Real estate platform Zillow Group outperformed the industry during the third quarter.
Despite a 3% decline in residential revenue year over year (YoY), Zillow outperformed the industry decline of 14%, the company said in a Wednesday (Nov. 1) earnings release. On the other hand, Zillow’s rental marketplace experienced robust growth, with revenue increasing by 34% YoY. Additionally, Zillow’s mortgage revenue decreased by 8% due to high interest rates.
“We have strong momentum across the board, and it’s because we’re focused on building a better, more integrated real estate transaction experience for both movers and partners,” Zillow CEO Rich Barton said in the release.
As a leading digital listings marketplace, Zillow is well positioned to achieve its vision, Barton said Wednesday during the company’s quarterly earnings call. The company’s brand, traffic, engagement and focus on solving pain points for movers contribute to its strong position in the industry.
To further solidify its position, Zillow is investing in five growth pillars: touring, financing, seller solutions, integrating services, and enhancing the partner network, Barton said.
The company also announced its agreement to acquire Follow Up Boss, a customer relationship management (CRM) system for real estate professionals. This acquisition will enable Zillow to add this resource used by real estate professionals to engage customers, close deals and build teams.
“We’re excited to be able to use Zillow’s resources to help Follow Up Boss grow even faster and to invest in a more integrated software experience for agents and teams across the industry, enabling them to boost productivity and grow their own businesses,” Barton said during the call.
After reporting better-than-the-industry revenue in the third quarter of 2023, despite the challenges posted by the industrywide decline, Zillow remains confident in its ability to outperform the industry in the fourth quarter and foresees revenue growth in its rentals and mortgages businesses.
The company expects the industry to decline 10% in the fourth quarter. Zillow has also seen that it is becoming increasingly difficult for prospective buyers to purchase a home.
“Despite these ongoing headwinds, we expect to outperform the industry in Q4 as the investments we have made in our funnel continue to deliver benefits,” Zillow Chief Financial Officer Jeremy Hofmann said during the call.