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Why is Zillow Stopping Their Home Buying Campaign?

Posted by Sami Thalji | Oct 19, 2021 | 0 Comments

Zillow has decided to stop buying homes signaling that the housing market is slowing down. As we've discussed previously, Zillow has been buying and selling thousands upon thousands of homes over the last few years using algorithms to predict housing prices. Zillow is blaming the decision to stop buying more houses on labor shortages. Zillow buys houses, rents some, rehabs some and sells them. They are having a hard time rehabbing houses in a timely manner since they cannot find workers to rehab the houses. It seems like Zillow is trying to hide the fact that they probably bought way too many houses and now the market is starting to slide just a lit bit which could be foreshadowing of more price declines to come.

Meanwhile, their main competition, Opendoor and Offerpad announced they will continue to buy and rehab houses at record pace. It is hard to understand how these companies can make money if the market slows. After all they are buying these homes at high prices and if they sell them in a down market there is no profit in that. Offerpad announced that they are continuing to buy houses and that their continued expansion is fueled by their “operational excellence.” Sounds like a load of crap to me. I have already written a few posts regarding the more nefarious plan to turn Americans into a renter society and for these large real estate/tech firms to buy and hold the most important homes while also cutting the lending industry out of real estate markets. The entire thing has the feel of the stock market, where home prices may not matter as much as stock prices and normal rules of buying and selling don't apply to individual investors that don't have algorithms dictating buy or sell decisions. None of this can be good for the housing market and I think there is a good chance we will see prices drop, inventories grow and these real estate/tech firms will use it as an opportunity to dominate the market place. This is not good for consumers, not good for the economy and the if something isn't done to stop this then the fallout will hurt the people that can least afford it.  

About the Author

Sami Thalji

Sami Thalji is a native Floridian, born in Clearwater and raised in St. Petersburg, Florida. Sami graduated from Osceola High School in Seminole, Florida before attending and receiving both his Bachelor of Science and Juris Doctor from the University of Florida in Ga...

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