U.S. home sales listings have fallen steadily over the past year-and-a-half, pushing sellers and agents out of the market. It’s one reason real estate listings site Zillow is looking to rental listings as a new revenue stream. However, attracting renters to purchase featured rental listings may also prove to be a challenge.
The company announced today it will include home rental listings and search, allowing people to list rentals, and purchase enhanced listings.
Because most real estate rental sites focus on apartment buildings, Zillow hopes to corner the remaining market of small buildings with four units or fewer — as opposed to apartment-complexes — which the company called “vastly underserved.” A company spokesperson added, “We already have information on all of these homes on Zillow today, so adding the ability to list these properties for rent is a natural extension.”
Zillow charges $9.95 for agents and individual renters and sellers to manually post listings. The company gives these paid listings more exposure by placing them at the top of search results, and displays them on the site for 180 days. Zillow also now lets potential renters and buyers search by monthly payment.
“Rental properties are not as much in vogue,” said Gordon Borrell, CEO of local media and market research firm Borrell Associates. Borrell contended that because lower home prices and government incentives are spurring home sales, rentals may look less attractive, pushing down rental listings volume.
“This probably signals a hungry hunter searching for another forest to hunt in,” he added.
Indeed, it is a buyer’s market. According to a monthly survey conducted by national real estate brokerage ZipRealty, home listings in 27 major U.S. metropolitan areas were down for the seventeenth consecutive month in November, falling over 27 percent since the previous year.
Still, the real estate market is in flux, and Zillow aims to capture both people who are unsure about whether to buy, and those potential buyers in need of a new place to live but not willing to sell in the depressed market.
“Eight million people come to Zillow each month, and nearly 1 million of them are exclusively renters, and we think untold others are ‘on the fence’ deciding whether now is the time to rent or buy,” Zillow COO Spencer Rascoff told ClickZ News. “And there are many people who would like the option to list their home for rent if they must move, rather than try to sell.”
Currently, users searching in big cities like New York or Los Angeles will find no rental listings on Zillow. According to Rascoff, “it will take us time to build up our rental listings, much like it did when we announced the ability for owners and agents to list homes for sale.”
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