Transforming and digitizing the moving experience

On my first day as CEO of Zillow, I’m excited to share that we just reported another strong quarter — our businesses are in great shape, we’re executing well on our growth strategy, and we’re pleased with the progress we’re making to transform and digitize the moving experience on behalf of buyers, sellers, renters, agents and the broader industry.

Zillow has a huge audience, a partner network comprising some of the best agent teams in the business, and tech and product prowess that is unmatched in residential real estate.  With an increasingly diversified and growing business, we are primed to capitalize on the strength of the Zillow brand and capture a meaningful slice of the $30 billion accessible total addressable market in real estate — a slice that more closely reflects our reach in the category.  And our results show we’re making great headway. 

We continue to believe our most important investments are in tech innovations that improve the customer experience, which has helped us earn and maintain our strong brand position and massive, engaged audience of movers.  In Q2, we reported 231 million average monthly unique users across the Zillow ecosystem of apps and sites.  As you’ll remember from our February investor presentation, about 80% of our users come to us organically, and we have three times more app users than anyone else in the category.

Another way to measure traffic and brand strength is through Comscore, which is widely viewed among internet brands as a reliable, transparent third-party source because it aims to capture the number of unique visitors while deduping cookies.  According to Comscore, Zillow Group’s apps and sites had 116 million average monthly unique visitors in Q2. 

Since 2022, we’ve been building the digitally integrated transaction experience and testing it in our Enhanced Markets across the country.  Through this year, we’ve been increasing our breadth of coverage across more markets, and our depth of penetration in those markets, as we drive toward sustainable profitable growth.  As of the end of Q2, we’re in 19 Enhanced Markets, expanding to 36 by the end of August, well on our way to achieving our goal of 40 by the end of 2024.  

As we’ve said, Zillow is the housing super app and we’re continually adding updates and improvements to it, guided by five for-sale growth pillars:  touring, financing, seller solutions, enhancing our partner network, and integrating our services.  Our for-sale growth pillars mark the pathway to meeting our goals to increase customer transaction share to 6% by the end of 2025.  We’re also focused on building up Rentals, which currently represents 20% of our revenue and is growing rapidly.  

Touring

Integrating our touring solutions into our buyer flow is meaningfully improving our ability to identify high-intent customers and connect them with our Premier Agent partners.  We’ve seen that those touring connections convert at three times the rate of other actions on Zillow. 

Last month, we nearly doubled the number of markets with Real Time Touring, and we’re seeing positive early results from being better able to connect higher-intent customers with our Premier Agent partners.  In fact, we have already achieved our end-of-year target of approximately 20% of our connections coming from Real Time Touring, as well as improved transaction conversion.

As one of many product improvements we’re making to this part of the customer journey as a leader in touring software, last quarter we introduced a Touring Agreement that instills more transparency into the process.  The early indicators of success we saw in our pilot gave us the confidence to integrate it into Zillow’s touring experience, and just last week, the agreement became part of the “request a tour” flow on Zillow for nearly 80% of our tour connections.  We plan to roll it out to remaining tour connections in the coming months.  Facilitating consumer-friendly agreements earlier in the funnel is not only an opportunity for us to help consumers and agents navigate the industry rule changes, but it also helps us identify higher-intent customers, send more qualified connections to our Premier Agent partners, and drive conversion rates.    

Financing

We have been working to integrate Zillow Home Loans more seamlessly with our Premier Agent partner network and throughout the customer journey.  Overall customer adoption rates in our nine most mature Enhanced Markets have reached the mid-teens, and nearly 60% of our Zillow Home Loan originations are represented by a Premier Agent partner.

To further capture buyers’ attention, we’ve also launched innovative tools through Zillow Home Loans to help them more accurately understand what they can afford.  In Q2, we introduced a feature called BuyAbility, which gives buyers a personalized, real-time estimate of the home price and monthly payment that fit within their budget — powered by mortgage rates through Zillow Home Loans and available to check regularly in the Zillow app. 

Our efforts have accelerated purchase mortgage growth, with $756 million in purchase loan origination volume in Q2, a 125% year-over-year increase.  We expect continued purchase mortgage growth for Zillow Home Loans as we launch more Enhanced Markets and continue to improve our go-to-market integration with our Premier Agent partners.

Seller solutions

Zillow Showcase, a unique offering unlike anything else available today, not only makes selling a home easier, but also creates real value for sellers and their agents. 

Showcase elevates agents’ brand presence on Zillow and provides an enhanced shopping experience through our AI-powered, home-grown rich media and floor plan technology.  Showcase listings drive higher engagement — more views, more shares, more saves — compared with similar non-Showcase listings on Zillow.  But even more importantly, homes that list with Showcase are selling faster and for more money.  Showcase listings typically sell for 2% more than similar non-Showcase listings on Zillow, a bonus of more than $9,000 on a home sold at the average sale price.  Homes listed with Showcase are also more likely to secure an accepted offer within 14 days.  What’s more, we’ve observed that agents who use Zillow Showcase are winning 20% more listings than similar agents on Zillow.  These results have made it an attractive offering for real estate professionals. 

Zillow Showcase is available to agents in every market after launching nationwide earlier this year.  Even though it’s early days, we’re pleased to share that more than 1% of all new listings nationwide are now using Showcase.  We are on our way to our goal of 5%–10% listing coverage, which represents a $150 million – $300 million annual revenue opportunity.  And we believe there is potential for future growth beyond that. 

Enhancing our partner network

Our Premier Agent partners represent some of the best, most professional agents in real estate, who we believe are poised to take share in the evolution the industry is experiencing.  

Recall that not every real estate agent is a Zillow Premier Agent partner — in fact, since 2015, we’ve shrunk our active partner base by roughly 60% while our Premier Agent revenue has grown by more than 2.5x over the same time frame.  We’ve oriented Premier Agent around some of the best agent teams — those we believe provide superior customer service, understand the industry and their local market, have a proven ability to scale, and make the most money to invest alongside us.  The top 20% of agents/teams handle 80% of transactions, and nearly four in five Zillow Premier Agent partners are in that top tier.  

We are supporting our partners by providing them with some of the best digital tools and solutions.  For example, we’re really pleased with the early results eight months after our acquisition of Follow Up Boss, one of real estate’s leading customer relationship management systems.  More than 70% of our connections in Enhanced Markets are being managed through Follow Up Boss; these substantial adoption rates set the stage for us to build and improve features and services that help our partners gain share.  

Integrating our services

The for-sale growth pillars come together in the Zillow housing super app experience.  

Providing high-intent customers with valuable solutions, working with some of the best agents and providing those agents with some of the best tools, has paid off for us:  In our first four Enhanced Markets, we’ve seen revenue growth per total transaction value increase by more than 80% since the beginning of 2023, compared with the more than 50% growth we reported back in February 2024.  And as we expand, we are consistently seeing signs of repeatable success. In the 13 Enhanced Markets we were in at the end of Q1, we are seeing gains in revenue per total transaction value.  We see an opportunity to increase conversion and revenue per total transaction value even more from here as we launch the remaining Enhanced Markets this year. 

Rentals

Zillow Rentals is an exciting growth business for us.  Our opportunity is massive:  Today, there is no nationwide marketplace containing all rental listings, resulting in a fragmented experience for renters.  We’re building a two-sided marketplace with a comprehensive suite of listings — both multifamily and longtail — that enables renters to more easily shop, tour, apply, sign a lease, and pay rent securely, all on one convenient platform: Zillow.  

Having more rental listings and multifamily properties, and ramping up our marketing, have both helped drive customer awareness of rentals on Zillow.  In June, our total Rentals Unique Visitors were up more than 20% year over year according to Comscore, widening our margin as the leading online rentals brand, with the largest audience, and No. 1 preference among renters.

We expect multifamily to be the primary driver of our Rentals revenue growth, and we made great progress in Q2.  Zillow now has 44,000 multifamily properties, 38% more than a year ago.  And our exclusive partnership with Realtor.com is further boosting exposure for our multifamily listings, helping our partners reach even more renters.    

We have a lot of work ahead, but with multifamily revenue up 44% year over year, we are on our way, with a $1 billion-plus revenue opportunity in front of us.  

I want to congratulate the exceptional Zillow team on our eighth consecutive quarter of total revenue outperformance.  It’s their dedication and expertise that continue to drive Zillow forward as we work to deliver exceptional products and services for consumers, agents, and the broader industry.  Our successes to date give me a great deal of confidence in our future.  

This LinkedIn article is adapted from my remarks to Zillow shareholders on Aug. 7, 2024.  For more details regarding Zillow Group’s results for Q2 2024, visit Zillow Group’s Investor Relations site and shareholder letter. 

Forward-Looking Statements: 

This post contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risks and uncertainties, including, without limitation, statements regarding our future targets, the future performance and operation of our business, and our business strategies and ability to translate such strategies into financial performance. Differences in Zillow Group’s actual results from those described in these forward-looking statements may result from actions taken by Zillow Group as well as from risks and uncertainties beyond Zillow Group’s control. For more information about potential factors that could affect Zillow Group’s business and financial results, please review the “Risk Factors” described in Zillow Group’s other filings with the Securities and Exchange Commission.