4 Broken Home Dot-Coms

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If you think that residential real estate developers have it rough these days, imagine what it's like to run websites dedicated to finding new digs for a disappearing pool of potential homeowners.

Realtor.com parent Move (Nasdaq: MOVE) and Web-savvy broker ZipRealty (Nasdaq: ZIPR) posted lackluster quarterly results last night. The news follows equally uninspiring results from HouseValues (Nasdaq: SOLD) and Tree.com (Nasdaq: TREE) last week.

How bad was it?

• ZipRealty's report wasn't horrendous. Revenue grew by 12%, but that was the result of an even larger spurt in the number of ZipAgents. The average agent is closing fewer sales, at lower price points. Zip's net loss did narrow, but it's still running a deficit.
• Move did move ... slightly downward, with revenue taking a small dip as losses widened. The silver lining: Its flagship Realtor.com site saw a 17% year-over-year uptick in minutes spent on the site in September. Still, the company suffers somewhat in comparison; at least commercial real estate marketplace LoopNet (Nasdaq: LOOP) can grow revenue when its traffic improves.
• In its first quarter as a stand-alone public company, Tree.com posted a 33% plunge in revenue and red ink on the bottom line. The parent of LendingTree and RealEstate.com posted operating losses in both its lending and real estate divisions.
• HouseValues also suffered a 33% top-line drop over last year's third quarter. Thankfully, HouseValues posted a narrower operating loss and has actually generated positive operating cash flow this year.

If it's any consolation, these companies have something going for them that underwater homeowners do not: a healthy reserve of cash. ZipRealty and HouseValues in particular are star pupils on that front, with sparkling balance sheets entirely free of long-term debt.

Company	Price	Cash Per Share	Cash/Market Cap
ZipRealty	$2.60	$2.60	100%
HouseValues	$2.38	$2.55	94%

*Prices as of Nov. 5, 2008 close.

With $51.9 million in cash and just 20 million shares outstanding, ZipRealty is essentially trading hands for free. HouseValues offers head-turning value, too, now that it's no longer burning through its greenbacks.

The sector may still take its time marching back into favor. Investors looking for a little more growth in housing-related plays might be better off with thriving companies like mortgage-rate publisher Bankrate (Nasdaq: RATE), or foreign plays like China's E-House (NYSE: EJ).

They sure beat the "fixer upper" pure plays that have stepped up to the earnings stage over the past few days. However, with attractive balance sheets and pocket-change share prices, now may be a good time as any to start knocking on a few of these companies' doors. The payoff may take some time, but at least things appear to be bottoming out.