Zillow CEO on slow housing: ‘Not expecting rapid relief anytime soon’

Zillow Group installed a new chief executive officer in August, with longtime executive Jeremy Wacksman taking over from co-founder Rich Barton.

And in recent comments, Wacksman said he expects the housing recovery to proceed slowly and that Zillow aims to grow by increasing the share of transactions in which the company plays a role.

“We’ve been pretty modest about what we expect the housing market to do this year and next year,” he said in an interview. “We’re not expecting rapid relief anytime soon.”

Zillow reported third-quarter earnings that beat analyst estimates, as the company’s efforts to diversify revenue helped the company weather a sluggish homebuying market.

Zillow had adjusted earnings before interest, taxes, depreciation and amortization of $127 million. That was more than the average analyst estimate of about $108 million in data compiled by Bloomberg.

Zillow’s core business — selling marketing services to real estate agents — has been under pressure since higher interest rates depressed home sales in the middle of 2022. The company generated $405 million in revenue through its residential business. It added $123 million from its faster-growing rentals business, and $39 million from mortgages.

In addition to slower home sales, the residential real estate business is grappling with fallout from a legal settlement affecting agent commissions. Industry participants now are embroiled in a new fight over rules governing how home-sale listings are distributed.

The company projects adjusted cash flow to range from $90 million to $105 million in the fourth quarter, according to a letter to shareholders. The midpoint is lower than the $102 million analysts expect on average.

Zillow shares rose more than 11% in late trading. They had closed at $56.08 Wednesday, down 1.1% since the beginning of the year.