In response to the COVID-19 outbreak, Zillow Group is offering its Premier Agents a 50% discount off their next monthly bill, starting March 23.
The discount for Premier Agents, who partner with Zillow to find client leads, will apply to new bookings through at least April 22.
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“While we estimate the impact of these actions on our full year revenue outlook will be between $40 to $50 million, we expect to mitigate much of this impact through active management of the expense levers within our control,” Zillow CEO Rich Barton and CFO Allen Parker wrote in a letter to shareholders.
ZIllow did not update its Q1 or full-year financial outlook in today’s letter to shareholders. The company’s stock is down more than 50 percent in the past month amid a stock market slump.
Addressing potential concerns about the company’s overall business, the Seattle-based online real estate company told shareholders that it has a strong balance sheet and cash position.
“Our action today shows we are reacting to evolving market conditions to support our partners,” the letter reads.
Zillow’s Premier Agent business saw revenue rise 6 percent to $233 million in the most recent quarter, helping support the company’s new home-buying business. Zillow last month said its “core Premier Agent market-based pricing model has returned to healthy growth.”
It’s unclear how the housing market will change over the next several months and affect real estate giants such as Zillow and Redfin. A recent Redfin survey found that about 40% of Americans think the novel coronavirus outbreak will have a negative impact on the housing market.
Redfin CEO Glenn Kelman said he expects a “big drop in activity” this week given the recent social distancing mandates to slow the spread of COVID-19. The Northwest Multiple Listing Service, based in the Seattle area, today suspended in-person public and broker open houses until March 31.
“Some buyers will see this as an opportunity to get the home of their dreams at a good price, with historically low mortgage rates,” Kelman wrote in a blog post. “Others will wait until the end of the recession that has almost certainly begun.”
Zillow published a research report last week that analyzed past pandemics and their effect on housing. For example, during SARS, Hong Kong home prices did not fall significantly but transaction volumes greatly subdued, which mimics what’s happening in China right now, according to the Zillow study.
“While we cannot predict what is yet to come, we do know from the data our economics have analyzed from prior pandemics and recessions that while transaction volumes slowed during the most severe periods, prices remained relatively stable and activity came back quickly when related health concerns subdued,” Zillow wrote in its letter to shareholders today.