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

According to Bloomberg, Zillow wants to sell off $2.8 billion worth houses to investors. It bought them with the intention of renting them out to landlords and homeowners. Another Bloomberg report states that Zillow had to stop buying homes after it discovered it had too many inventory. The company informed investors it was planning on increasing its flipping business.
Some people might be surprised to learn that Zillow actually buys and sells homes. It is not just a platform for agents to list listings. However, the Zillow Offers program has been in place for many years. Zillow claims it will buy your house for cash. This streamlines the entire process. The company will then handle any repairs and quick renovations, before selling the house. This business model is not unique to Redfin. There are also companies that specialize in internet-based home-buying like OpenDoor.

Zillow was involved in a race to buy houses all summer

Vice published an August article detailing what it called an arms race between tech companies trying to purchase as much real property as possible, as prices rose across the country. The report claims that Zillow made a big bet, telling investors it would buy thousands of homes in 2021, and make its Homes division a billion-dollar company.

The scorching summer ended, but Zillows Offers business seemed to be cooling down. In October, the company informed investors that it would no longer buy houses. Citing construction, renovation and labor shortages, the company said it would not purchase any more. Bloomberg speculated that Zillow could be motivated by surplus inventory. Bloomberg reported that Zillow sold a lot of houses at a loss, rather than a profit.

The housing market has had a wild ride and it's probably not Zillows fault.

According to Bloomberg, Zillow wants to sell around 7,000 homes it purchased. It doesn't look like house hunters will benefit from Zillows problems. Bloomberg reports that Zillow is looking to sell the homes to institutional investors, or Wall Street-like companies, for $2.8 billion. It may seem like a rude awakening to potential homebuyers who were turned down by an seemingly inexhaustible supply of cash buyers. It doesn't appear that the housing market is completely dependent on investment bankers.

Vox reports that investors made up only 20% of the home-buying marketplace in 2020. Zillow claims that it and its rivals made up 1% of the housing market for Q2 2021. These numbers can be both frightening and encouraging. However, it does not mean that Zillow or private equity firms outbid you for your dream home.

It is difficult to predict what this sale will bring and how it will affect Zillows future home flipping plans. It won't stop conspiracy theories that Zillow is raising prices intentionally. If I am right, it won't make home-hoppers feel better about their chances at finding a place to call home. It could be another example of how finances are now a common argument and that just because you're betting big, it doesn't necessarily mean that youre going to get the results you want.