Zillow and Trulia are like Boardwalk and Park Place with hotels

“In the end what really happens to the brokerage communtiy, when (they land on) the guy who owns Boardwalk and Park Place? They get wiped out.”

Although Zillow and Trulia have the power to hike the rates they charge agents and brokers, they actually don’t want to wipe them out, Corcoran says.

“It’s a simpatico relationship,” says the former New York City broker turned TV personality. Zillow and Trulia “need the real estate broker to knock on the door, pitch the (seller) get the (listing) agreement signed, put it on the MLS, and the MLS giving it to Zulia. “

Ruhle and Schatzker can’t believe that Zillow and Trulia won’t eventually disrupt agents and brokers, or at least get them competing with each other by lowering their commissions, but Corcoran is adamant that the portals don’t threaten the traditional real estate business model.

The broker who gets exclusive on a property, that’s still the way this game is played,” Cororand says. Brokers can pop listings on all the websites, and “you still need someone to manage the egos and the negotiations.” Leave those things in the hands of homeowners, and “it doesn’t work out as well.

What would the Zillow-Trulia hookup mean for housing?

The next biggest rival, the old guard Realtor.com and Move, meanwhile, are fighting back, criticizing both companies for lacking accuracy in their information.

NAR and Move launched PR and ad campaigns in June to showcase the “value of the local knowledge and accurate data” NAR members bring to the table.

According to Move, the site’s “Accuracy Matters” campaign aims to emphasize that Realtor.com “provides the most accurate, up-to-date and comprehensive real estate listings and content available online.”

What they are saying is yes, pretty bells and whistles on that bike, but the front wheel is all warped.

And you know what? Realtor.com and Move are right – their information on listings is more accurate.

Price information is less accurate on Zillow and Trulia – bank and tax assessments data isn’t accurate to actual market prices. There’s a reason that some real estate agents coined the term “unzillowable” to cover all the local information that a national company without boots on the ground in local markets just doesn’t have.

Here’s the thing though. It doesn’t matter.

Zillow (Z) is seeking to acquire rival Trulia (TRLA) in a move that would create a Goliath of online real estate listings, and both company stocks surged on the news of the rumor.

(You can read HousingWire’s extensive coverage here.)

So how is it going to affect the industry, consumers, and even the media?

For starters, these are two dot-coms in the classic sense, so what they are bringing to the table is their audience, which the two have in spades.

Right now, despite the big surge, neither company has been profitable.

For FY2013, Zillow had explosive revenue results, increasing 69% to a record $197.5 million. But the company posted an annual net loss of $12.5 million, mainly due to the cost of the advertising blitz the company put on. In FY2012, the company had a profit of $5.9 million.

It was a matter of investing in the long game, getting their brand out to consumers – spending money to make it.

Meanwhile, Trulia also saw a net loss in FY 2013. On rapidly growing gross revenues of $143.7 million, the company saw a net loss of $17.8 million.

It’s hard to tell if the two companies’ multiples mean this is a case of 0 + 0 = <O, or if the product will be greater than the sum of its parts. (I was told there would be no math.)

Trulia and Zillow have made great efforts in ginning up interest in home selling and buying with their TV ads, their custom and innovative searches, and their often fun and useful packaging of data.

The competition between the two for ink and bytes in the trade media space sparked often funny, mostly useful data reports, with only a few real swing-and-a-miss reports.

Even if this acquisition happens, there’s no reason this can’t continue, although less competition could make them complacent.

It will affect consumers and real estate media; not going to hide it, the thematic reports the two companies put out are bread-and-butter for the real estate trades.

The real play in the long-run is for the MLS records. Those are the spice on Dune – control the spice, control the housing universe.

If customers are going to Zillow and Trulia, that’s what matters.

The most valuable person in a real estate transaction is not the real estate agent, it’s not the lender, it’s not the originator, and it’s not the seller.

It’s the consumer. And if the consumers are going to Zillow and Trulia, or Zillow/Trulia, or Zulia, or Trillow, or whatever they end up calling it, it doesn’t matter if their data aren’t as accurate as Realtor.com.

Things can change quickly. Zillow came on the scene less than a decade ago. Trulia is only a year older, having launched in 2005.

Yet today, together, Trulia and Zillow’s 84.6 million unique visitors in May 2014 account for twice the number of unique visitors for the next three real estate websites put together, according to the Beyond Syndication 2014 report from Clareity Consulting.

“Zilulia” or whatever they call it, may become the next big Goliath of real estate listings.

But if they don’t keep innovating and pushing to be better – well, there’s always another David out there, and plenty of rocks.

Rental history may soon influence credit scores

Landlords aren’t required to report to the three most popular credit bureaus, Equifax, Experian and TransUnion, so years of on-time rental payments don’t necessarily influence first-time homebuyers’ all-important credit scores when they apply for a mortgage. 

But that’s changing, Experian and TransUnion are beginning to include rental payment histories into credit files and will use them to calculate credit scores. 

There are alternative credit reporting services available to first-time homebuyers, such as ECredable.com, that incorporate payment history information that isn’t reported to the major credit bureaus, such as phone and rental payments.  

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Classic 1960's Architectural Post & Beam property in Franklin Hills. Step into a spacious living room with wood beam ceilings, hardwood floors & walls of glass that lead you out to a front terrace that extends the length of the home. Remodeled kitchen with stainless steel appliances & Caesarstone countertops opens to an adorable private outdoor patio. Master bedroom has stunning head on mountain views & opens up to a gorgeous wood deck that leads you to a large romantic upper terrace with jacuzzi.MikeDronge.com

Many homeowners with loan mods face rate increases

Half of all owners with active Home Affordable Modification Program modifications reside in just four states: California, Florida, New York and Illinois. Above, a foreclosed home in Miami in 2010. (Joe Raedle / Getty Images)

New to the Beverly Hills housing market

This Craftsman home, set on a roomy three-quarter-acre lot, has the rolled roof edges, deep overhangs and protruding rafter tails characteristic of the style developed by brothers Charles and Henry Greene. Originally built for Packard dealer Earle C. Anthony, the shingle-clad house was moved from Los Angeles to Beverly Hills in the early 1920s by silent-film star Norman Kerry. Inside, the Anthony-Kerry House retains its wood interiors, beamed ceilings and built-ins.

Location: 910 N. Bedford Drive, Beverly Hills 90210

Asking price: $8.995 million

Year built: 1909

Architects: Greene & Greene

House size: Four bedrooms, five bathrooms, 4,565 square feet

Lot size: 33,968 square feet

Features: Foyer, oversized living room with fireplace, formal dining room, updated kitchen, office/library, sleeping porch, clinker-brick garden walls, detached garage with living quarters above, swimming pool, mature landscaping

About the area: Last year, 369 single-family homes sold in the 90210 ZIP Code at a median price of $3.425 million, according to DataQuick. That was a 13.2% price increase from 2012.

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3 major real estate forecasters turn bearish

Declining affordability, waning demand from investors and tight credit are among the headwinds that are tripping up the housing recovery, Bloomberg reports.

Amid lackluster readings from housing barometers, Fannie Mae, Freddie Mac and the Mortgage Bankers Association all have recently downwardly revised their estimates of 2014 home sales from an annual increase of 10 percent to annual drops, Bloomberg noted.

Moreover, the share of Americans who said they planned to buy a home in the next six months fell to 4.9 percent in May from 7.4 percent at the end of 2013, its highest level since 1964, Bloomberg said, citing data released by research firm The Conference Board.

Realtor Mike Dronge

Home Sales Slip In May as Thin Inventories Push Prices Higher

Southern California home sales slid in May as demand outstripped supplies and sent prices higher, a research firm said Wednesday.

The median sales price for new and existing houses and condominiums was $410,000, up 1.5 percent from $404,000 in April and up 11.4 percent from $368,000 in May 2013, DataQuick said. It was the 26th straight month of annual price increases but the lowest percentage gain since August 2012.

Three of the six counties surveyed posted single-digit percentage price increases from last year, another sign that the market may be cooling. The annual price gain was 9.8 percent to $450,000 in Los Angeles, 8.7 percent to $462,000 in Ventura and 8.2 percent to $440,000 in San Diego.

There were 19,556 homes sold in the region, down 2.3 percent from 20,008 in April and down 15.1 percent from 23,034 in May 2013, San Diego-based DataQuick said. It was the eighth straight month that sales fell from a year earlier.

"We expected rising prices to unlock more inventory this spring, and that's happened. But the supply of homes for sale still falls short of demand in many markets," DataQuick analyst Andrew LePage said.

There was a 3.8-month supply of unsold homes in the Los Angeles metropolitan area in April, up from a 2.8-month supply a year earlier, according to the latest figures from the California Association of Realtors. A normal supply is considered five to seven months.

Areas hit hardest by the market meltdown several years ago posted the biggest price gains. The median sales price in San Bernardino, the least expensive county, rose 20.7 percent from last year to $245,000, and the median in Riverside, the second-least expensive, climbed 17.1 percent to $295,000.

The median sales price in Orange, the region's most expensive county, rose 10.2 percent to $595,000.

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Many potential homebuyers don’t realize they don’t need a big down payment

On average, consumers believe they need 11 to 15 percent in equity to buy a home, Boyle said, citing figures from a Zelman & Associates survey of renters and people who live in the homes of oth“It’s a wakeup call to the housing industry that we have more to do to let the next generation know they can get a conforming, conventional mortgage with a down payment of as little as 5 percent (sometimes with as little as 3 percent coming out of their own pockets),” Boyle wrotAbout 4 in 10 respondents estimated the minimum down payment required was at least 15 percent of the purchase price, including those in the prime “first-time buyer” 

Many potential homebuyers overestimate the size of the down payment required to finance a home purchase, according to Fannie Mae exec Christina Boyle.

On average, consumers believe they need 11 to 15 percent in equity to buy a home, Boyle said, citing figures from a Zelman & Associates survey of renters and people who live in the homes of others.

“It’s a wakeup call to the housing industry that we have more to do to let the next generation know they can get a conforming, conventional mortgage with a down payment of as little as 5 percent (sometimes with as little as 3 percent coming out of their own pockets),” Boyle wrote.

About 4 in 10 respondents estimated the minimum down payment required was at least 15 percent of the purchase price, including those in the prime “first-time buyer” demographics between 25 and 34.

Freddie Mac’s purchase of mortgages with down payments under 10 percent more than quadrupled between 2009 and 2013, Boyle noted, and the latest stats for 2014 show that more than 1 in 5 borrowers who took out conforming, conventional mortgages this year put down 10 percent or less.

Share of equity home sales rises to highest level in more than six years as higher home prices buoy more underwater homes

Recent home price gains have lifted more underwater homes into positive territory, pushing the share of equity home sales to their highest level since late 2007.  At the same time, pending home sales were essentially unchanged in April, the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) said today. 

Distressed housing market data:

• The share of equity sales – or non-distressed property sales – continued to increase in April, rising to 88.4 percent in April, up from 87.6 percent in March.  After a slight decline at the end of 2013, equity sales have been rising steadily again since the beginning of this year.  April marks the 10th straight month that equity sales have been more than 80 percent of total sales. Equity sales made up 75.4 percent of sales in April 2013.

• The combined share of all distressed property sales continued to decline in April, thanks to a drop in short sales.  The share of distressed property sales was down from 12.4 percent in March to 11.6 percent in April.  Distressed sales continued to be down by more than 50 percent from a year ago, when the share was 24.6 percent.

• Twenty-six of the 41 reported counties showed a month-to-month decrease in the share of distressed sales, with 13 of the counties recording in the single-digits, including Alameda, Marin, San Benito, San Diego, San Luis Obispo, San Mateo, and Santa Clara counties — all of which registered a share of five percent or less.

• Of the distressed properties, the share of short sales dropped to levels last observed in April 2008 at 5.9 percent, down from 6.6 percent in March.  April’s figure was nearly a third of the 14.7 percent recorded in April 2013.

• The share of REO sales only dipped slightly in April to 5.3 percent, down from 5.4 percent in March.  REO sales are now nearly half of what they were a year ago, when REOs made up 9.4 percent of all sales in April 2013. 

• A drop in active listings of equity and REO properties tightened the housing supply in April, causing a decline in unsold inventory across all property types.  The Unsold Inventory Index for equity sales dropped from 4 months in March to 3.6 months in April.  The supply of REOs slipped from 2.8 months in March to 2.3 months in April, and the supply of short sales declined from 4.7 months in March to 4.4 months in April.

Pending home sales data:

• California pending home sales were essentially unchanged from March, with the Pending Home Sales Index (PHSI)* dipping 0.5 percent from 114.4 in March to 113.8 in April, based on signed contracts.  The month-to-month change was substantially lower than the 6.5 percent drop from March to April observed in the last three years.

• Pending sales were down 6 percent from the revised 121.1 index recorded in April 2013.  The year-over-year decline in the PHSI has been tapering over the past few months and should level off in the coming months.  Pending home sales are forward-looking indicators of future home sales activity, providing information on the future direction of the market.

Zillow now allowing pocket listings

HOUSTON – Zillow doesn’t want to cultivate the growth of pocket listings as we know them; it wants to “co-opt” them, according to Errol Samuelson, chief industry development officer at Zillow.The goal of Zillow’s new “coming soon” feature is to “change the notion of ‘pocket listing’ to something that’s more transparent and egalitarian in the sense that the listing is available for everyone to see,” and not just a “cloistered group,” said Samuelson, speaking on a panel on the future of online real estate.

“Coming soon” allows agents, brokers and multiple listing services to market homes on its site up to 30 days before listing them on the MLS. The feature is restricted to agents who advertise with the portal and the brokerages and MLSs who provide Zillow their listings in a direct feed.

Along with inventory shortages, new technologies such as social media, listing sites and internal communication platforms like Yapmo are fueling the growth of pocket listings. Bob Hale, CEO of the Houston Association of Realtors, suggested that the expanding social media network Nextdoor could “easily become a way for neighbors” to sell homes off the MLS.

All of this “could lead to the demise of the industry as we know it today,” he said. Zillow’s coming soon feature, he added, “has dramatic implications for the industry.”

Because agents can restrict who they tell about their pocket listings, it’s easier for brokerages to keep such deals in-house, with the buyer and seller represented by different agents at the same company (a practice regulated as “designated agency” in many states). Of more concern to critics are “dual agency” deals, in which the agent represents both the buyer and seller. Critics say that the reduced exposure a pocket listing receives may result in a lower sale price.

A number of agents have taken issue with Zillow’s “coming soon” feature because they believe that it facilitates dual-agency transactions, just like other off-MLS marketing methods.

“It will foster dual agency and make the MLS services even more irrelevant than they already are,” an associate broker at Pinetop, Arizona-based Aspen Properties. “Who needs an MLS if we are just going to sell our own listings anyway?”

But Samuelson argued that “coming soon” is a desirable alternative to the sort of off-MLS marketing that has traditionally incubated dual-agency transactions because it exposes off-MLs listings to the public, not just a “closed club where only a privileged few agents get to see the listing.”

In fact, the feature even places “coming soon” listings above conventional listings on search results pages, he said.

“The goal is to help agents test prices” and “give a head start on marketing a listing before it goes into the MLS,” he said.