Online real estate powerhouses like Redfin, Trulia and Zillow have been around for years, building multi-million dollar businesses in a category that Redfin CEO Glenn Kelman once famously described as the “most screwed up industry in America.”
Well, based on the recent startup activity in the online real estate arena, things must still be mucked up.
Redfin, Trulia and Zillow certainly aren’t alone anymore in trying to fix the way people buy and sell homes, or find rental properties.
Just in the past month, we’ve seen the arrival of three new Seattle online real estate services: Redfin founder David Eraker’s new brokerage service Surefield; BuildersCloud founder Andrey Nokhrin’s new home valuation tool Flipt and former Amazon and Digg exec Matt Williams ambitious online home improvement upstart Pro.com, backed by the likes of Madrona, Andreessen Horowitz, Jeff Bezos and others
Beyond those new players, Seattle-based Porch continues to add staffers in a big way as it looks to upend the way people go about improving their homes, most recently expanding a partnership with Lowe’s.
The new interest in online real estate — a category with strong roots in Seattle — is interesting. You’d think by now that the big-time players and first-generation entrants would have pushed away any competitive threats. Yet, new entrants (and money) are arriving with what CB Insights recently dubbed a “fever pitch.”
Even with the new entrants emerging, the established players aren’t ceding much ground. The top three major players — Realtor.com, Trulia and Zillow — are all engaged in advertising war to attract more eyeballs. In fact, those three sites alone attracted more than a third of all visits in April, boosting their share on desktop computers.
Zillow appears to be winning the battle so far, with the real estate portal announcing that it attracted a whopping 79 million unique visitors last month on both mobile and desktop.
In a recent interview with GeekWire, Zillow CEO Spencer Rascoff offered his thoughts on the new breed of entrepreneurs chasing opportunities in real estate.
“There continues to be a lot of innovation, and startups attracted to the real estate category, especially here in Seattle, which is a hotbed of real estate innovation,” he said.
Not only is real estate a huge industry, but Rascoff said it is a category that many entrepreneurs can relate to since so many have struggled either buying a home or finding an adequate rental property. “We’ve all had first-hand experience with different pain points in the process,” he said. “And that always attracts entrepreneurial interest.”
Of course, seeing the stock market valuations of companies like Zillow — now valued at $4.2 billion — and Trulia — now valued at $1.25 billion — gets entrepreneurs excited as well.
“That validates their hunch that their is opportunity in this category,” said Rascoff, adding that he keeps an eye on all the potential rivals.
“It’s a great forcing function to keep us on our toes,” he said.
Of course, many of the startups will never achieve those lofty valuations. However, both Zillow and Trulia have shown an appetite for acquisitions, and that could bring smiles to some of the new breed if they are able to execute on a specific niche and prove their value.
That’s what Redfin co-founder David Eraker is trying to accomplish with Surefield, a new brokerage that is utilizing cutting-edge technology to showcase every detail of a home with virtual tours. Eraker doesn’t want to take on his former company, or any of the other online real estate giants.
“We don’t have a search engine. We are not a destination site, and we have no intention to get into that business at all,” he said. “There are a lot of companies that are doing that type of work super well right now.”
Others such as Pro.com founder Williams think there’s still plenty of room to maneuver, even as giants such as Zillow and Trulia loom.
“I truly believe that this is one of those opportunities that I look at the early days of Amazon and say this has the makings for a gargantuan industry,” he said.
That ambition and optimism is what keeps the innovation economy firing.
But, for now, let’s just call this mini-bubble: Online Real Estate 2.0.