Zillow is pulling out of the housing market claiming over $550 million in losses in the 2nd half of 2020 alone. Zillow is now in the process of laying off 25% of its employees. Zillow blames its faulty algorithmic model, considering that 2/3 of the homes purchased are now underwater, it seems somebody messed up big time. While other iBuyer such as Opendoor and OfferPad claim to remain in the market and are looking to buy even more homes, I have my doubts their buying sprees much longer. We have seen numerous examples in our law practice of incompetence on behalf of both companies, including instances where they have contracted to spend more than $250,000 in repairs on homes that are worth less than $250,000 at full fair market value. This type of investment buying scheme has ruined much of the economy for most consumers. These companies raise billions of dollars for such schemes and believe they can dictate market conditions. Best case scenario for these companies is that the sheer amount of money they raise will insulate them from normal market conditions and allows them to profit through sheer recklessness. But, the more likely scenario is that they ruin markets for everyday consumers and investors by effectively altering market conditions through smoke and mirrors. In this example, iBuyers and their money have created that belief that there is a historic housing shortage in America which is putting upward pressure on prices. However, the reality is that there is no shortage when you consider the creation of actual family households. The growth in actual households is decreasing with larger numbers sharing homes across generations. Thus, the iBuying scheme creates the illusion of strong demand, which puts significant upward pressure on prices, which prices out everyday consumers. But there really isn't the strong demand out there amongst consumers and once the iBuyers fall out of the market and the interest rates go back to 4% we may see a significant correction where everyday homeowners lose significant amounts of equity in their homes or find themselves upside down again. At this point, we will see the really money jump in and buy up more houses on the cheap. The real estate market is the wild west and high noon is almost here.