ZipRealty Announces Third Quarter 2009 Results

ZipRealty, Inc. (Nasdaq: ZIPR) today announced financial results for its third quarter ended September 30, 2009. For the third quarter, net revenues were $35.4 million, a 12.8% increase from the $31.4 million reported in the third quarter last year. The Company’s net loss for the period was $0.8 million, or $0.04 per share, compared to a net loss of $1.7 million, or $0.08 per share, in the year-ago period. Pro forma net income per share, excluding the effect of stock-based compensation, was $0.01 for the third quarter of 2009, compared to a $0.03 pro forma loss per share for the same period a year ago.

Pat Lashinsky, President and CEO of ZipRealty, commented, “During the third quarter, ZipRealty experienced strong transaction volume increases, and for the second consecutive period, a slight increase in average transaction revenue per close. With our highest agent productivity in two years and tight cost controls, we were pleased to deliver pro forma profitability for the quarter.”

Lashinsky continued, “ZipRealty helped customers transact more than $1.5 billion in residential property during the third quarter, and our 96% customer satisfaction rating says we are delivering what real estate customers seek today. Our unique combination of great online technology and knowledgeable local agents propelled double-digit revenue growth for the quarter, and our corporate focus on efficiency has kept our financial position strong and our cash balances virtually flat from March of this year.”

The Company announced the following operating metrics for the third quarter of 2009:

• The total value of real estate transactions closed increased to $1.54 billion in the third quarter of 2009 versus $1.36 billion in the same period in 2008.
• The total number of transactions closed was 6,557, compared to 5,019 in the third quarter last year.
• Average net transaction revenue per close decreased approximately 13.8% to $5,284 from $6,130 in the third quarter of 2008.
• At September 30, 2009, ZipRealty employed 3,205 ZipAgents, up from 2,814 agents at the end of the third quarter of 2008 and 3,172 agents at June 30, 2009.

Total Number of Home Listings Down Further in September According to ZipRealty

The U.S. housing market continues to show promising signs of stabilization according to a monthly survey of home listings conducted by the national real estate brokerage ZipRealty.   September marks the fifteenth consecutive month-over-month decline in the number of home listings, based on Multiple Listing Service (MLS) data from 26 metropolitan areas where ZipRealty operates.

The combined total number of single family homes and condos listed for sale according to MLS data decreased in September by 1.8 percent compared to August, bringing the total number of active listings in 26 major U.S. markets to 642,308.

Other highlights from ZipRealty’s September Housing Inventory Index (http://ziprealty.typepad.com/marketconditions) include:

--  While most markets saw inventory decline, Baltimore added 1.5 percent more properties in September compared to August,
and Boston increased by 2.2 percent.
--  Markets with significant month-over-month inventory declines include Austin (4.7 percent), Los Angeles (4.7 percent),
Las Vegas, (4.4 percent) and Orange County (4 percent). Los Angeles continues to show signs of stabilization with falling
inventory and rising list prices.
--  Phoenix showed little to no movement in September inventory in addition to flat listing prices.
--  Inventory in Las Vegas continues to decline but the median list price remained unchanged for the sixth consecutive month,
indicating that the market may take longer to rebound.

To view other local market housing conditions, visit ZipRealty's updated blog: http://ziprealty.typepad.com/marketconditions.
To view all MLS-listed homes across all major metropolitan areas that ZipRealty operates in, visit
http://www.ziprealty.com.  For regular updates and housing trends, follow ZipRealty on Twitter at: @ZipRealty
(http://twitter.com/ziprealty).

About the ZipRealty Housing Inventory Index

ZipRealty pulls data from Multiple Listing Services in 28 of the major metropolitan areas where the real estate
brokerage operates in nationally. The data in this report is based on properties listed for sale according to
the MLS in the metropolitan areas identified.  In September 2009, ZipRealty reported data for 26 metros.
Due to changes to how homes are tracked by the California MLSs, data from San Diego and Bakersfield/Fresno,
California. was omitted for September.  The company pulls all data on or about the last day of the month for each
of these markets.  Additionally, the metropolitan areas ZipRealty cites as part of its monthly report are
defined by the brokerage, and may differ slightly than standard DMAs.

ZipRealty Inc. Announces General Counsel Transition

ZipRealty announced today that Larry Bercovich, Vice President and General Counsel, will be leaving the company to pursue other opportunities. He will continue to serve as the Company’s General Counsel through October 31, 2009, ensuring a seamless transition for all legal matters.

Samantha Harnett, Vice President and Assistant General Counsel will be promoted to Vice President and General Counsel, effective November 1, 2009. Ms. Harnett joined ZipRealty in 2005 and since that time has contributed significantly to the strategic direction of the company’s legal, business and human resource functions. As General Counsel, Samantha will provide valuable strategic input to all aspects of ZipRealty’s business and manage the Company’s legal functions and team.

Pat Lashinsky, President & CEO of ZipRealty commented, “On behalf of the entire executive team, I want to thank Larry for his contributions to ZipRealty’s growth and success. Since joining the Company in 2007, he has played an important role leading our legal team. We are also excited that Samantha will be taking on the General Counsel role. Over the years, she has demonstrated exemplary legal skills and leadership capabilities, and continually demonstrates values consistent with those of our core culture.”

Total Number of Home Listings Down in August, According to ZipRealty

Worst May Be Over Nationally, Though Markets in Florida Continue to Show Signs That the Bottom Hasn’t Hit Just Yet

The number of homes for sale declined nearly three percent in August, compared to July, and is down more than 23 percent compared to a year ago, according to a monthly local market survey of home listings based on Multiple Listing Service (MLS) data in 25 metropolitan markets conducted by the national real estate brokerage ZipRealty (www.ziprealty.com) (NASDAQ: ZIPR).

Other highlights from ZipRealty’s August Housing Inventory Index (http://ziprealty.typepad.com/marketconditions/) include:

• Housing inventory in the San Francisco Bay Area declined 7.6 percent in August, compared to July, and is down 48.9 percent year-over-year — the largest month-over-month drop across the 25 markets surveyed.
• Other markets with significant month-over-month declines include Orlando (5.1 percent), Washington, D.C. (4.7 percent) and Boston (3.9 percent).
• Salt Lake City remained statistically unchanged in August with no movement tracked in inventory.
• The worst may be over in Las Vegas, with home listings declining 3.4 percent in August but the median list price unchanged for the fifth consecutive month. Inventory in Las Vegas is now at the lowest level ever tracked by ZipRealty in the four years that ZipRealty has tracked this information.
• The Florida housing market continues to show signs that it has yet to hit bottom, as housing inventory and median list prices slipped in Miami, Orlando and Tampa. Inventory in Jacksonville increased slightly (.01 percent), though the median list price declined 1.39 percent to $177,000.

ZipRealty Announces Second Quarter 2009 Results

ZipRealty announced financial results for its second quarter ended June 30, 2009. For the second quarter, net revenues were $32.1 million, a 5.6% increase from the $30.4 million reported in the second quarter last year. The Company’s net loss for the period was $2.4 million, or $0.12 per share, compared to a net loss of $1.7 million, or $0.08 per share, in the year-ago period. The pro forma loss per share, excluding the effect of stock-based compensation, was $0.07 for the second quarter of 2009, compared to a $0.04 pro forma loss per share for the same period a year ago.

Pat Lashinsky, President and CEO of ZipRealty, commented, “Despite a challenging environment, ZipRealty remains focused on its growth plan: investing in our industry-leading website, growing our agent force, and gaining market share locally. In the second quarter, we again achieved strong year over year growth in transaction volume, and we saw a slight increase in average transaction revenue per close compared to the first quarter, caused by fewer non-standard transactions in our mix, falling inventories in most of our markets, and greater stability in median prices.”

Lashinsky continued, “We expect 2009 to remain challenging, as unemployment and the economy create near-term obstacles. Yet, we are focused on the long-term with a commitment to innovation in our website and services as we further strengthen the centralized technology we provide to our productive local agent force. We see opportunities to improve and leverage our unique relationships with consumers and local agents, and we are excited about a new marketing alliance with Bank of America that we believe will do just that. Finally, we believe our healthy balance sheet represents another competitive advantage for ZipRealty, and our cash balance is virtually flat from the first quarter of 2009 as we focus on moving toward profitability while continuing to invest for growth.”

ZipRealty announced the following operating metrics for the second quarter of 2009:

• The total value of real estate transactions closed increased to approximately $1.38 billion in the second quarter of 2009 versus $1.32 billion in the same period in 2008.
• The total number of transactions closed was 6,017, compared to 4,681 in the second quarter last year.
• Average net transaction revenue per close decreased approximately 17.4% to $5,269 from $6,381 in the second quarter of 2008.
• At June 30, 2009, ZipRealty employed 3,172 ZipAgents, up from 2,559 agents at the end of the second quarter of 2008 and 2,989 agents at March 31, 2009.

ZipRealty Teams with Bank of America

ZipRealty (www.ZipRealty.com), the nation’s ninth largest real estate brokerage, announced a new mortgage feature, provided by Bank of America Home Loans, that will help streamline the home buying process for today’s busy home shopper.

The ZipRealty-Bank of America Home Loans alliance allows ZipRealty users to access current mortgage rates and financial calculators while shopping for their home online. By September, home buyers using ZipRealty will be able to research which types of loans best fit their needs, and get pre-approved or apply for a mortgage online. In addition to providing online tools, Bank of America Home Loans has committed to provide excellent customer service to ZipRealty clients.

“Bank of America Home Loans was a natural fit for ZipRealty, as we are both committed to delivering customers the best information and service experience,” said Patrick Lashinsky, ZipRealty president and CEO. “We take our 96 percent customer satisfaction rating very seriously, and are happy to align with other companies who focus on customer service.”

The Mortgage Center, provided by Bank of America Home Loans, is the latest website feature this year from ZipRealty, the most trafficked real estate brokerage website. Earlier this year, the Company added such features as customer generated agent-ratings, neighborhood mapping and free-form search features.

“We look forward to working with ZipRealty, which shares our strong commitment to customer service,” said Blair Allan, national strategic business alliances executive for Bank of America Home Loans. “Our strategic business alliances help real estate professionals build their businesses, while helping their customers realize their homeownership goals.”

ZipRealty Announces Stock Option Exchange Program

ZipRealty, Inc. announced today that the company is commencing a stock option exchange program for stock options held by its current employees and officers. The company believes the stock option exchange program will have a positive effect on the retention and motivation of participating employees. The tender offer will commence today and will expire, unless otherwise extended by the company, in its sole discretion, at 9:00 p.m. (Pacific Time) on July 24, 2009.

Under the terms of the exchange offer, participants will be able to tender options which have significantly higher exercise prices than the current market value in exchange for a lesser number of newly granted options. The exercise price of the new options will be the closing price of ZipRealty’s common stock on The NASDAQ Stock Market on the exchange date, which is expected to be the day the tender offer expires (July 24, 2009). The stock options eligible for tender are those with an exercise price at or above $4.59 per share, the 52 week closing high at the time the Board of Directors approved the program. As of June 23, 2009, there were 3,584,710 stock options eligible for tender.

As a result of the tender offer, the company will recognize the incremental non-cash compensation cost of the new stock options granted in the exchange offer. The incremental compensation cost will be measured as the excess, if any, of the fair value of the new options granted in the exchange over the fair value of the eligible options surrendered in exchange for the new options. The incremental cost will be recognized as compensation expense ratably over the three year vesting period of the new options in addition to the remaining unamortized compensation expense associated with the eligible options surrendered in the exchange. The amount of the incremental cost will depend on a number of factors which will not be known until the expiration date of the tender offer, and, therefore, the Company cannot predict the exact amount of the incremental compensation cost that will result from the exchange offer. However, the Company expects the incremental compensation cost will be between approximately $550,000 and $900,000.

The exchange offer is not contingent on any minimum number of options being tendered. The exchange offer is, however, subject to a number of other terms and conditions as set forth in the offering documents. Neither the Company’s management nor its Board of Directors makes any recommendation in connection with the exchange offer.

This press release is for informational purposes only, and does not constitute an offer to exchange or the solicitation of an offer to exchange any stock options. The full details of the tender offer, including instructions on how to tender options, along with the related materials, are expected to be delivered promptly to each holder of eligible options. Each holder of eligible options should carefully read the exchange offer materials, as they contain important information, including various terms and conditions of the tender offer. A tender offer statement on Schedule TO has been filed with the Securities and Exchange Commission (the “SEC”) and is available along with other filed documents for free on the website of the SEC at www.sec.gov. Copies of the tender offer statement may also be obtained on the Company’s website, www.ziprealty.com. Eligible holders of eligible options are urged to carefully read the tender offer statement prior to making any decision with respect to the exchange offer.

ZipRealty Announces First Quarter 2009 Results

ZipRealty announced financial results for its first quarter ended March 31, 2009. For the first quarter, net revenues were $21.7 million, a 5.3% increase from the $20.6 million reported in the first quarter last year. The Company’s net loss for the period was $7.5 million, or $0.38 per share, compared to a net loss of $7.3 million, or $0.31 per share, in the year-ago period. The pro forma loss per share, excluding the effect of stock-based compensation and one-time items, was $0.33 for the first quarter of 2009, compared to a $0.24 pro forma loss per share for the same period a year ago.

Pat Lashinsky, President and CEO of ZipRealty, commented, “We’ve started 2009 with strong momentum in critical areas, highlighted by outstanding website traffic and lead volume growth, and a 33.6% increase in first quarter transaction volume from a year ago. We’ve also expanded our talented agent force. Economic conditions and the housing market correction continue to pressure average home sales prices, and our first quarter revenue growth and margins were impacted by a 20.6% decline in average net revenue per transaction from the first quarter of last year. However, we are encouraged by the share gains we have achieved in many of our markets and believe we are seeing preliminary signs that the downturn in some markets is finally running its course. While we continue to expect that 2009 will present a challenging operating environment for the residential real estate industry, we are investing in technology and our agent force to further build ZipRealty’s unique position in the marketplace and to fuel the Company’s long term growth.”

ZipRealty announced the following operating metrics for the first quarter of 2009:

• The total value of real estate transactions closed increased to approximately $909 million in the first quarter of 2009 versus $884 million in the same period in 2008.
• The total number of transactions closed was 4,171, compared to 3,121 in the first quarter last year.
• Average net transaction revenue per close decreased approximately 20.6% to $5,119 from $6,447 in the first quarter of 2008.
• At March 31, 2009, ZipRealty employed 2,989 ZipAgents, up from 2,285 agents at the end of the first quarter of 2008 and 2,816 agents at December 31, 2008.

ZipRealty Becomes First Non-Traditional Brokerage in the Top 10 of REAL Trends 500

In a first for non-traditional residential real estate brokerages, the online-based firm ZipRealty (www.ziprealty.com) broke into the top 10 ranking of the 2009 REAL Trends 500, based on 2008 sales.  ZipRealty climbed six spots from last year to claim ninth place in total transaction sides, which measures the performance of the nation’s leading real estate firms.   In addition, ZipRealty’s growing sales volume boosted the company to tenth in sales volume, up from 19 last year.

“To break into the top-10 in both transaction sides and total sales volume, and serve as the most trafficked real estate brokerage Web site, is a testament to the growth of ZipRealty and the acceptance that a new model can thrive,” said Patrick Lashinsky, president and CEO of ZipRealty. “In 2008 we expanded ZipRealty’s footprint into several new markets nationally, hired new agents, and, despite difficult market conditions, enjoyed our 10th consecutive year of revenue growth and maintained the highest client satisfaction rating in the industry.“

The 2009 REAL Trends 500 rankings, published late last week, feature two lists: one based on a brokerage company’s closed transaction sides for 2008, and the second on dollar value of properties sold during 2008.

ZipRealty was founded in 1999 on the belief that buying or selling a home could be faster, easier and more efficient. The nation’s largest online-based full service real estate brokerage, ZipRealty services both buyers and sellers in 35 markets in 21 states with more than 2,800 agents.

About the Report

The 2009 REAL Trends 500 is an annual research report which identifies the country’s largest and most successful residential firms as ranked by closed transaction sides and separately by closed sales volume. This report represents the most trusted standard of measuring the performance of the nation’s leading realty service firm.  To see a complete list of 2009 REAL Trends 500 rankings, visit http://www.realtrends.com/go/page.php?menu_id=73

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ZipRealty Announces Fourth Quarter and Full-Year 2008 Results

Closed transactions were 4,335 in the fourth quarter, an increase of 42.8% from the year-earlier period ZipRealty, Inc. announced today financial results for its fourth quarter and full-year ended December 31, 2008. For the fourth quarter, net revenues were $25.1 million, an 18.3% increase from the $21.2 million reported in the fourth quarter last year. The Company’s net loss for the period was $2.7 million, or $0.14 per share, compared to a net loss of $5.9 million, or $0.26 per share, in the year-ago period. The pro forma loss per share, excluding the effect of stock-based compensation and one-time items, was $0.18 for the fourth quarter of 2008 versus $0.22 loss per share for the same period a year ago.

Pat Lashinsky, President and CEO of ZipRealty, commented, “We were very pleased that, despite historic economic challenges in 2008, ZipRealty marked its tenth consecutive year of revenue growth. We credit our ongoing investments in technology and people, which have driven high customer satisfaction levels, market share gains and agent efficiency.” Lashinsky continued, “In the near term, we continue to be cautious about the overall residential real estate market, as various regions of the country are in different stages of rationalizing price and inventory. However, we remain excited about our market position and strategic momentum and believe we have significant opportunity to innovate and grow over the long term.”

Lashinsky concluded, “Throughout the current downturn, ZipRealty has maintained a strong liquidity position and an unwavering commitment to outstanding customer service. We believe that our focus on the real estate consumer and providing a great customer experience, supercharged by prudent investments in our technology, will position ZipRealty to prosper and profit from an eventual industry recovery.”

In 2008, net revenues increased for the tenth consecutive year to $107.5 million, a 3.5% increase from the $103.9 million reported in 2007. The Company’s net loss for the year was $13.3 million, or $0.64 per share, compared to a net loss of $14.9 million, or $0.66 per share, in the prior year. The pro forma loss per share was $0.52 for the year versus a $0.34 loss per share last year. The cash used in operating activities was $11.6 million in 2008 compared to $5.7 million in 2007.

The Company announced the following operating metrics for the fourth quarter of 2008:

• The total value of real estate transactions closed increased to approximately $1.07 billion in the fourth quarter of 2008 versus $921 million in the same period in 2007.
• The total number of transactions closed was 4,335, compared to 3,035 in the fourth quarter last year.
• Average net transaction revenue per close decreased approximately 16.5% to $5,690 from $6,818 in the fourth quarter of 2007.
• At December 31, 2008, there were 2,816 ZipAgents employed, up from 2,180 agents at the end of the fourth quarter of 2007.

The following operating metrics pertain to the full-year 2008 results:

• The total value of real estate transactions closed increased to $4.64 billion from $4.62 billion in 2007.
• The total number of transactions closed increased approximately 22.9% to 17,156 from 13,962 in the prior year.
• Average net transaction revenue per close for the year was $6,145, compared to $7,241 in 2007.

Balance Sheet & Liquidity

As of December 31, 2008, the Company had approximately $49.4 million of cash, cash equivalents and short-term investments, with no long-term debt.

Outlook

In 2009, the Company plans to limit expansion to 1 to 2 new markets, including the previously announced entry into the Portland market in early 2009, as it focuses resources on optimizing the return on investment in all of its markets. Based on this plan and management’s current information, the Company anticipates the following:

• Revenues for the full-year 2009 are expected to grow in the mid-single to low double digits over 2008 levels.
• The Company expects the 2009 full-year GAAP net loss to be narrower than the 2008 net loss of $14.7 million excluding legal settlement.

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