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Zillow Seriously Miscalculated


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2021 Sep 18, 9:20pm   8,224 views  120 comments

by Malcolm   ➕follow (0)   💰tip   ignore  

Zillow's new business of flipping houses may have created this recent price surge in California. Unfortunately, that means that they have to be the high bidder in bidding wars. It is a very dangerous business model to be such a large player in a self perpetuated price bubble. I am seeing major discounting in San Diego and this example could signal a real problem for Zillow.



Note the current asking price. Note that it is a Zillow owned home.




Note what Zillow paid for it on July 9th.




Now note what they listed it at, the prices changes, and the current asking price.

How many million dollar homes can Zillow afford to buy, to rehab, and then to sell for less than they paid for it in the first place?

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85   joshuatrio   2021 Oct 27, 6:45am  

A report from WTOP. “About 1 million U.S. homeowners with a mortgage are still in some stage of a mortgage payment forbearance program with their lender. The current rate of delinquencies at all stages is 3.5%, and that is historically high. ‘The last time we saw this high of a level was back in 2008 and 2009 during the financial crisis. But what is different this time is that the foreclosure rate is at a historic low because of the forbearance program,’ said Lawrence Yun, chief economist at the National Association of Realtors.”
86   HeadSet   2021 Oct 27, 12:11pm  

joshuatrio says
said Lawrence Yun

Lawrence Yun? When it comes to wrong predictions, that fellow is a hole with no bottom.
87   Ceffer   2021 Oct 27, 12:35pm  

HeadSet says
When it comes to wrong predictions, that fellow is a hole with no bottom.

Now, just what gender would that be?
88   Booger   2021 Oct 27, 2:58pm  

HeadSet says
joshuatrio says
said Lawrence Yun

Lawrence Yun? When it comes to wrong predictions, that fellow is a hole with no bottom.


Paid shill.
89   joshuatrio   2021 Oct 28, 10:24am  

A report from Gizmodo. “Zillow has been hemorrhaging cash in the home-buying arms race in certain markets. Bloomberg wrote: ‘Zillow put a record number of homes on the market in September. It also cut prices on nearly half of its U.S. listings in the third quarter.’ In some markets like Atlanta, Georgia, and Phoenix, Arizona, Zillow losing money on listings is particularly apparent, Bloomberg wrote. Its 250 active listings in Phoenix are about 6% under market price, which University of Colorado Boulder real estate expert Mike DelPrete told Bloomberg was about $29,000 off for the typical home.”

https://www.msn.com/en-us/money/realestate/zillows-flips-are-now-flops/ar-AAQ0OPg
90   Malcolm   2021 Oct 28, 4:39pm  

zzyzzx says
I guess they got tired of losing money on their home purchases.


It's hysterical. Every single one in my area that is listed is now listed for below what Zillow paid for it. ALL OF THEM!!!!
91   Malcolm   2021 Oct 30, 9:15am  

Here is an interesting NY Post story giving a little detail into what we noticed.

https://nypost.com/2021/10/28/zillows-flips-flop-hurting-profits-but-benefitting-homeowners/

After a real estate agent made him a lower offer than Zillow, Richard Flor of the Phoenix suburb Tolleson, Arizona decided to sell to the company this summer. Zillow paid him approximately $412,000 and charged only a 1 percent fee on the sale of his three-bedroom, three-bathroom rental property. Two weeks later, after making light repairs, Zillow listed the property for $387,000 — $3,000 less than what the agent had offered.
92   zzyzzx   2021 Nov 1, 12:08pm  

https://finance.yahoo.com/m/94fb431f-7378-387c-a3bf-b4b668eb223d/zillow-stock-dives-after.html

Zillow stock dives after analyst highlights two-thirds of homes bought are underwater
93   Blue   2021 Nov 1, 1:20pm  

zzyzzx says
https://finance.yahoo.com/m/94fb431f-7378-387c-a3bf-b4b668eb223d/zillow-stock-dives-after.html

Zillow stock dives after analyst highlights two-thirds of homes bought are underwater

That's a good news for now. But give inflation and money creation its just a pause.
94   EBGuy   2021 Nov 1, 2:23pm  

Here's one of their competitors in the iBuyer space:
Instant homebuyer Offerpad quietly became a publicly traded business Thursday, after it merged with a blank check company led by former Zillow CEO Spencer Rascoff one day earlier.
...
Rascoff departed from Zillow in early 2019, due in part to criticisms he didn’t bring the home listings giant into iBuying at a rapid enough pace. A spokesperson for Rascoff reached out to say that he did not step down as CEO due to disagreements over Zillow’s iBuying program.*
..
Offerpad turned a $9.2 million profit in second quarter, a rare feat in iBuying in which the cost to purchase homes plus operating expenses traditionally exceed revenues from reselling the home. But Bair acknowledged last month that Offerpad would likely lose money the next two quarters thanks to increased marketing costs and ramping up its engineer and product teams.

Veering into Change Bank model of profitability. Could be a boon for home buyers, though. Investor capital used to fix up homes that are sold at a loss.
96   EBGuy   2021 Nov 2, 6:33pm  

Way to call this one early Malcolm...
The company plans to take writedowns of as much as $569 million and reduce its workforce by 25% as it winds down the business in coming months, according to a statement Tuesday. Zillow shares plunged as much as 11% to $76.22 in late trading.
The decision to abandon home flipping comes as the company’s third-quarter results showed it lost more than $380 million in the operation, called Zillow Offers. The business hit a major snag in recent months as Zillow tweaked its algorithms to make more aggressive offers, causing it to overpay for houses just as the heated U.S. market began to cool slightly.
97   RWSGFY   2021 Nov 2, 7:28pm  

Fucking morons snorted their own product.
98   EBGuy   2021 Nov 2, 8:19pm  

Here's the Big Four Three iBuyers.
The iBuying industry is still relatively small, but it's starting to gain serious traction. A recent report by Zillow analyzed the "big four" iBuyers: Zillow, Offerpad, Opendoor, and Redfin (NASDAQ: RDFN). It found that the four companies purchased a total of more than 15,000 homes in the second quarter of 2021 and that iBuying accounted for 1% of the U.S. housing market for the first time ever.
99   zzyzzx   2021 Nov 3, 9:29am  

https://finance.yahoo.com/m/cde86b19-937a-3952-babe-2fae3c07f344/zillow-is-offloading-7-000.html

Zillow is offloading 7,000 homes — raising ‘red flags’ about the real-estate market
100   Malcolm   2021 Nov 3, 3:35pm  

My all-time favorite real estate quote: “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,” said CEO Rich Barton in a statement.

https://therealdeal.com/2021/11/02/zillow-calls-it-quits-on-ibuying-will-lay-off-25-of-staff/

So, that begs the question. If Zillow can't forecast home values, isn't that a problem for those who rely on Zillow forecasts?
101   Booger   2021 Nov 3, 3:55pm  

$65.47/sh -21.73 (-24.92%)
At close: 4:00PM EDT
102   Patrick   2021 Nov 3, 3:57pm  

Wow.
103   mell   2021 Nov 3, 11:00pm  

Zillow bought houses in shit areas for shit prices cause their "AI" told them so. This is not a red flag for the real estate market, it just once again proves how much better humans are at activities that require instinct such as house flipping
104   Malcolm   2022 Jul 25, 4:50pm  

Seattle-based Zillow faces another shareholder suit over failed house-flipping business

https://www.seattletimes.com/business/real-estate/seattle-based-zillow-faces-another-shareholder-suit-over-failed-house-flipping-business/

It looks like this is going to keep haunting them for years.
105   Patrick   2022 Jul 25, 5:47pm  

Thanks @Malcolm

I'm happy to hear that Zillow is still going downhill. I did not enjoy working for them, especially not after they figured out that I'm the patrick.net guy.
106   just_passing_through   2022 Jul 25, 7:48pm  

Patrick says

especially not after they figured out that I'm the patrick.net guy.


What was THAT like? haha
107   Patrick   2022 Jul 25, 7:49pm  

Yes, I was ultimately fired, no reason given. But I knew.
108   Patrick   2022 Jul 25, 7:50pm  

just_passing_through says


What was THAT like? haha


It was fun at first, like being a secret agent. But later it was just uncomfortable.
109   Malcolm   2022 Jul 25, 10:11pm  

Patrick says

I'm happy to hear that Zillow is still going downhill. I did not enjoy working for them, especially not after they figured out that I'm the patrick.net guy.

Awkward!!!!!
110   Malcolm   2022 Jul 25, 10:12pm  

Patrick says

Yes, I was ultimately fired, no reason given. But I knew.

When was that?
111   Patrick   2022 Jul 28, 4:42pm  

2017
112   Booger   2022 Jul 28, 4:47pm  

Patrick says

Yes, I was ultimately fired, no reason given. But I knew.


How did they find out?
113   Booger   2022 Jul 28, 4:48pm  

Patrick says

Yes, I was ultimately fired, no reason given. But I knew.


Congratulations! I figure that there is probably something wrong with you if you haven't been fired at least once!
114   Booger   2022 Jul 28, 4:50pm  

Zillow down to 34.69 / sh.
116   RWSGFY   2022 Sep 29, 9:42am  

zzyzzx says




They did shut it down many months ago.
117   stereotomy   2022 Sep 29, 10:03am  

RWSGFY says

zzyzzx says





They did shut it down many months ago.

Did they shut it down, or just turn it clockwise (to tighten, instead of loosing).
118   Eric Holder   2022 Sep 29, 10:58am  

stereotomy says

RWSGFY says


zzyzzx says






They did shut it down many months ago.


Did they shut it down, or just turn it clockwise (to tighten, instead of loosing).


Shut down as in "fired everybody involved in".
119   zzyzzx   2022 Oct 26, 11:28am  

https://techcrunch.com/2022/10/26/zillow-layoff-300-employees/amp/

Zillow lays off 300 employees in latest workforce shift

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