Third Residential Web Site Goes Public

HomeAway, Inc., an Austin, Texas based site that matches home owners with travelers looking for vacation rentals and sales, priced eight million shares at $27 each this morning to raise $216 million in its initial public offering under the symbol AWAY. The Austin, Texas-based online marketplace for vacation properties priced at the top end of its $24-$27 price range.

HomeAway became the third publicly held residential listing site and the second to go public this summer. Zillow.com filed for a $51.75 million initial public offering in April and is still in its quiet period. In its filing, Zillow didn’t say how many shares it planned to sell, nor how it would price each share. Zillow lists properties for sale nationwide and links borrowers to lenders through its mortgage platform.

Move, Inc., which operates Realtor.com, MortgageMatch.com and other real estate sites has been public since 1999, when it was known as Homestore. In an industry where no franchisor or brokerage is publicly held, the movement towards Web site IPOs is an unusual trend, and certainly an indication of the capital needs for technology-based companies.

Some observers see the investor interest in real estate web sites as a good sign for the companies that have survived the worst real estate economy in recent times.m Homeaway’s business model is linked to home sales because it facilitates vacation homeownership by making it easier for owners to rent out their properties when they aren’t using them. As it gets easier for property owners to manage listings, HomeAway expects “the supply of vacation rentals to grow, primarily driven by an increased number of vacation properties actively used for vacation rental and an increased utilization of vacation rental properties.”

“If Zillow does meet its goals for this IPO filing, whatever those may be, it’ll be a success story in more ways than one. The company has certainly seen more than its share of rough markets in recent years, and the fact that it’s still around and appears headed toward profitability at some point is kind of remarkable on its own,” wrote Curt Woodward of Xconomy.com.

Others have doubts. “Question marks remain, however. The company (Zillow) has never seen a profit. We have yet to see a market valuation. And a protracted real estate crisis sheds a harsh light on Zillow’s value prop. The company even says so itself in its amended prospectus: “Our financial prospects are significantly dependent on real estate shoppers using our services. Real estate shopping patterns depend on the overall health of the real estate market, which has been in decline since 2007,” said Lee Simmons, an Austin business writer.