Will Amazon Be Your Next Real Estate Broker… Parked at Whole Foods?

Jeff Bezos (Photo: David Ryder/Getty Images)

Amazon.com, the online, no-bricks-or-mortar, mega e-commerce consumer sales site that just bought Texas-based Whole Foods, may be getting into the real estate business.

Holy canoli — I just had a thought: What better place to advertise local listings than the local grocery store!

Inman reported yesterday that, on Tuesday, while we were all thinking of what to buy on Amazon Prime Day, Amazon very quietly debuted a new page called “Hire a Realtor.” It was under the Home and Business Services section. You clicked over, entered your zip code, then got a “Coming Soon” message.

It looked as if Amazon was teasing a service that would allow consumers to hire a real estate agent through Amazon. And they had it on the site on one of their most potentially high-trafficked days.

But by Wednesday afternoon, the page had been taken down.

Many real estate experts agree that it is only a matter of time before someone, anyone, takes real estate purchasing online. Don’t forget, Zillow was started by the folks who started Expedia.com. Once consumers began making their own travel plans online, travel agents were out. But like I told a Realtor last week, one bad vacation is not going to hurt you like buying the wrong home.
 
But what if the process was streamlined and made oh-so-easy?
 
When it comes to lower-priced homes or investor trading, the ibuyers (OpenDoor, Instant Offers) could take out a few Realtors. Which would then take out a few other referrals to title and mortgage, etc. I have said for years that the companies best poised to do this best are Google, Facebook, and Amazon. And this was before Amazon’s acquisition of Whole Foods. I cannot imagine the marketing potential for hyper-local real estate promotion with every Whole Foods shopper. My brain is going wild with ideas.

Facebook and Google, by the way, have hurt the publishing industry so much that newspapers have banded together to ask the Justice Department for a legal shield to fight them. The News Media Alliance is being created in order to negotiate with major online platforms like Google and Facebook,  because they are killing it in the digital ad spending world. Which means, they are killing newspaper’s ad revenues. “A recent report from eMarketer estimated that Google alone will account for 40.7 percent of the $83 million that will be spent on U.S. digital ads in 2017, more than double Facebook’s share. No other company will come even close.”

Overall weekday circulation for newspapers declined from around 62 million in 1990 to an estimated 34.6 million in 2016, down 8% from the previous year, according to Pew Research Center. The media research organization also estimates that digital circulation for several major publications experienced flat growth in 2016. Advertising revenue for the industry as a whole totaled $18 billion in 2016, down 10% year-over-year. At its height in 2006, the industry brought in $46 million in ad sales. 

I have little sympathy for big print media, when newspapers swallowed other newspapers to create one-paper towns, when they are biased, and when they had near monopolies of the classified ad market that were ridiculous. Used to cost $500 or more to run a one-day ad for a secretary. When the internet hit, instead of seeing the potential and adapting, they aloofly ignored it. 
 
Which brings me back to real estate and why I have been watching this ever so carefully. Amazon’s “preview” jolted investors like a triple espresso to figure that Amazon was dipping into real estate, seeking to compete with Zillow and Redfin’s huge marketshare. It was enough to drive down Zillow’s stock prices. Zillow’s revenue was $846 million last year based on advertising sales, though the company continues to report losses, $267.2 million in 2016. (It’s all in the book keeping, right?) You know that Redfin just unveiled a $100 million IPO, the first tech-enabled brokerage to go public. This is huge and if you make your living in the real estate industry, or even want to sell your home, you should pay attention, as a major NYC broker told The Real Deal:
“They are the first tech enabled brokerage to go public so it’s a pretty big event in my opinion if you believe that technology is changing real estate,” said Aaron Graf, CEO of New York-based brokerage LG Fairmont. “If the IPO is successful, I think you’ll see more venture capital money flowing into real estate.”
More VC, or more companies with huge swaths of market share? Like Amazon? Stay tuned.
 
Top 10 real estate websites’ traffic shares:
Zillow: 36 million
Trulia: 23 million
Yahoo! Homes: 20 million
Realtor.com: 18 million (owner by the National Association of Realtors)
Redfin: 6 million
Homes.com: 5 million
ApartmentGuide: 2.5 million
Curbed: 2 million
Remax: 1.8 million
Hotpads: 1.75 million (owned by Zillow)
 

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