Last month, Zillow announced that it would purchase Trulia in a $3.5 billion deal that sent ripples through the residential real estate industry.
Like travel agents before them, many real estate agents worry that the Zillow-Trulia shotgun wedding will not only destroy the traditional agent-client relationship, but it also threatens the National Association of Realtors (NAR), which is closely affiliated with the website Realtor.com.
Nationwide, real estate agents and analysts are sounding the alarm.
“A huge percentage of real estate agents are going to be put out of business by this,” warned Fred Griffin, a Florida real estate broker. “The merger of Zillow and Trulia signals the death knell for NAR and the MLS. The real estate industry as you have known it for the past 100 years is over. NAR is dead. So is the MLS. Real estate agents and brokers who realize that NAR is history, and quickly embrace Zillow and Trulia, will be among the survivors.”
Griffin called the deal “Armageddon” for NAR and the nation’s 800 multiple listing services, which agents pay annual fees to be members of the local trade associations.
Two decades ago, thetravel agent industry was wiped out by travel websites like Expedia and Hotwire. Zillow CEO Spencer Rascoff was previously co-founder of Hotwire, while Zillow co-founder Rich Barton founded Expedia.
In June, Zillow and Trulia had 53.8 million and 31.6 million unique visitors, while third place Realtor.com had 23.7 million, according to comScore.
Brad Inman, founder of InmanNews, called the Zillow-Trulia transaction “checkmate.”
“In my view, this is checkmate,” wrote Inman. “Soon, Zillow will control the chessboard, like Amazon does the publishing industry. The only meaningful consumer destination, Amazon, after many savvy moves, now controls pricing, merchandising, the data and the market. Soon, Zillow will control the pricing, the listings, the merchandizing and, for sure, the consumer. In chess, when checkmated, the game is over.”
So, what are your thoughts?
Is consolidation in the real estate industry a good thing?
Will the real estate industry go the way of the travel industry?