HouseValues, a locally-based online real estate agent lead generator has been swirling the drain since the national real estate market first started slowing down last year. They were in the news again yesterday, as their CFO jumped ship.
For the second time in a year, Kirkland-based HouseValues is restructuring its executive team and laying off employees.
In a filing with the Securities and Exchange Commission on Wednesday, the online real-estate company announced its chief financial officer, R. Barry Allen, has resigned and 45 jobs are being eliminated.
Allen came to HouseValues last January during a restructuring that eliminated the chief operating officer position on as well as 60 other jobs. It also closed its Yakima call center in July, eliminating 100 jobs.
Anybody want to make wagers on how much longer HouseValues will last? I’ll be surprised if they still exist at this time next year. With the pressure of Zillow’s free service on one side, an increasingly slow market on the other, and generally poor service to their only real customers (real estate agents), I’m amazed they have lasted as long as they have.
(Elizabeth Rhodes, Seattle Times, 01.24.2008)
Zillow was the dagger to an already declining PPS. They still have over 3.00 in cash on the books on last release. But, now after dropping 2.5 mill on Active Rain who knows. What a model though. Getting money from Realtors who have none. Leads generated with names such as Mike Hunt angering Agents daily. locking Agents into 12 month contracts and sending them to collections. Put a fork in it already.
Ray Pepper
Broker
http://www.500Realty.net
This article:
http://online.wsj.com/article/SB120111917285710781.html?mod=hps_us_whats_news
“Housing Slump Starts to Hit Stronger Cities”
makes some interesting references to Seattle’s rising inventory and predicts continued price declines here.
I have a daughter who is a Controller in the Sillicon Valley. She told me that the most significant indicator of corporate implosion in tech is the departure of the CFO.
Given the business plan no one will put Home Values on life support.
THE BIG RATS JUMP THE SINKING SHIP FIRST
Mike Hunt is my neighbor. He wants to buy a house because he needs a place for his pink ponies.
“She told me that the most significant indicator of corporate implosion in tech is the departure of the CFO”
I’d say it’s also a good indication of the likelihood of future investigation by the IRS too :-)
This was just a lead generating machine for RE agents and brokers, no longer viable in a stagnant / declining market. They’re history for sure.
While the press seems to indicate that HouseValues is a victim of a falling real estate market, the reality is far from this. The decline of HouseValues started much earlier, during the boom times itself. It had very poor engineering and no cost controls right from the start. Engineering/IT seemed to drag on and on and budgets were blown. Eventually the engineering guy M*** J****** was asked to leave. However, by then much newer startups like Redfin/Trulia/Zillow had begun to differentiate themselves and HouseValues was left far behind in a race, that was theirs to lose.
What a difference a guy makes!
Disbelief said: “I’d say it’s also a good indication of the likelihood of future investigation by the IRS too ..”
Actually not. SEC for the publicly traded maybe, but not the IRS.
BTW, the other red flag is fleeing Sales Reps. Not applicable to this business model. The classic example was to watch Floating Point Reps move to Sun Microsystems.