When searching the internet for homes there is one name that is synonymous with real estate, Zillow. Zillow is a website that displays real estate data and homes for sale, they also allow Realtors to advertise, originate home loans, and even buy homes to sell. Due to the success of the real estate conglomerate, Zillow, many were intrigued by their announcement last month. Zillow announced they would halt additional purchases of homes for the remainder of 2021. As November rolled around, more shocking news emerged from the company; not only would they stop buying homes for the remainder of the year, Zillow would stop indefinitely. In addition to the conclusion of home purchasing, Zillow plans to fire-sell their current inventory and proceed with layoffs. Zillow’s failure to enter the I Buyer landscape may seems as a minor occurrence, but such a disaster in a strong market is revealing.
Zillows’ demise proves the market is not as stable as many believe. For years Zillow has supported sellers wanting to handle the transaction on their own by providing a space where they could market their property as well as obtain valuable information. Most homeowners do not understand markets and comparable properties as well as real estate professionals, so Zillow made it simple. The Zestimate used an algorithm to determine a home’s value. In densely populated areas where sales were common, the Zestimate was accurate, but when the Zestimate was applied to a home in a rural area it was oftentimes inaccurate. Inaccurate numbers from a zestimate has caused many to overprice their homes over the years. Misconceptions of value are never good but it wasn’t the most damaging thing Zillow ever did to the real estate market.
Recent years have seen the introduction of “I Buyers” into the market, and just as everything can be done with the click of a button these days, so could selling your home. Zillow soon jumped on the bandwagon and began buying homes to resale, even if it cost them money. In doing this in an ever appreciating market, they could pay retail prices as long as appreciation held. Not only did Zillow and other I buyer’s quick grab of homes in the market dwindle inventory, it made prices spike. The appreciation Zillow was banking on was a direct result of their own actions. The real estate market is the same as every other and can never stay on an upward trajectory, there will be corrections. Speculators claimed Zillow’s halt in property purchases signaled a correction in the market, yet the actions that followed the announcement solidified this belief.
Zillow is now selling much of their properties at a loss. Soon the barren real estate market will be full of properties Zillow plans to offload from their large portfolio. Offloading a large magnitude of properties will surely decrease value as it did after the mortgage meltdown of the late 2000s. Zillow’s exodus from the market leaves many sellers wanting to sell their home stress free in a difficult situation, unless they live in North Carolina. Helpful Homes is a real estate Acquisitions company that operates out of the triad, they buy homes in Greensboro, Winston Salem, Raleigh, Charlotte, and surrounding areas. Unlike real estate conglomerates, Helpful Homes is a small enough company to care about the people they help, while remaining large enough to get the job done. As the market begins to shift and rising inventory turns selling a home into a larger process, Helpful Homes is able to assist.