“Zillow Offers”…Homes to Investors, Not Homeowners

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You’ve probably heard about Zillow. You know, the website that hosts online marketplaces with information about residential properties, including properties that are for sale and for rent. For many people, Zillow is a place to reference what their own home might be worth, or buy or rent a new home—or be nosy and see what other people paid for their homes.

However, for the past couple of years, Zillow has expanded their business model into the home speculation and flipping game, too. The “Zillow Offers” program offers cash for homes, followed up by Zillow going in and implementing home renovations.

Note that Zillow is not the only tech company doing this right now: As of late, a bit of an arms race has emerged among Zillow’s fellows to buy up as much real estate as possible. For its own part, Zillow told investors it planned to buy thousands of homes this year.

Yet now, two months before 2021 has even ended, the company announced that not only would it no longer be buying homes, but it also needs to offload thousands of the homes it did buy—and not to homeowners and landlords, but to institutional investors. Additionally, the company will be laying off 25% of its workforce, and estimates that it’ll lose over half a billion dollars.

This debacle is the focus of today’s episode of Upzoned: Using a recent article from The Verge as a springboard for discussion, host Abby Kinney and regular co-host Chuck Marohn discuss the possible reasons why Zillow’s fortunes took such a turn, and why the company has had to reverse course on its foray into the home-flipping business.

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