If you haven't seen the Saturday Night Live (SNL) skit from the Feb. 6 episode featuring the very funny Daniel Levy (known for Schitt's Creek) and, get this, Zillow (NASDAQ: Z) (NASDAQ: ZG), here's your chance. Spoiler alert: It's so spot on, even real estate agents who have no love lost for Zillow are admitting this skit hits home. This has to be good for Zillow.
A guilty pleasure
An updated colonial with mature landscaping? The Zillow browser groans with pleasure. A more aggressive Zillow browser sees a listing and wants to f-flip that house. Levy fantasizes about buying a big but affordable "gross" McMansion, something he says he'd never do (he apparently has something against North Carolina). Anyway, you get the gist. Zillow is irresistible and sexy.
The SNL skit about Zillow is aimed at older millennials and their supposed habit of staying up late at night indulging in a new guilty pleasure: scrolling through Zillow listings.
On a personal note, I have spent many a night scrolling through Zillow listings, and I'm not exactly a millennial. But I am a real estate investor, and I find the site fun and easy to use, certainly more fun than the staid multiple listing service (MLS) I have access to from being a real estate agent.
And speaking of real estate agents, some at my brokerage are also highly amused with the SNL skit, even if they aren't laughing about Zillow.
The agent beef with Zillow
Some real estate agents say doing business with Zillow is like dealing with the devil. Why the hostility?
- Zillow took a piece of the action: Before the internet, people found out about and promoted listings through the MLS, which only agents could access. Back then, people needed real estate agents to find and list their homes. People still use agents, of course, but with Zillow and its competitors like Redfin (NASDAQ: RDFN) and Realtor.com, everyone can find and list homes themselves.
- Zillow can be inaccurate: Sites like Zillow that rely on algorithms to price a home (the Zestimate) often miss the mark, over- or undervaluing property (usually overvaluing). Appraisals are still more accurate than algorithms in most cases. So if Zillow says the home is worth a certain amount and it really isn't, real estate agents might need to do a lot of explaining and convincing to their buyers and sellers, which can be annoying.
- Zillow generates leads: The biggest beef of all came about when Zillow started generating leads -- but only for agents who pay. Zillow is essentially charging agents for information they already have. And here's the rub: Zillow sells agent positions, meaning that if you click the "contact agent" button through Zillow (a huge buzzkill, by the way, in the SNL skit), you might not get the listing agent; you'll get the agent that bought the position.
Zillow stock soars
Barron's reports that analyst Heath Terry with Goldman Sachs (NYSE: GS) changed his rating on Zillow from "neutral" to "buy" right around the same time the skit aired. Terry predicts "ongoing growth acceleration in the real estate macro environment." He also predicts more people going online for real estate activity.
The Millionacres bottom line
This latest attention from the media definitely benefits Zillow by demonstrating its popularity -- and coolness. Alexa ranks Zillow.com the 21st most visited site in the United States, ahead of even Apple.com, which is No. 26. (Google.com (NASDAQ: GOOGL) is No. 1.) People are buying homes like crazy now in one of the biggest sellers' markets we've seen. And before they do, they browse Zillow.