the market turns, investors looking for a deal will have ample opportunities to investigate. Investors and acquirers are on the hunt.
The Housing Market Index, which gauges economists’ outlook on the housing market, dropped to 33 (out of 100) in November, lower than it has been since the early 2010s. Rising interest rates have contributed to the slowdown, which reduces buyer demand and lowers transaction counts. Data suggest that the market could stabilize be the end of 2023 and housing settle into a new normal: not too hot, not too cool.
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