Zillow reportedly needs to sell 7,000 houses after it bought too many

guest · Nov 2, 2021

Zillow reportedly needs to sell 7,000 houses after it bought too many
Did you know the site actually sells houses?
November 1, 2021
https://www.theverge.com/2021/11/1/...ousing-market-inventory-investors-real-estate

Zillow is trying to offload around $2.8 billion worth of houses onto investors after it bought them with the intent of selling them to hopeful homeowners and landlords, according to a report by Bloomberg. This follows another Bloomberg report that the real estate browsing website had to stop buying houses when it found itself with excess inventory after the company told investors it planned on ramping up its flipping business.

Some readers may be surprised that Zillow buys and sells houses, rather than just acting as a place for real estate agents to post listings — I was too when I first heard about it, but the company has actually been doing this for years through its Zillow Offers program.
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In August, a Vice article detailed what it described as an “arms race” among tech companies that were trying to buy up as much real estate as possible as housing prices exploded across the country. According to the report, Zillow bet big, telling investors that it planned to buy thousands of houses throughout 2021 and turn its Homes division into a billion-dollar business.

As the staggeringly hot summer came to an end, though, it seemed like Zillow’s Offers business was also cooling down — in October, the company told investors that it would stop buying houses, citing construction, renovation, and closing labor shortages.
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It’s hard to tell what will come of this sale and how it’ll affect Zillow’s home flipping plans in the future.
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guest · Nov 2, 2021

Zillow is moving out of the home-selling business
The company lost hundreds of millions of dollars flipping houses
November 2, 2021
https://www.theverge.com/2021/11/2/...own-excess-inventory-losses-financial-results

Zillow has announced that it’s winding down the Zillows Offers program, a day after reports surfaced that it’s selling over 7,000 of the houses it purchased with the intent of flipping them to would-be home buyers.
In a press release announcing its Q3 results, the company says that Zillow Offers only served “a small portion” of its customers. CEO Rich Barton now says that

“We’ve determined the unpredictability in forecasting home prices far exceeds what we anticipated and continuing to scale Zillow Offers would result in too much earnings and balance-sheet volatility.”
With the program shutting down, the company says it’s reducing the estimated value of the houses it’s purchased in Q3 or will purchase in Q4 by more than $500 million. Zillow also says that winding down the business in the coming months will mean having to let go of almost 25 percent of its employees — almost 2,000 workers, according to GeekWire.
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