Despite the unemployment rate being at 8.9%, its lowest level since April 2009, the housing market does not seem to be making a quick recovery. According to the National Association of Realtors, the median U.S. home price fell to $158,800, its lowest since 2002, in January. The median price has fallen 13% since June. Foreclosed homes continued to add to the inventory, pushing prices downward. According to Lender Processing Services Inc., the foreclosure inventory in the country rose to a record 2.2 million in January. Housing starts are also being impacted. According to Commerce Department data, housing starts in the country were at their slowest pace since April 2009, and building permits slumped to a record low. Beginning home construction fell 22.5% to a 479,000 annual rate, making it the biggest reduction since March 1984.
Online real estate agent Move’s (NASDAQ:MOVE) Q4 revenues fell to $48.9 million from $49.6 million reported a year ago. However, the company managed to break even compared with a loss of $0.03 per share reported in the same quarter last year. For the full year, it reported revenues of $197.5 million, compared to $212.0 million last year. Net loss grew to $0.13 per share from $0.08 per share in 2009.
During the year, the company remained the industry leader in unique users and total engagement. Last year, on a monthly basis, its network attracted an average of 11 million unique users who spent more than an average of 224 million minutes monthly online. Visitors viewed nearly 4.4 billion total pages in 2010, more than the next six competitors combined.
For the current quarter, Move expects revenues of $48.0 million–$49.0 million with an adjusted EBITDA margin of 11%.
Move’s New Solutions
Recently, the company launched MortgageMatch.com, a new offering developed to give first-time buyers or refinancing owners the tools needed to find and prequalify for the right loan. Within the first month of the launch, the tool had been used by 30,000 prospective home buyers to seek information on mortgage terms, payments, rates, and qualifications.
Move also tied up with AOL to provided AOL Real Estate search, which delivers an ad network for agents and advertisers to expand their reach and visibility to AOL.com’s monthly visitors. The agreement helps AOL’s users to get access to accurate property listings, neighborhood and school content, and connections to real estate experts. Move may well be AOL’s next major acquisition after TechCrunch and Huffington Post.
The stock is trading at $2.10 with a market capitalization of $332.9 million. It touched a 52-week high of $2.89 in December of last year.
For Q4, ZipRealty’s (NASDAQ:ZIPR) revenues fell 20% over the year to $27.0 million. Loss for the quarter increased significantly to $0.20 per share from $0.11 per share reported a year ago.
The total value of real estate transactions closed declined to $1.1 billion compared with $1.5 billion a year ago. The total number of transactions closed in the quarter fell to 4,930 from 6,355, translating to a 0.8% decrease in net transaction revenue per close to $5,155 from $5,199 in the previous year.
For the full year, revenues fell 3.6% over the year to $118.7 million, and full-year adjusted EBITDA loss of $9.9 million was higher than previous year’s loss of $7.3 million.
ZipRealty’s Focus on Technology, Marketing, and Local Markets
ZipRealty is focusing on leveraging its strengths in customer service, technology, and online marketing capabilities to grow in its most lucrative markets. As part of this focus, the company is shutting operations in 11 cities, including Fresno/Central Valley, Charlotte, Naples, Jacksonville, Miami, Palm Beach, Tampa, Hartford, Minneapolis, Virginia Beach, and Tucson. The move is expected to save ZipRealty $20 million annually. These cities contributed 13% of its revenues last year and were not profitable operations. In Tucson, however, the company has tied up with Long Realty Company, a local real estate services provider with more than 1,400 real estate associates and 37 local offices. The agreement gives ZipRealty’s agents the opportunity to join Long Realty and enables all local agents to have access to ZipRealty’s technology resources and online presence.
Among other changes planned during the year, the company will open the ZipRealty.com website so that more listings data, content, and tools will be available to users without registration. They are also reorienting their marketing approach to emphasize personalized service, technology and experienced local agents. To continue managing costs, they are also reducing sales support and administrative workforce by 25%.
The stock is trading at $2.82 with a market capitalization of $57.6 million. It reached a 52-week high of $5.38 in March of last year.
Meanwhile, private player Trulia finally turned profitable after six years of loss-making operations. The company remained silent about numbers but did mention that it doubled revenues in the past year and managed to turn a profit. Traffic to its site grew more than 50% from last year to a monthly average of 9 million unique visitors with more than 570 million property views. However, a comScore chart on Techcrunch.com for September last year shows Trulia’s traffic to be still much smaller than traffic to Zillow and Yahoo! Real Estate.
Trulia’s mobile initiatives have fared well over the past year. The company recorded 400% growth in mobile searches, which accounted for more than 10% of overall traffic and 15% of weekend traffic. Its mobile app allows users to rate local areas on any mobile device, and features the only enhanced, interactive Web map search results for iPhone and iPod touch users in the industry.
Trulia Acquires Movity
Trulia also made its first ever acquisition recently by buying out Movity, a startup focused on surfacing geodata to help new movers make better decisions and creator of social check-in tracker weeplaces.com. Movity’s offering helps gives users information on safety, the neighborhood and reviews about the house they may be evaluating moving to. Trulia is hoping to use Movity’s engineering skills and visualization specialists to complement its real estate offerings. Movity was founded last year with $1.3 million in funding.
Another real estate services player, Zillow, turned five years old recently. The company, a provider of real estate estimates called Zestimates, reported a record 15.7 million unique visitors in January of this year, getting access to over 95 million property listings.
Besides the Zestimates, the company also operates Zillow Mortgage Marketplace. The site provides a free, open and transparent lending marketplace, where borrowers connect with lenders to find loans and get the best mortgage rates. As of December of last year, the site was processing close to 300,000 consumer loan requests each month, making it one of their fastest-growing businesses.
Zillow still makes most of its money from advertising. The company remained tight-lipped about its financials, but it claims to have turned profitable last September on revenues that are increasing 50% annually. Last year, Zillow was looking toward an IPO in 2011.
Zillow’s Mobile Initiative
Zillow’s mobile offerings have also received positive reactions from the market. Its iPad and iPhone app was rated as the #1 real estate app last year. It also has an app on the Android platform. According to the company, people now view homes 20,000 times an hour on Zillow mobile. During the recent holiday season, on Thanksgiving and Christmas, Zillow Mobile accounted for 30% and 33% of total Zillow traffic respectively, with more than one million views over the Christmas weekend.
Zillow Partners with Yahoo!
The company also recently partnered with Yahoo! real estate to create the Zillow/Yahoo! Real Estate Network. Through the agreement, Zillow will be able to sell real estate advertising for both sites and will power all for-sale listings on Yahoo! Real Estate. According to comScore, Yahoo!-Zillow Real Estate Network was the most-visited real estate entity in December.
Despite this growth, I still have my doubts about monetization and believe that ZipRealty’s business model when merged with Zillow’s traffic will make much better business sense. Most important, all these players could look into doing some affiliate deals with various service providers catering to Realtors, which could better monetize their traffic.