The casual consumer may not find this subject terribly interesting. Market watchers and industry people will be talking about it all day.
Earlier this month, President Obama was interviewed by Zillow CEO Spencer Rascoff on the state of housing in the United States. The National Association of Realtors, feeling snubbed perhaps (although they shouldn’t. The White House is reaching out to private industry, and NAR is a trade organization with an active Political Action Committee, RPAC), issued an embarrassing statement referring to Zillow as a “housing entertainment website.” NAR members like myself were not too happy with NAR’s response, considering it far below the largest trade organization in North America and the voice of real estate.
Well, that “entertainment website” just bought StreetEasy.com, and the acquisition presents a tectonic shift in the largest real estate market in the USA one half hour south of my kitchen table, Manhattan. Ironically, Manhattan is the one place in the USA where NAR’s presence is all but irrelevant, as the area is dominated by the Real Estate Board of New York or REBNY. REBNY split off from NAR in the mid 1990’s. With some clear market overlap with Westchester and the suburbs, this affects me and many of my colleagues. The ripple effect with New York has always been clear.
What does it all mean?
Zillow and StreetEasy come from opposite ends of the real estate world. Seattle based Zillow has been fighting hard for years to make sure their data accuracy is improved. Given that Zillow now ranks ahead of Realtor.com as top site in consumer traffic, it is a priority. As a Zillow Agent Advisory Board member myself, I know this firsthand. Zillow gets their data from many different sources, mostly 3rd party systems, and that has posed a challenge and caused tension with the brokerage community.
Complicating matters for Zillow is the fact that Manhattan has no MLS the way most markets know a Multiple Listing Service. REBNY does have their own database, known as the RLS, but it is not on any uniform platform. The Manhattan Association of Realtors operates an MLS, but its market share is small. There are therefore few, comprehensive “go-to” sources for Zillow to draw Manhattan housing data.
Manhattan-based StreetEasy, however, is considered the defacto MLS for Manhattan, supplanting REBNY’s own public portals and the long-revered NY Times as the conduit of choice for consumers. I do some business in the very northern part of Manhattan toward Inwood and Tryon Park, and StreetEasy has served us well. Manhattan brokers swear by it. It is the toast of the town.
A move like this is, arguably, a bigger coup than the President Obama interview in terms of impact on the New York market. They have leapfrogged to the apex of both broker and consumer choice for online home search in a very unique, peerless market. Last year Zillow purchased Buyfolio (now known as Agentfolio), a very good home search interface for brokers and their clients, so this is not Zillow’s first effort to beef up their involvement in the New York City market. It does put them on top convincingly.
So, what Zillow has basically done is purchase Babe Ruth. And every New Yorker knows what that means.