How the Housing Cool-down Will Test Companies Like Zillow, Especially in Seattle
The i-buying movement has been on the rise recently, especially within the last year. But with the housing forecast in 2019 indicating the market will continue to cool down, a new challenge is posed for electronic real estate companies such as Zillow and Redfin—and the challenges may be even greater in Seattle.
Though the CEOs of these companies continue to express confidence, their actions are already more conservative than last year. Zillow and Redfin, for instance, are limiting the number of homes they’re promoting. These companies rely heavily on user traffic and according to GeekWire, their response to changing market conditions just may be that they will reduce their prices. While Zillow and Redfin don’t deny this, they also have said they believe their programs will work better with slower traffic.
Lead executives are focused on technology and convenience. To be sure, most home buyers begin their searches online, but that isn’t replacing the human factor. According to the National Association of REALTORS® 2017 Real Estate Report, nearly 90 percent of buyers used a real estate agent or broker to purchase a home, a figure that was up from only 69 percent just fifteen years earlier.
It’s also hard to forget that it was only a couple of years ago that Zillow faced backlash over the misrepresentation of home values through their popular Zestimate feature. Accounting for the nuances of a home’s value without incorporating a human element.
It isn’t news that Seattle is currently facing an affordability challenge. And a lack of affordable inventory paired with the cooling off market just might damper the i-buying movement. It is expected that home sales could slow in 2019, which means less buyers will be using sites such as Zillow or RedFin to find housing altogether. There is, however, a bright side.
Although the housing market is projected to cool off in 2019, this is a good thing. A slowdown will bring more balance to the Emerald City and could allow Seattle and other tech hubs—such as San Francisco—to adjust into a more stable pace of home value appreciation.