Where is Zillow stock prices?
Where is Zillow stock prices?
Shares of Zillow Group (Z -5.18%) dropped 11.5% in March, according to data provided by S&P Global Market Intelligence. News broke that realtor commissions would be fundamentally changed moving forward, sparking fears of lower demand for Zillow’s services.
Today’s Change
(-5.18%) -$2.48
Current Price
$45.51
The real estate industry is set for major changes
Last month, the National Association of Realtors (NAR) announced that a legal settlement is expected to result in a 25% to 50% reduction in realtor fees on residential real estate transactions. Nearly 90% of home sales in the U.S. are handled by NAR members, who have generally charged a 6% standard commission on the sale price, so the total impact could be enormous.
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Zillow attributes most of its revenue to advertising services provided to realtors, and the residential market accounted for 75% of its total 2023 revenue. Slashed realtor commissions shouldn’t have a direct impact on Zillow’s financials, so the steep drop in share prices might seem strange on the back of that news.
Investors are worried that demand for Zillow’s services will be hurt if the economics of the realtor business are changed. Real estate professionals will have less cash, so their advertising budgets are likely to be reduced. That’s especially true for smaller operations that were already getting by on narrow margins and irregular cash inflows. This might also squeeze some part-time or less motivated professionals out of the market, and reduced competition might result in diminished need for marketing and lead generation.
Rival Redfin (RDFN -6.46%) also slumped on the NAR news, even though the SPDR S&P Homebuilders ETF (NYSEMKT: XHB) rose, illustrating the macroforces driving the stock prices last month.
