High demand for housing and low supply delivered another quarter of record profits for Zillow.
The Seattle-based real estate giant notched $52 million in net income during the first quarter, bolstered by a booming U.S. housing market. That compares to a $163.3 million loss during last year’s first quarter, as Zillow invested heavily in its nascent home-buying program, Zillow Offers.
During the quarter Zillow generated $1.2 billion in revenue, up 8 percent year-over-year.
By and large, the gains were driven by agent advertising. Premier Agent revenue rose 38 percent year-over-year to $334.3 million. Zillow’s internet, media, and technology segment — which includes Premier Agent — generated $144 million in profits during the quarter.
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During an earnings call Tuesday, CEO Rich Barton said home-price appreciation over the last six months hit “unprecedented” levels not seen in 35 years.
“Volumes are up. Home price appreciation is up. Homes are just moving really, really fast,” he said. “All of that put winds in the sails of our Premier Agent business and business overall.”
The housing market rebound coincides with the re-acceleration of Zillow Offers.
Along with other iBuyers, Zillow suspended iBuying when the pandemic struck. During the quarter, Zillow purchased 1,856 homes and sold 1,965 homes during the quarter. “The Q1 resale velocity, in which 128 percent of beginning inventory was sold during the quarter, was ahead of plan,” Barton wrote in a letter to shareholders.
Zillow Offers generated $700.9 million in revenue during the first quarter, down 9 percent. (During the first quarter, the company said it would start making offers based on its Zestimate.) Overall, Zillow’s Homes segment, which also includes title and closing services, lost $58 million.
Zillow’s web and mobile traffic hit 221 million average monthly users during the three-month period, up 15 percent. It notched 2.5 billion visits, up 19 percent from a year ago.
Although Zillow has the lion’s share of consumer eyeballs in the market, the real estate giant has been recasting itself over the past two years into a one-stop-shop for real estate transactions.
It now offers mortgage and title services, in addition to instant homebuying. In February, it paid $500 million to acquire Showing Time, a popular tour scheduling software.
Zillow’s mortgage business was another bright spot during the quarter. Mortgage revenue rose 169 percent to $67.9 million. The segment’s net loss was $2 million.
Zillow finished the quarter with $4.7 billion in cash and investments, up from $3.9 billion at the end of last year.