Facebook recently announced that they were expanding their offerings within their Marketplace, with home listings now available on mobile devices. While the present iteration is more akin to Craigslist than Zillow, we would be remiss not to see the looming threat posed to Real Estate Listing Services.
Currently, Facebook users can post a home listing to Facebook Marketplace, giving a direct channel with which to find prospective buyers. This means no Zillow, no Redfin, no Trulia- just Facebook and its 550 million users on either the Marketplace or buying/selling groups on Facebook monthly that now can shop for homes. This is 3 times larger than Zillow's average monthly unique user count of 175 million, and 22 times larger than Redfin's traffic.
In its current state, Facebook's real estate listings are fairly lackluster. There is no quality control of the posts themselves, and the site is completely lacking of search filters or helpful homeowner tools offered by the classic listing companies. They may get there at some point, but history says they may not need that right here and now in order to change the industry landscape. They may only need to be the search initiator to own the pipeline.
Consider the case of Google Flight Search. Google leveraged their massive user pool and their search tool's popularity to steal the grand majority of flight and ticket searches. With this, they were able to follow the model set by GDS's decades ago, leading customers away from the airlines' websites. In order to survive in the post-Google world, the airlines’ had to hand over pricing and inventory data, as well as control of the consumer's purchase journey, from finding the desired flight to deciding if they want a rental car. In a similar way, Facebook could own the initiation pipe.
It's the eventual commoditization of home listing services. Yes - not all of Facebook Marketplace's users are in the market for a new home, but the pure breadth of Facebook's reach warrants concern. Facebook could even become a meta aggregator, combining Zillow and Redfin's listings, for instance, with those from independents- time will tell. On the margin per volume, however, the existence of Facebook listings creates a huge competitive threat- one that the current listing services may not be well equipped to deal with.
