Zillow, a prominent real estate website, is planning to connect its new-construction listings with rival platform Redfin, in an effort to expand its reach and provide a wider range of new homes for sale on Redfin. Highlighting that Zillow is the most popular real estate website in terms of visitors and offers the largest selection of new-construction communities among all U.S. real estate websites, the partnership aims to allow home builders to market their properties to Redfin’s impressive customer base of 50 million monthly visitors. The collaboration will see Zillow’s partnered home builders having their listings and communities syndicated on Redfin starting in the fourth quarter. Notably, Redfin will exclusively source new-construction listings from Zillow, although it will continue to feature these listings via multiple listing services (MLS) on its own platform.
This partnership comes at a time when new construction is gaining popularity among buyers, especially for single-family homes, as inventory of existing homes has drastically declined. Both Zillow and Redfin reported a slump in sales across key sectors in their second-quarter results. Kiplinger’s recent article highlights that the improvement in single-family construction this year indicates that builders are responding to favorable conditions and a consistent stream of buyers who are giving up on the existing home market, where inventory is scarce. Adam Wiener, Redfin’s president of real estate operations, noted that with a higher demand for homes compared to the availability of existing homes for sale, Redfin’s customers are increasingly turning to new construction. He believes that the partnership with Zillow will benefit customers, agents, and builders who advertise on Zillow by enabling them to reach potential homebuyers on Redfin.
Redfin reported a net loss of $27.4 million in the second quarter and a 21% decrease in total revenue to $275.6 million. The company’s real estate services division also experienced a 24% decline in gross profit to $56.2 million compared to the same period last year. Redfin’s CEO, Glenn Kelman, acknowledged the challenges faced in a declining market but expressed confidence in a return to growth in the second half of the year, citing improved competition for website traffic on Redfin.com following setbacks such as agent layoffs and the closure of RedfinNow.
In contrast, Zillow’s second-quarter sales remained steady at $506 million compared to the previous year. However, the company reported a net loss of $35 million, a notable decrease from the $8 million net income recorded in the second quarter of the prior year. Residential revenue for Zillow declined by 3% to $380 million, while mortgage revenue experienced a 17% drop to $24 million. On the other hand, rentals revenue demonstrated growth, with a 28% year-over-year increase to $91 million, attributed to the sustained high volume of website traffic and the expansion of multifamily properties.