The housing market appears to have finally hit a bottom, real estate website ZillowCEO Spencer Rascoff told CNBC Wednesday.
According to Zillow data, home values — which have been in freefall since before the 2008 financial crisis — have bottomed, Rascoff said on CNBC’s “Squawk on the Street”. “So five years into the housing recession and down 25 percent from the peak, we are finally at a bottom.”
Rascoff pointed out that at this stage of the recovery, housing has become a local story. Values are up in markets like Phoenix and Miami, but are still down in places like Atlanta and Chicago. These trends are based on employment levels and negative equity in these cities, he said.
Mobile and rentals are becoming increasingly important to Zillow's growth. In the second quarter, a 75 percent surge in revenues to $27.8 million, helped by a strategy that allows the company to earn more through mobile using consumers.
The number of house-hunters using smartphones and tablets has trebled over the past year, the CEO noted. “More houses are viewed on a mobile device than a desktop,” Rascoff noted. “To put it in perspective, a year ago, 21 homes were viewed every second on a mobile device, today it is 63 homes.”
Rascoff also said that a smartphone user of Zillow is three times more likely to contact one of its premier real estate agent advertisers than a desktop Zillow user. On mobile, “real estate advertising is a service, not a nuisance,” he said.
Zillow is also in the process of investing in what it anticipates will be the “definitive rentals marketplace” following its acquisition of RentJuice, a company that provides software tools to the rental industry.
“This is huge space,” Rascoff said. “About $4.5 billion is spent annually in marketing rentals online.”
Zillow has 4000,000 rental listings currently, which attract around 6 million rental shoppers every month. Rascoff does not expect immediate revenue benefits from the rentals business. Still, once it creates a more substantial rentals marketplace, “then the revenue monetization opportunities are immense,” he said.