Zillow Group Inc (Z)

Zillow Group (Z) stock plummeted by 13.49% due to the National Association of Realtors (NAR) settling a series of lawsuits brought by home sellers alleging the industry has conspired to boost agent commissions. This settlement could potentially lead to reduced broker commissions on real estate sales, impacting one of Zillow's key revenue streams.

• NAR's Settlement Details: The NAR announced an agreement to settle all outstanding litigation against the organization and its members in exchange for a $418 million payment made over roughly four years. The NAR denies any wrongdoing. As part of the settlement, the NAR will implement a new multiple listing service (MLS) rule prohibiting offers of broker compensation on the MLS, though consumers can pursue this off-MLS through consultation with real estate professionals. Additionally, the NAR will enact a new rule requiring MLS participants working with buyers to enter into written agreements with those buyers.
• Impact on Zillow: The settlement and rule changes are expected to make it easier for home buyers to negotiate fees with their agents and could lead to more buyers forgoing agents altogether. This development is likely to reduce the commission rates real estate agents can collect, potentially resulting in fewer agents maintaining their active licenses.
• Future Outlook for Zillow Investors: While Zillow has been diversifying into other segments of the real estate market, nearly half of its total revenue last quarter came from buy-side residential transactions. Around 80% of Zillow's Premier Agent program revenue came from buy-side deals. The settlement and subsequent rule changes, set to take effect in July, could significantly impact Zillow's revenue from real estate transactions, leading to a challenging road ahead for the company.

Zillor Group (Z) stock plummeted by 5.39% due to an insider selling transaction. Jeremy Wacksman, the Chief Operating Officer, sold 23,555 shares of the company on February 16, 2024, according to a recent SEC filing. Over the past year, the insider has sold a total of 88,896 shares, indicating a significant selling trend without any insider purchases. This latest transaction is part of a broader trend observed over the past year, with 47 insider sells for Zillow Group Inc. The insider's recent sale could be of interest to investors monitoring insider activity as an indicator of corporate confidence and potential future stock performance. Investors and analysts often closely follow insider transactions as they can provide insights into the insider's view of the company's current valuation and future prospects.

Zillow Group, Inc. Stock (Z) dropped by 6.98% from $38.97 to $36.25 in the trading on Tuesday October 31, 2023. The reason why Z stock down today include:

• Brokers commission verdict: A Missouri jury ruled the National Association of Realtors colluded with brokerages to keep agent commissions high, awarding nearly $1.8 billion in damages. Zillow was not named in the lawsuit and is thought to be digitally savvy disruptors to the traditional brokerage industry. Meanwhile, though Zillow doesn't charge direct commissions on sales, it makes money by charging real estate agents for buyer leads.
• Rise in mortgage rates: Zillow has already been reeling from the frozen housing market, brought on by the rapid rise in mortgage rates on top of higher home prices, which has been freezing out many would-be buyers. The tough stretch has continued recently, as long-term Treasury bond yields have shot up from the low 3% range earlier this year to nearly 5%, and mortgages tend to be priced off these long-term debt instruments.