Could Amazon break into real estate by buying Redfin?

Redfin's "troves of data" would be major benefit

National /
Feb.February 07, 2019 02:30 PM

Redfin CEO Glenn Kelman overlaid on Jeff Bezos (Credit: Getty Images and Redfin)

Amazon has a history of breaking into new industries with a splashy buy, having disrupting the grocery business with the $13.7 billion acquisition of Whole Foods. Should the company do the same to real estate by buying online brokerage Redfin? One analyst thinks so.

Jack Micenko, a housing and consumer finance analyst at Susquehanna Financial Group, makes the case for such a move in a new report. Among the various benefits such a purchase would bring, Redfin’s “troves of data” is near the top of the list.

“If you are going to buy your way into real estate, I don’t see a better option than Redfin,” Micenko told Inman. Redfin’s data on consumers’ work history, wages, savings, real estate transactions, and relocation patterns would be a boon to the online retail giant, who could offer vast financial resources in return.

“Really both companies would be better together than they would be apart,” Micenko added. Both companies declined to comment, though Micenko says Redfin is “aware of his suggestion.”

The analyst also said that buying Redfin competitor Zillow would be a less ideal move for Amazon, because the company uses data differently and has entrenched the status quo around agent commission and agent leverage.

Redfin currently has a market capitalization of about $1.67 billion, more than 10 percent of which is owned by investment firm Vanguard Group.

Redfin CFO Chris Neilsen previously worked at Amazon for a decade, and the company hired Amazon economist Daryl Fairweather to head its data operations last fall.

Amazon has hinted at interest in the real industry in the past, teasing a “Hire a Realtor” feature on its website in 2017. The company also has a deal with Lennar, the country’s biggest homebuilder, to include Amazon Alexa in its new homes, and has invested in pre-fabricated home startup Plant Prefab. [Inman] — Kevin Sun


Related Articles

arrow_forward_ios
Eric Gordon
Eric Gordon on the evolution of the residential data game — and how to stay competitive in the new world
Eric Gordon on the evolution of the residential data game — and how to stay competitive in the new world
Big Tech locations in NYC
MAP: Here’s a look at all the Big Tech locations in NYC
MAP: Here’s a look at all the Big Tech locations in NYC
What will proptech look like in 2019 and beyond?
What will proptech look like in 2019 and beyond?
What will proptech look like in 2019 and beyond?
The average price of a London home rose above 500,000 pounds, or roughly $685,000, for the first time. (Getty)
London home prices hit new high
London home prices hit new high
(Illustration by The Real Deal)
Americans bought 5.6M homes last year — the most since the bubble
Americans bought 5.6M homes last year — the most since the bubble
Randy Mastro and 21 East 83rd Street (Photos via Getty; Google Maps)
Former deputy mayor Randy Mastro, lawyer in Lucerne controversy, lists UES home
Former deputy mayor Randy Mastro, lawyer in Lucerne controversy, lists UES home
The median existing-home price exceeded $300,000 for the first time last year (iStock)
Vicious cycle creates “huge supply crunch,” pushing home prices up
Vicious cycle creates “huge supply crunch,” pushing home prices up
Overall, the number of housing units that started construction last year was up 7 percent from 2019. (iStock)
Residential construction had busiest year since 2006: MBA
Residential construction had busiest year since 2006: MBA
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...