The real estate bust is here. Predatory lenders are circling. Cut-rate real estate agents are sharpening their claws. But at least one vulture has been on a diet: ZipRealty.
ZipRealty, a discount Internet real estate brokerage that shares agent fees with buyers, on Wednesday reported third-quarter net income of $622,000, or $0.03 per share. That compares with net income of $2.9 million, or $0.11 per share.
Overall sales swooned too. ZipRealty third-quarter revenue dropped more than 7 percent to $26.2 million from $28.2 million a year ago. Amid the carnage, the Internet broker reported the total value of its real estate transactions fell 11.8 percent to $1.2 billion from $1.36 billion.
The company also reported the number of ZipAgents increased to 1,747 from 1,669 a year ago. The number of deals closed decreased 6 percent to 3,467 from 3,689 a year ago. What's it all add up to? For brokers, individual net revenue per transaction decreased 1.9 percent to $7,332 from $7,475.
Shares of ZipRealty fell 0.42, or 5.26 percent, to $7.56 in after-hours trading.
The bright spot for ZipRealty is that, excluding nonrecurring costs, the company reported earnings per share of $0.07, down from 0.11 a year ago. However, that figures beat analyst estimates of $0.01 per share, according to Thomson Financial.
A Buyer’s Market
For Emeryville, California-based ZipRealty, the signs of an impending downturn have been as prominent as the flood of “open house” signs dotting U.S. neighborhoods. But now, ZipRealty earnings paint a picture of a housing market in shambles for web brokers.
For buyers, the news is all good: Cheaper houses, more agents, an increase of houses to pick from, lower fees and home prices.
But that could mean lean times ahead in the real estate industry. ZipRealty forecast full-year revenue will range between $90 million and $92.5 million, just shy of average analyst estimates for $93.05 million. Last year, ZipRealty did $93.41 in revenue.
Contact the writer:SMartin@redherring.com
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