Rich Barton will return as chief executive officer to Zillow, the company he co-founded in 2005 and served as CEO until 2010. He replaces Spencer Rascoff, a co-founder who will remain on the board.

Barton had been executive chairman but will give up that post to assume his new role. Lloyd Frink, co-founder of Zillow, now becomes executive chairman.

Rascoff has led Zillow Group as CEO from 2010 through its initial public offering, overseeing 15 acquisitions and increasing the staff to more than 4,000 from 200. While those might be significant accomplishments, the leadership changes coincide with the release of the company’s fourth quarter and full year 2018 earnings report.

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While Zillow reported annual revenue of $1.3 billion in 2018, an exponential jump from the $30 million of revenue the company earned at the time Rascoff became CEO. Fourth quarter revenue of $365.3 million, up 29 percent year-over-year, driven by growth in Premier Agent revenue and the addition of Homes revenue.

Zillow’s fourth quarter performance wasn’t totally pristine.

The homes segment revenue was $41.3 million for the fourth quarter of 2018. Homes segment GAAP loss, before income taxes, was approximately $27.2 million, or 66 percent of segment revenue for the fourth quarter of 2018, and the homes segment Adjusted EBITDA was a loss of $20 million, or 48 percent of segment revenue. Mortgage revenue dropped 10 percent to $23.3 million in the fourth quarter of 2018 compared with the same time period in 2017.

Barton, who also founded Expedia in 1994 and co-founded Glassdoor in 2007, and Frink have remained active executives of Zillow Group since the company was founded.

“We created Zillow Group in 2005 to make the real estate shopping and purchase process easier,” said Barton. “Much of our original dream is just now becoming possible. We are at an inflection point in this quest, and the time is right to shuffle leadership seats.”

“Leading Zillow Group through its tremendous growth has been one of the most rewarding experiences of my life,” Rascoff said. “The company is well-positioned for Rich to now take the wheel as CEO through its next phase of growth.”

The sale of single-family homes fell 8 percent in January 2019, compared with the same period one year earlier.

That’s the fifth consecutive month of year-over-year declines in new-home sales, according to Redfin. But the size of the drop was smaller than in December in all regions except the West, where sales fell by more in January than they did a month before.

"The shrinking size of sales declines, paired with falling interest rates, may be helping to improve builder confidence, which has been on the rise since December," said Daryl Fairweather, chief economist at Redfin. "Still, buyers understand that the market is shifting in their favor and have become more sensitive to high home prices. That added sensitivity could continue to put a damper on the sales of new homes, which tend to be more expensive than comparable existing ones."

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Table 1: Shows the annual drop in single-family new-home sales in January 2019, and the final two months of 2018 (seasonally adjusted):

The trend in new residential sales the past few months has been similar to that of home sales overall, which fell 7.6 percent year over year in January, the sixth consecutive month of declines.

On a month-over-month basis, sales of new single-family homes nationwide dropped 0.2 percent in January.

Table 2: New-Home Sales Data from Redfin (January 2019)

https://youtu.be/La163Udl_3o

Bill Bodnar discusses balance sheet runoff from $3.8 trillion in bonds, which is similar in the effect it has on the economy to when the Federal Reserve clamps down on credit.

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