Zillow-Trulia merger to dominate the home listing market
Years ago, real estate classifieds were limited to local newspapers. To look at home listings, homebuyers often had only a single grainy photo and brief text to evaluate whether a prospective buy was worth exploring. Today, real estate listing sites like Zillow and Trulia give purchasers 360 degree tours, detailed summaries and oodles of photos. Even the process of contacting realtors to arrange viewings has been taken online with the new generation of classifieds.
Two of the giants that have emerged in the trend toward digital home shopping are Zillow and Trulia, and the companies announced a $3.5 billion merger earlier this year. The result could be a mega-listing site primed to dominate the market. The merger is currently under review and is scheduled to clear regulatory review early next year. While the National Association of Realtors and other groups have criticized the merger, insiders are optimistic about how the marriage could provide even better service to existing users of both sites.
Brad Stone of Bloomberg BusinessWeek says the companies' success has hinged on recognizing the slow progress of changing the "anachronistic" real estate market.
"Both were founded nearly a decade ago with a healthy respect for the intractability of the real estate market, with its unique dual-agent process (one representing the buyer, and one the seller) and with its multiple listing services (MLS), which has a stranglehold on home listings," writes Stone.
Zillow was founded by Richard Barton, formerly of Expedia, the travel booking site. Since its founding and the proliferation of other sites like Travelocity, tech entrepreneurs have disrupted the paradigm of in-person travel agencies, a shift that is unlikely to be as swift for the real estate market. Transforming the way people buy homes might not happen overnight, but Zillow and Trulia's merger puts the companies on track.