Describing Zillow as “Godzilla,” Kelman also conceded that Redfin’s iBuying program will never grow to 50 percent of the market.
Redfin CEO Glenn Kelman compared rival Zillow to Godzilla Wednesday morning and added: “I’m scared of them.”
“Of course we’re scared of them,” Kelman said to a packed room inside the Aria Resort & Casino at Inman Connect Las Vegas. “They have a ton of money and a huge audience and they’re really well-run.”
But, he added with a laugh, that isn’t actually a knock against Zillow.
“Calling them Godzilla, that’s a compliment,” Kelman said. “They’re a good company. They’re well-run. Rich [Barton] is a good CEO.”
The comments came during a wide-ranging interview about Redfin’s products and future. During the interview, Kelman also said that he is excited about Redfin Now, the company’s iBuying service, but expects its ultimate potential to be limited.
“We are not going to buy 50 percent of the homes for sale, or 20 percent of the homes for sale,” Kelman explained. “We don’t have enough money.”
Still, Kelman believes the option to get an instant offer adds value for sellers, many of whom will at least be interested in how much cash they can get for their homes on the spot.
“If you told someone, ‘I have a check in this envelope, do you want to see what’s inside before I give my listing presentation?’ they would want to see,” Kelman said.
The comments echo ones Kelman made earlier this summer, when he acknowledged during a conversation with Inman that there are tradeoffs when it comes to iBuying, but also argued that the point is to give consumers more options.
Kelman went on to say Wednesday in Las Vegas that the rise of iBuying generally is the result of current market conditions. The market is experiencing a well-documented housing inventory shortage, while at the same time some buyers struggle to get access to credit.
Kelman marveled that lawmakers are not more concerned about those conditions, which prevent some Americans from moving up in the market, but noted that in any case they have also fueled the rise of institutional buyers who can afford to pay cash.
“It’s a real liquidity crunch,” Kelman added. “That’s what’s created the iBuyer market.”
Finally, Kelman also touched on the scuttled partnership between his own company and RE/MAX. The relationship fell apart in May, after only two months, when Redfin unveiled Redfin Direct, a platform that allows consumers without buyer’s agents to place offers over the internet on Redfin-listed homes in Boston.
Shortly after the announcement, RE/MAX CEO Adam Contos said his company could no longer “continue with an official, corporate-level relationship at this time.”
On Wednesday, Kelman didn’t get into specifics about the situation, but said that “I think the companies felt this philosophical difference and went our separate ways.”