To move is to grow: A look back on Zillow’s first quarter of 2021

In a typical year, spring begins the traditional home buying season, but the past year was anything but typical -- home buying never really slowed down.  The Great Reshuffling, driven by changes in what we want and need out of our homes, continues to fuel interest in moving.   

We expect demand to move to continue as we all adjust to a safer world ahead.  Our research team recently released a Mover Report that shows how the pandemic has, indeed, caused people to rethink where they live. It concludes that approximately 8 million existing homeowner households on the sidelines may enter a real estate market already beset by unrelenting demand. Additionally, 8.9% of consumers plan to purchase a home in the next 6 months, near a 20 year high, per the Conference Board’s April Consumer Confidence Survey. 

In fact, the reaction we got from our own employee base when we told them last March that we intended to have a more flexible workplace policy for the long term is an interesting case study in how remote work catalyzes the Great Reshuffling.  We found 30% more employees moved in the year following our announcement, compared to the previous, pre-pandemic year.  This time last year, we had employees in 25 states and we now have them in all 50.  This is a small sample, but it shows how the Great Reshuffling might play out as people gain certainty about their companies’ post-Covid workplace plans.  Zillow was an early embracer of a more flexible, long-term workplace model, so we are a few steps ahead in firming up plans.  But we expect that other companies will adopt more physical-location flexibility to varying degrees, simply because it’s hard to take back something that employees have been given and value.  That cultural shift should free up more restless households to list their homes and move, and Zillow will be here to serve as their trusted partner. 

Beyond the continued re-assessment of where we lay our heads at night, the housing market is underpinned by demographic and economic tailwinds that we expect to persist for the foreseeable future.  Millennials are moving up, baby boomers are downsizing, and in between, people of all generations are rethinking their lives. Despite recent shocks, mortgage rates are expected to be quite constructive for the foreseeable future, and are near all-time lows versus historical levels.  It appears that housing turnover should accelerate from the historically low rates of the past few years.  Along with an easier, digital transaction, all of these trends point to more liquidity and household formation long-term, which creates a healthy backdrop for the housing market and the business we operate.  

Millennials are moving up, baby boomers are downsizing, and in between, people of all generations are rethinking their lives.

Of course, the most powerful and important shift driving our business is the tidal shift moving consumers’ real estate dreaming, searching, and transacting from offline to online.  Just as they have in many other parts of their lives, consumers have experienced the greater convenience of a digital, technology-enabled home search, and some have experienced the magic of a digital transaction.  They will expect further advancements in the future, all enabled by technology.  

All of this energy around moving has created a Zillow Wave of sorts, and our customers are surfing it every day.  Just last week, TIME named Zillow one of the 100 Most Influential Companies for, in their words, “making an extraordinary impact on the world.”  A little grand, perhaps, but definitely a nod to the vast reserve of brand goodness that we have been building up over 15 years.  An uptick in pop culture recognition this past year has helped accelerate our traffic to a level that we previously would not have thought possible, which we expect to provide the fuel for years of customer growth into the future.  

Our top-of-funnel engagement with our customers translated into excellent results across Zillow’s suite of products and services.  Our flagship buy-side business, Zillow Premier Agent, once again generated the strongest results we’ve ever seen and our nascent sell-side business, Zillow Offers, continued to accelerate out of the pause we instituted in the pandemic. 

We are now beginning to register the benefits of the investments we have made across our product innovations for buyers and renters, as well as our major ventures into Zillow Offers, Zillow Home Loans and Zillow Closing Services, which gives us confidence that the bets we are making across the business are accretive, and we are allocating our time, our people, and our capital appropriately for the long term.

Fortune named Zillow one of its 100 Best Companies to Work For, based on our own employees’ feedback about working at Zillow in 2020, including how trustworthy, caring, and fair they felt Zillow has been during the pandemic, which forced most into Zoomland.  As we reimagine the future of our workplace, we are grateful for our flexible and talented workforce.

While our employees are doing well and our quarterly results are strong, we are oriented to the multi-decade journey in front of us-- the journey to digitize and simplify a huge industry, delivering more and more movers gracefully to their next homes. Pursuit of these growth opportunities deserves continued, appropriate re-investment of profits. 

As part of that journey, we recently launched a new advertising campaign with the tagline “to move is to grow.”  We think it wonderfully captures the essence of why moving is both exciting and daunting, and how we at Zillow are increasingly able to help our customers navigate the crossing. The campaign supports the expedition we are on as a company, as well.  Just as we’ve been re-orienting our employees and mission around transactions, we have the exciting task of re-educating our customers on who the new Zillow is, and what we can do for them.  Every signal we see based on data and customer feedback, is that customers expect and demand a more seamless experience.  This is Zillow 2.0.

There is no more tangible example of our customers’ enthusiasm for ease than the reaction to our recent announcement that many homeowners in Zillow Offers markets now can see that their Zestimate is a live, initial offer from Zillow.  That announcement alone drove record-breaking interest in the service, with requests coming in at levels we’d never seen before.  We have hit a nerve.  The continuing challenge going forward will be to translate customer interest into transactions. We have built a starting block for the one-click transaction, and are motivated every day to be persistent in delivering excellent experiences on par with e-commerce transactions in other parts of our customers’ lives.

Each customer who uses Zillow to move has a story.  One of those is first-time home sellers Jessica LaRue-Briscoe and her husband, Shawn (pictured, right, with their son).  They turned to Zillow when they were filled with anxiety about a planned move from Colorado to Texas, where they wanted their 2-year-old son to grow up near their families.  Zillow connected Jessica to an agent partner, Adam Unger, and he walked her through the selling process.  It was all new to her, and she was scared, and dubious.  “I’m going to take a gamble on you,” she told him.  Adam’s experience and professionalism kept their anxiety at bay, and Jessica and Shawn felt informed and prepared throughout their move.   

“I really feel like we were able to be connected with the best real estate agent for us because we went through Zillow,” Jessica said. The happy ending to their story is that their son is now spending time in Texas with Jessica’s grandparents, who are in their 90’s.

We’re motivated every day by customer and partner success stories like Jessica’s, Shawn’s and Adam’s.  Like our ad campaign says, to move is to grow, and it’s rewarding to see our employees, our customers, and our industry partners grow and thrive along with us.

For more details regarding Zillow Group’s results for Q1 2021, check out our Shareholder Letter.

Forward-Looking Statements: This blog post contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risks and uncertainties, including, without limitation, statements regarding the future performance and operation of our business and the current and future health and stability of the residential housing market and economy and our expectations regarding future shifts in behavior by consumers and employees. Differences in Zillow Group’s actual results from those described in these forward-looking statements may result from actions taken by Zillow Group as well as from risks and uncertainties beyond Zillow Group’s control. For more information about potential factors that could affect Zillow Group's business and financial results, please review the "Risk Factors" described in Zillow Group's Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission, or SEC, and in Zillow Group's other filings with the SEC.

This blog is adapted from my remarks to Zillow shareholders on May 4, 2021. For more, visit Zillow Investor Relations.