Facing up to the reality of a real estate market in which many houses for sale end up becoming “shadow” rentals, Zillow has added rental listings and information to its real estate services. At the same time, Zillow is attaching a $9.95 premium for listings to be posted for six months, which represents the first time the ad-supported service has ever charged for listings. The fees include unlimited photos.
Zillow’s new fees, however, will only be assessed for “manual” listings that are not part of the feeds that Zillow receives from its primary sources, which include brokers, 200 Multiple Listings Services and 171 newspapers. Just 3 percent of its listings are said to be“manual,” representing a potential rental listing market of 120,000 units.
CFO Spencer Rascoff says he expects to see strong demand for rental information. The company points to research showing that 25 percent of its 4 million unique visitors are “dual tracking” rents and houses for sales, seeing whether they can get a better deal from renting or owning. “No one expects price appreciation anymore. All you have is an option to pay for a house outright,” says Rascoff.
The rental option gives users an option to view rental costs a la carte, or against “for sale” information. While adding rentals would theoretically pit Zillow against rental publishers such as Apartment Finder, Apartments.com, ApartmentGuide and My New Place, Rascoff says Zillow’s offering is really oriented toward single family homes, or small complexes, while the others are oriented toward large property managers. “A third of rental units are single family homes,” he says. “More than half of rental units are four units or less.”