Rental Housing during Economic Downturn
The real estate market is clearly feeling the pinch of the bad economy. According to compete.com, web traffic of real-restate companies like Trulia, Zillow has decreased in the month of September by 11.8% and 2.2% respectively. Recently, Zillow decided to lay off 25% of its workforce. Rich Barton, CEO of Zillow.com said in his recent posting titled “Difficult times, Difficult decisions” on October 17, 2008:
This week we are reducing our workforce by 25%. This was an incredibly painful decision for me and the leadership team, but, in the end, we concluded that we had no choice but to securely batten down the hatches as we sail into a major economic storm.
Redfin laid off 10% of their workforce earlier in the month. The current time is clearly proving bad for real-estate companies.
Twelve months ago, many of the CEOs were still optimistic about growth in real-estate. I remember back in November 2007 at the ILM (Interactive Local Media) 2007 conference hosted by the Kelsey group, the CEO of real estate companies like Zillow, HomeThinking, were very optimistic in their outlook on real estate traffic and online revenue. Obviously, they were oblivious of the ongoing trend. They cannot be blamed for their wrong sight. Even the experts at Wall Street are taken by surprise by the current rapid turmoil. It was extremely difficult to predict that we would see the worst economic slump since the Great Depression.
Rental market is faring better than real estate. According to the latest Harvard report on “State of the Nation’s Housing in 2008“,
Rental housing is reasserting its importance in US housing markets. With so much turmoil on the forsale side, many households have reconsidered their financial choices and opted to rent rather than buy.
In the current times, it is getting increasingly difficult to get loan to buy a home. People who are not able to secure credit to buy homes are turning to rental housing. In a way, the collapse of real estate bubble is converting into greater demand for rental housing and people are looking for affordable rental housing.
We hope to do our share to help people find their new place easily. Cazoodle Apartment Search provide comprehensive listings for major metropolitan areas like New York City, San Francisco Bay Area, Chicago, Los Angeles. And we are expanding quickly to other locations like Miami, Philadelphia, Detroit. Our plan is to cover the top 25 metropolitan areas by early next year. We are seeing increase in traffic month over month and hope to continue the growth as we expand to new locations and improve the overall system too. Cazoodle is a group of immensely smart, talented and passionate people that are constantly working to achieve their vision.
Arpit Jain
Developer Team
November 29th, 2009 at 10:03 pm
I am hoping the market comes back in the larger cities as you mentioned, we do business in New York, San Francisco, Chicago and Los Angeles and fewer rentals mean fewer people moving - its a ripple effect that hurts us all!