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First corporate home buyer leaves market

4,444 Views | 29 Replies | Last: 4 yr ago by SteveBott
SteveBott
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12:49p, 11/3/21
AG
Zillow calls it quits. I expect more

https://www.businessinsider.com/ibuyer-defunct-why-did-zillow-stop-buying-houses-2021-11
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Red Pear Luke
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2:21p, 11/3/21
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Zillow embracing the Buy High, Sell Low motto.
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HomeFinderCody
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3:59p, 11/3/21
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Even Zillow no longer trusts the Zestimate.
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Bitter Old Man
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4:32p, 11/3/21
AG
Its almost like real estate is not a commodity and actually trades based on unique attributes rather than a blanket commodity price. If that's the case, maybe people might want to seek out the advice of local market experts...

Uh oh...
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SteveBott
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In reply to Bitter Old Man • 4:33p, 11/3/21
AG
Ya think?
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Red Pear Realty
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In reply to HomeFinderCody • 5:19p, 11/3/21
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HomeFinderCody said:
Even Zillow no longer trusts the Zestimate.


Thread over. I'm bookmarking to bring this up the next time someone mentions a Zestimate.

Also, how incompetent do you have to be to lose money in the hottest market of all time? Last quarter Zillow said it lost $8m on $1.4b invested. I wanna know what percent this $500+m loss is on the total investment. Did they lose 30%? More?
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Red Pear Luke
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In reply to Red Pear Realty • 5:27p, 11/3/21
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Red Pear Realty said:
HomeFinderCody said:
Even Zillow no longer trusts the Zestimate.


Thread over. I'm bookmarking to bring this up the next time someone mentions a Zestimate.

Also, how incompetent do you have to be to lose money in the hottest market of all time? Last quarter Zillow said it lost $8m on $1.4b invested. I wanna know what percent this $500+m loss is on the total investment. Did they lose 30%? More?
What about the loss in market cap now that there stock has had 30% 48% shaved off in the last 48 hours.
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Jay@AgsReward.com
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6:54p, 11/3/21
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and better.com loses 86 mm in the second quarter in maybe the greatest quarter in history to be a lender. Amazing. Venture capital is some of the dumbest money in at least this space.

https://www.housingwire.com/articles/better-com-reports-86m-loss-in-q2-as-margin-narrows/#:~:text=An%20amended%20S%2D4%20filed%20by%20Aurora%20Acquisition%20Corp.&text=According%20to%20the%20filing%2C%20Better's,in%20revenue%20of%20%24171.8%20million.
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Diggity
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7:42p, 11/3/21
AG
The old "lose money to buy market share" strategy isn't working? I'm shocked.
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mazag08
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9:34p, 11/3/21
AG
I don't know exactly how long I've been arguing that Zillow is a trash company, but it's likely close to ten years.
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KayJayKay
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9:39p, 11/3/21
They lost 80k per house on average last quarter, how does that even happen? Must take a special skill.
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TxAG#2011
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11:00p, 11/3/21
Friend at a PE firm in this arena told me a few months ago a lot of these buyers like door offerpad etc. were just to show VC money they were doing transactions and making moves not that they were making money.

There may be some more dominoes falling now the alarm is raised
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Diggity
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In reply to TxAG#2011 • 11:19p, 11/3/21
AG
You don't need need to be in PE to know they weren't making money on these deals. It was all disclosed.

It's a ****ty business model and the only way to make the numbers come close to making sense is to eliminate the buyers agent fee.
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SteveBott
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In reply to Diggity • 11:22p, 11/3/21
AG
Yep and that ain't going away any time soon.
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TMoney2007
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11:41p, 11/3/21
AG
But like,... the algorithm , man...
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AggieDruggist89
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8:15a, 11/4/21
AG
Maybe, just maybe.. Real estate market in certain regions have plateaued and Zillow got caught with pants down as RE is correcting.
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Jay@AgsReward.com
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In reply to TxAG#2011 • 8:16a, 11/4/21
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There are a lot of mortgage business that are getting significant funding that are not at all different but have managed to fool the VC's into thinking they are "tech enabled" when they are simply repackaging the same process without solving or changing anything.
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Diggity
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In reply to AggieDruggist89 • 8:50a, 11/4/21
AG
This decision has less to do with market conditions and more to do with a dumb business plan. They were overpaying for houses to buy share and hoping to reduce their disposition costs. Seems they realized that scale doesn't help when you continue to lose money on every deal.

(Don't ask me where that face came from)
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The Fife
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In reply to TMoney2007 • 9:09a, 11/4/21
TMoney2007 said:
But like,... the algorithm , man...
In my area where sales prices are public it seems to be (average of 5 sales)*0.8 = their wild-ass guess. It's worth exactly what you paid Zillow for their analysis.
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AggieDruggist89
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In reply to Diggity • 9:37a, 11/4/21
AG
But their ibuyer program was like the most profitable segment last year... So it really wasn't the business strategy... Was it??????

Why is it so hard for some to believe that real estate market can correct...
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AggieDruggist89
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9:39a, 11/4/21
AG
I'm not angry...
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Diggity
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In reply to AggieDruggist89 • 10:44a, 11/4/21
AG
AggieDruggist89 said:
But their ibuyer program was like the most profitable segment last year... So it really wasn't the business strategy... Was it??????

Why is it so hard for some to believe that real estate market can correct...
by most profitable, you mean it still lost money?
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AggieDruggist89
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In reply to Diggity • 11:09a, 11/4/21
AG
Diggity said:
AggieDruggist89 said:
But their ibuyer program was like the most profitable segment last year... So it really wasn't the business strategy... Was it??????

Why is it so hard for some to believe that real estate market can correct...
by most profitable, you mean it still lost money?


Yes
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SteveBott
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4:21p, 11/4/21
AG
Not starting new thread but looks like Fannie/freddie are trying to setup rent payments on credit reports. Until now they were not accounted for except, I think, some FHA loans

http://www.mortgagenewsdaily.com/11032021_loan_underwriting.asp
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Diggity
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In reply to SteveBott • 4:34p, 11/4/21
AG
solid idea.

I'm sure that will stir up lots of **** with claims of inherent racism of inequity, as background checks have done of late.
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flyingaggie12
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9:33p, 11/9/21
AG
It was a matter of time. I've been expecting it since August of 2020. A month ago I had a client reach out to me asking if they should sell to Zillow. After reviewing their offer it was $40k above the highest and best comp. Told her to sell it to them as fast as possible.

Every house that I saw that was Zillow owned sat in the market for +45 days. Like clockwork every week they would lower the price $2k until it would finally sell. Even if you looked at their listings, the pictures were horrible and nothing was done to repair simple cosmetic damage that set a bad impression when looking at the images. Almost as if they didn't care...
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Year of the Germaphobe
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6:09a, 11/10/21
AG
Zestimates are worth exactly what you pay for them.
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mazag08
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In reply to Year of the Germaphobe • 5:08p, 11/10/21
AG
Dos Tasadores De TAMU said:
Zestimates are worth exactly what you pay for them.
Zillow should pay me for every zestimate I've unfortunately ever had to look at.
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Good Bull Jones 17
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3:59a, 11/14/21
AG
So does anyone think Zillow's exit from the market (in addition to more companies leaving) will help cool it off?

My understanding was that the PE and VC money in the housing market was contributing to the market craziness.
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flyingaggie12
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8:54a, 11/14/21
AG
The data is saying that it is cooling off from what you saw this summer. How much does it cool off from those levels is the tougher question. There's still a big housing shortage and builders haven't been able to keep up.

Also, I don't expect net migration into the state to stop anytime soon.
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SteveBott
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11:32a, 11/14/21
AG
Red Pear has been posting market reports here. Pay close attention to months of inventory. 6 months is a balanced market. We are not even close coming in less then two. The market will not cool until these numbers start to rise

https://texags.com/forums/59/topics/3248256/replies/60726398#60726398
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