Zillow CEO reveals what he thinks is the cause of America's 'housing crisis'
Despite the tribulations of the housing market itself, the number one real estate site in the country - Zillow - is thriving.
CEO Jeremy Wacksman sat down with The New York Times to discuss what may be causing the dip in the housing market and what keeps Zillow afloat amidst it all.
The Seattle resident was appointed as CEO a year ago, but has been with the company since 2009.
Wacksman added that the major issue with homebuying in the United States is that there is an availability problem.
'We have an affordability crisis, which is driven by an availability crisis. It is a supply-side problem,' he said.
While many complain about increasing mortgage rates, he said that it's only a small factor.
'The real problem for a home buyer is home prices are up 30, 50, 70, 100 percent, depending on the market, from pre-pandemic levels. Incomes are not up that much.'
According to the US Social Security Office, the average yearly income in 2023 was $66,621, only increasing 4 percent from the year prior.
Wacksman noted that if the housing industry had continued to build new properties to keep up with buyer demand, it may not have become the 'crisis' it is today.
'We have been chronically under-building since, really, the global financial crisis,' he said. 'Less supply and a lot of demand is going to keep home prices elevated.'
According to Zillow, the average home value is almost $370,000 with just 1.3 million homes in the for-sale inventory.
Despite the dip in purchasing and sky-high prices, Zillow is seeing hundreds of millions of unique visitors every month. The company has seen a jump in revenue and its stock is up more than 60 percent.
The top site for real-estate listings in the country attracts what the internet has dubbed 'Zillow Surfers.' Those with little to no intention of purchasing a home browse on the website everyday.
Wacksman welcomes such browsers.
''Zillow Surfing' is pretty pervasive, regardless of if it's a buyer's market or a seller's market,' he said.
'You spend all this time window shopping and escaping and dreaming. You are getting a little smarter about what you might want, and then something happens and you pull the trigger.
'As a marketer, I don't think you could have a stronger brand endorsement than all of the usage you get from people escaping on your platform.'
The way Zillow makes money is by selling ads to real estate companies who want to reach those endlessly scrolling Zillow-surfers. The company requires agents to post listings within 24 hours of being on the market.
If not, it's never allowed on the site at all.
Real estate companies like Compass have grown wary of Zillow, and even filed a lawsuit claiming they maintain a monopoly, calling it a 'Zillow ban.'
But Wacksman said that the lawsuit itself speaks to the larger issues of seller transparency within the United States housing market.
'The heart of the issue is the U.S. real estate market currently exists with a unique amount of transparency,' he said.
'So you and I, as a buyer and seller, can see all available listings, and that empowers us to shop on our own. There are a few companies that are looking to put the internet back in a box and hide inventory and force you to pay them.
'The lawsuit is about challenging that consumer benefit and that transparency.'
Now, Zillow is trying to shift toward a 'super app' structure that allows buyers to be connected with any resources that they may need. That includes mortgage providers and rental properties as well as any other related services.
The service even offers a three dimensional walk through option to help buyers completely view each property.
Wacksman said that marketing a home 'in the broadest sense' is the best way for agents to get the most out of Zillow. Amidst a market low, that may be the best way to break through.
'That's why we spend so much time on the software to help agents do their job well.'
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