I read these remarks in our Sandicor MLS this week as I was running the “comps” for a client considering selling her investment duplex:
“Add a 3rd unit and make the income sore.”
I added the emphasis, of course. It seems that this agent was targeting a pretty small buyer pool. Most of us already enjoy sore income, thank you very much. But not the founding fathers of a large web-based home search and valuation site.
There was some big news in real estate this week. In case you missed it, here is a summary brought to you by the letter “Z.”
Zillow went public in a big way. Now, I’m just a real estate blogger, not a professional journalist, so I may have some of my facts wrong here (like all of them). But, here is what went down with their Initial Public Offering based on my sources. (My sources, by the way, are Twitter and the guys on television who were talking about it when I passed by the family room on my way to let the dog out back to do what he does when he isn’t sleeping, eating, or sleeping).
- Zillow’s stock debuted at $18 or $16, or maybe it was $20 per share. Let’s say it involved two digits, just to be safe.
- Within Zeconds, the stock price soared to a trillion dollars a share.
- Their stock price has since settled down to something closer to the price of dinner for two at Outback Steakhouse including a blooming onion.
- The “street” considers Zillow’s value to be slightly more than the value of Kyrgystan, and last time I checked, Kyrgystan was worth a lot.
- Zillow has yet to make a profit.
That last part, as a potential investor, does not concern me so much. The important thing is that they are losing less every day! And this got me thinking.
I’m taking the San Diego Home Blog public. And, why not? We, just like Zillow, have failed to make a profit during our illustrious half-decade of blogdom, unless you count the residuals I have enjoyed from my Vook – the one I promoted on the side bar here for, like, EVER! (You will get the details in my prospectus, but let me just say that my total Vook earnings were well into the four figures. And two of those figures were to the left of the decimal point!)
So, we aren’t quite profitable, but that isn’t stopping me. What’s important is that we have huge upside potential that a little infusion of capital could nicely fuel. We have watched our readership soar over the years – from our initial two sets of eyeballs (that would be Steve and me) to almost five! (I say “almost” because Steve doesn’t come around these parts much anymore.)
And we aren’t much different than Zillow when you think about it. We have agent reviews. Look up at the top – where it says “Report Card.” There they are, just like I said.
We have a home search feature, too. Granted, it’s just the active San Diego county listings, but that makes sense since my Volkswagen Beetle has a fairly small gas tank. And even if I could make it to Salt Lake City in time to open up for the 2:00 pm showing, traffic coming back would be a bear, making it tough to get home in time to let the dog out. And catch the latest Zillow news from Wall Street.
Oh, I know. They have Zestimates. Big whooptidoo. Perhaps you have forgotten that we provide valuation estimates all the time. Just last month, I wrote about how it “feels like” the market is… The fact is, I don’t remember what I wrote. That’s not the point.
Zillow CEO Spencer Rascoff may be on television all the time sharing his market trend observations, but we do it right here. Granted, I haven’t developed a fancy algorithm – yet – but I am working on one. I call it the “I’m thinking of a number” valuation method. It’s in Beta. But, in the meantime, we do have some pretty powerful tools for measuring value – like past sales information and lock box keys that allow us to actually see the homes in question – and all you have to do is ask.
Really, then, the only thing that separates us from Zillow is the fact that they have effectively slapped a service mark on one of the worst letters in the alphabet from a Scrabble perspective. That leaves 25 other perfectly fine letters available for the taking. I pick “D.”
You don’t take a company public overnight, of course. This will be a process. First, I will have to relaunch our site as “D San Diego Home Blog.” We will sell Zip codes on our site (or as I like to call them, “Dip codes”), because we have to show our investors that we are in growth mode. I’m thinking the ads will be million dollars apiece (with a twelve month contract), because I’m thinking a million dollars sounds like a bunch of money.
Please be aware that I can’t actually display your ad on our site, because my coding is a little rusty and I’ve got this appointment with the termite guy later, but I will send you a t-shirt branded with you’re Dip code. You can wear it everywhere, like to the grocery store and on listing appointments and stuff. Call me. Our operators are standing by.
And we will have a page that tells visitors (all four of us — plus Steve, if he ever shows up again) what their home is worth. Since it suddenly occurred to me that there is no “D” in “I’m thinking of a number”, our approximation will be called “D-Valuation.” To save time and money (because I hear that investors like efficiencies in their business holdings), every answer for every home will be the same. (Answer: A lot less than you think.)
The ticker symbol poses a little problem. Zillow got their “Z,” but some dumb company called Dominion Resources, Inc. got my “D.” (And they are currently trading down 48 cents in after hours trading – hah!) Looks like I’ll have to give this one some thought.
So, congratulations to the folks at Zillow. I do mean that. And by “mean that,” I mean it would be really fun if someone bought me lunch at the Inman Real Estate Connect conference next week, because you guys are all kind of super rich now (and I mentioned "Zillow" in this post about a zillion times). Or at least give me a Zillow beer mug or something, just to hold me over until I can join you at the big table on Wall Street.