Zillow Exits the Home Buying Business!Nov 05, 2021
Regarding the huge Zillow news...
In an ironic twist of fate, Zillow announced it would be exiting the house flipping business after "an inability to accurately predict housing prices," according to a CNBC report.
After this company's announcement, Zillow shares sunk 25% this week
"When the labor market tightened, and supply chain bottlenecks sent costs for supplies soaring, Zillow's already thin margins melted away," the article reads. "Add to that a housing market that flattened out or stopped increasing at the rate Zillow expected, and the company found itself drowning in a pool of underwater assets."
This may not just mean less competition out there for our PINK affiliates. It also may be a housing market indicator. You can read the full article here.
- Zillow shares have lost two-thirds of their value since February as the company's new home-buying business turned into a money-losing albatross.
- Zillow said in its third-quarter earnings report on Tuesday that it was exiting the Offers business after the company reported a pre-tax loss of almost half a million in its homes segment.
- CEO Rich Barton told analysts that Offers was ultimately "too risky, too volatile to our earnings and operations," and had "too low of a return on equity opportunity."
What does this mean for you as a PINK Affiliate or a Real Estate Investor as a whole? Let's first talk about what it means to us here at Little Pink Houses of America™.
It's a clear sign that the market is shifting away from the unbalanced seller's market that it has been for the last 18+ months. Not long after the pandemic shocked the world, the real estate market went into an uproar.
Housing was in such high demand that people were making insane above list price offers and buying homes sight-unseen. Now we are seeing these trends slowing and, in some cases stopping altogether. Zillow is one of the biggest brand names in Real Estate, and even they miscalculated the market.
We are not saying the market is going to crash or even show a massive correction. We feel the market will come back to reality and create opportunities for investors like you to make sensible offers again.
Today is a fantastic time to be in the Real Estate business. This dip in market activity is showing itself as an excellent time for the "would-be" investor to get off the sidelines and get in the game.
The best time to plant a tree was 15 years ago; the next best time is today!
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