ZipRealty, Inc. (NASDAQ:ZIPR)
The Company is a full-service residential real estate brokerage firm, using the Internet, proprietary technology and efficient business processes to provide home buyers and sellers with high-quality service and value.
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Sliding in through the backdoor. Over 200% gain in one year. Ehat is driving this small cap company. Real Estate Sells
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I am LOVING REIT's right now!
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Ziprealty has been trounced by the housing issues and loan issues popular in the press. These things do exist, however, in the long term, ZIPR will come out on top. They are an expanding discount broker, well suited to weather any market storm better than their competitors because they have built into their model cheap overhead and economies of scale on their website. They do depend on volume for earnings, however, and today the volume is not there. People are waiting to move, and the numbers will change eventually. Best of all, they are luring agents from other brokerages with the promise of regular paychecks and luring customers with the promise of great service and low commissions. I simply don't see how the brick-n-mortar brokerages can compete with their rates so much higher and their rents to pay on office space. They get away with a lot by reducing agent compensation if the agent fails, but that creates a poor incentive for those agents to stay. Once they start losing folks to ZIPR, I don't think they're likely to get them back.
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The future of buying and selling your home.
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Real estate commissions are going to get pinched as housing prices get tight. ZIPR offers discount rates, plus they send the buyer cash after the close of escrow. Who wouldn't use them? There has been some talk about competition from Google Base Beta. My foolish opinion is that Google Base Beta is going to BENEFIT internet based real estate. Google sells advertisements; they are not real estate brokers. Google will get the press, but not the commissions. ZIPR has cash and are expanding aggressively. This is a growth stock in a slowing sector, so don’t expect this stock to move until the street’s perception of real estate changes. Going against the tide is tough even for a good company, but this is where you find gems. At some point companies in this sector will exceed expectations. This will be a rewarding test of patience.
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This is going to pickup from now.
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The housing market is in a period of transition, with power shifting to buyers from sellers. It continues to show weakness and is expected to remain same for the remainder of 2007. Revenues for the first quarter ending March 2007 increased by 22% mainly driven by 21.5% increase in transactional revenues. However, net loss increased from $0.78 million to $3.10 million for the same period.
The company has revamped its earlier expansion plans and chalked out a new accelerated expansion strategy, which involves expanding into 8-12 cities from the earlier planned 6 cities. Company expects that its net transaction revenues for fiscal 2007 will increase compared to the prior year. Transaction volume is expected to increase on a year-over-year basis as its plans to enter new markets and average net revenue per transaction is expected to decline due primarily to a growing percentage of transactions occurring in less expensive housing markets and possible declines in median house prices in certain of its existing markets.
Year 2007 is expected to be a significant one for the company, with forecasted revenues to be in the range of $105 to $110 million, representing an increase of 10%-15% over 2006. However, net loss is expected to be in the range of $10 million to $13 million. Considering the above facts, the shares of ZipRealty offer good potential returns for long-term investors.
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I think real estate has a dim future.
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Housing sales on down - everywhere.
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Their business model has never taken off, and won't get a chance to in the downward real estate market.
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