There are some signs that could be viewed as a early warning.

Zillow is dumping their inventory,

Bloomberg reported Monday that Zillow is looking to sell about 7,000 homes, and is seeking roughly $2.8 billion for the houses.

This is the homes they have purchased to re-hab and re-sell.

They are also laying off 2000 employees.

Some articles claim they are wholesaling them off in bulk lots.

Zillows saying they just couldn't turn a profit with their house flipping business so they are stepping down.

The way I see it with over 5,000 employees they should have a damn good idea of how things are going.

They also should have been able to stay in the green flippin houses if the rest of us could.

It's just not what they are saying, I wouldn't be saying the sky is about to fall either if I had 7,000 houses to unload.

Regardless of what is said or being speculated, they are dumping their entire inventory no matter how you slice it.

Time will tell.

I started unloading every thing I acquired after the 2007 crash 18 months ago. Maybe a little premature but I did fine and I'm beyond it.

Zillow to shutter home buying busin...oyees as its big real estate bet falters


Red-hot US housing market begins to cool

The house we've been looking at buying for a nice rental was listed in August(for way too much money).

Owners have dropped the price about 20%.

It's now getting close to what I'd pay.

It'll be interesting to see what happens when the FED starts raising rates.

I’m looking for a commercial property in the wet part of Washington, and while real estate prices are high, the market isn’t “hot”. It’s higher than he# in the metro area, but things really aren’t moving all that fast. Outside the metro an hour or so, properties are sitting for extended periods of time, we’re looking at one that’s been on the market for 18 months, is priced pretty attractive, but no takers. We’ll make a low ball offer in a couple of weeks, see what they come back with.

Yep. It's happening.

The house across the street literally sold for 200k more than I think it was worth. There was a bidding war higher than list price. Happened several times in my neighborhood. I think a giant crash is coming...

Things are still moving pretty well in NW MT, it's going to take a few years to catch up with the population. I'm tempted to punch out and buy a cheaper place farther south, maybe southern Idaho and retire early if I can afford health insurance.

All spring & summer there would be bidding wars over any house F/S here, & they would sell in just a few days.

Then about the middle of September it was like everything just skidded to a halt.

Considering Zillow didn't give a damn what they paid, and are now selling for what they are worth. Got caught manipulating zestimates. They deserve the stock plummet of 30%. The market is cooling, but it's still way harder for people to get money than 2000-2008. Especially the people who have zero business buying a home. So I guess my stance is, yes the market will go down eventually, it's the nature of any market. There have been what, 6 Recessions, in housing since the 70's. Most people made it through them with the exception of 2008. I doubt it gets that bad just because so many lending laws have changed.

there's going to be a lot of unside down mortgages about this time next year after the fed raises interest rates and the rona chews its way through the working population. but i'm sure the govt will take care of us.

Hope Zillow loses their azz. They thrived on creating "optimistic" estimates of value only to try to cash in on their own predictions.

Upside down or unable to pay. Lot of difference. A lot of people are buying now, going into it knowing that in the short term the market could change and they will owe more than its worth. But if they wait and interest rates go up it can more than offset any saving up front. In 10 years and your house is worth 400k. What does it matter if you pay 325 instead of 300. Look at your finances, do the math yourself. That shouldn't be a job for realtors or lenders. The agent should find the best possible fit and the lender should find the best terms after you know that you can afford it.

Who has two houses, or houses they dont live in?



You dumbshits are just trying to get picked off by AOC aint ya??

Houses around here are dang near 3x’s what I paid for mine in 2014. I also wouldn’t want to live where they are going in at now. Near a weed store and convenient store, and a trucking company’s parking lot. This is about 1.5 miles from me, but still the same neighborhood. A new house just went on the market there for $936K.

Zillow says my house is worth $6,600 less than it was a month ago. Doesn’t matter to me as we have no plans to move. Contemplated selling out and buying more land but I just don’t know if I want the hassle of building again

Prices will drop fast after demand gets hammered.
Closed on two rental properties and one flip house in the last two weeks. No regrets at this point. If inflation keeps up at current pace, it might look like I gave them away next year. Rentals were older and due for interior refit. Putting the money into brand new units we’re building ourselves.
Lots of equity, tax incentives and a place to put the money it was a no brainer.


Zillow was using a computer algorithm to purchase house on a large scale. They weren’t winning enough bids and adjusted the algorithm to pay more, and apparently overpaid on a pile of properties. Stupidity, and they get what they deserve.

Residential construction is still going strong in N.C., as northeasterners continue to pour in here.

Hope to build and maybe moving into new in just over a year.

I hope it keeps climbing.

Definitely slowing down. It was absolutely ridiculous this summer.

Seems a lot of mortgages that went into forbearance during the last year and a half are getting put on the market. If rates get back to reasonable levels, or at least not dicknothing levels, it will pump the brakes as well.

Jeff, zillow's buy model was terrible. That's why they're in the crunch they are. They were trying to use CA style algorithms to make buy decisions from the Ivory Tower. That doesn't work everywhere, IMHO.

Yes, that's what they are saying, good story, probably true.

But I think they'd have their finger on the pulse of the market better than any of us and they are dumping 7,000 houses, so there is that.

You gotta figure they are looking out for themselves.
The money invested in those homes isn't theirs, it's investor money, it's hedgefund money.

If the market takes a big downward swing in the next 6 to 8 months they'll come out looking like heros for dumping the inventory now.
It'll be as if they predicted the fall and saved their investors a ton of cash.

Time will tell..

Like everything else, it is market driven. The North and West Coast are seeing stagnation, many areas of the South continue to see huge demand and bidding wars on home sales.

If you live in a Blue State, the market is soft. If you live in a Red State, then strong demand continues.

My house is a dump LOL, worth more than I paod but not a whole lot.

New neighbors suck so Id like to move.

Aint paying what others asking, still too high.

Wait and pick up a place out of town

When it crashes.

I think they were also trying to run rehabs from the Ivory Tower, which you and I both know is fool's ploy.

Guys, no one will have much buying power soon. These shutdowns , stimulus packs and incentives need to be paid for and the only way that is done by taxation and inflation. Coupled with what appears to be open slather by business leaders across the 1st world to allow all sorts of market manipulation without limit( price gouging, monopolisation, artificial shortages) the average person is going to want to have as much of his life consolidated, simplified and debt free as possible.

In my industry, international logistics the big players now completely control the market and shipping costs between two continents for a 40ft sea container have jumped from $800 to $10,000. over 1000% inflation...

Just got this email from the Dade Real Estate Investor's Association. This guy is a well known investor and real estate mentor in the area.

He has a closer finger on the pulse and supports what I was saying above.


==========


Zillow®, I Hate to Say I Told You so, But I Did…



I have been receiving emails and phone calls about the recent financial disclosures that Zillow® has made public. These investors are thinking that the market is suddenly dying and Zillow’s® financial problems are indicative of the beginning of a market collapse.



I think it was late 2018 or 2019 when investors started contacting me about the next great obstacle to doing wholesale deals. It went like this, “Now Zillow® is buying homes and there will be no deals left!” I mostly brushed it off as an excuse to not be making offers and I still know I was right.



Blackstone had been buying properties for years and had been successful so why not Zillow®?



But the whole encounter did peak my interest and since Zillow® is a public company it was easy to deep dive into what they were doing and how it was working. At that time, they had a very successful business model of supplying data to the public and charging for advertising.



When I did my monthly presentations at DREIA I started to mention how this Mega Giant had diversified into mortgages, rentals and all sorts of additional income sources to offer to people who bought their acquisitions.



As I understood their new business model, they would buy properties either listed or from investors, rehab them and rent or resell them. This model wasn’t new, I first saw it in 2008 – 2009 when national lenders were foreclosing on so many SFH’s that they decided to start rehabbing them and retailing these properties.



If you are curious why the lenders’ business model changed, it was probably because they saw the national statistic that the Fed publishes saying that investors buy homes and resell at an average profit of $49,000+ (in 2008 - 2009).



Of course, these resale figures don’t include the costs to carry the properties, do the rehabs and resell them! The result was the national banks were in and out of the rehab game in about one year and licking their wounds from countless losses on most of the properties. The banks learned their lesson and very, very rarely get involved these days in fixing any of their foreclosures.



Every Quarter when Zillow® reported their earnings, I would deep dive into their SEC Disclosure to see where they were making or losing money. The first thing I noticed was while other iBuyers raised private capital to fund their purchases, Zillow® borrowed their funding.



At the year-end, I believe it was 2019, I showed that each property (SFH) that they rehabbed and sold amounted to a LOSS of $56,000 – that’s for EACH property! The combination of over-paying for properties, poor and expensive rehabs, and the cost to carry the properties is what killed their profit margin. I just heard that they took a $302 million write-off which may have included other issues. In summary, forget about iBuyers and hedge funds being your competition.



I blame the management for getting into the investor mindset and being guided by someone who didn’t understand the investor-rehabber-sales cycle. They were constant buyers but of full value properties that can be listed, relisted quickly or held as long-term rentals.



PS – they have been paying full market value and have been the driving force in the rapid rise in SFH prices. Gee, I wonder what will happen when interest rates rise and their buying slows or stops? I guess that in the coming months I may be publishing another article entitled, “I told you so” once again.



Frankly, your only competition resides between your ears and saying that the institutional buyers are killing the market is an excuse. If you aren’t making offers daily, you are destined to out-think yourself and the market.



DISCLOSURE and DISCLAIMER – this article represents only my opinion and doesn’t reflect anyone else’s whatsoever and it is possible that I could be totally wrong in my assessment of their financial predicaments. I suggest you “fact check” anything in this article by reading the SEC Disclosures available online for Zillow®.



I wish you limitless success in all you do,

Dave Dinkel

I get itchy feet to move but the uncertainty and overall pain of packing up 20 years of schit demotivates me pretty quickly. I'll do something in the next few years. I just don't know what yet, wife and I both agree it won't be here.

3rd and especially 4th qtr earnings may be very disappointing in many sectors[not just RE].

Things will correct at some point, but with the fed's foot on the accelerator it's not going to happen anytime soon. Interest rates drive real estate prices.

Might be hard to sell a dump in a crash.

Still nuts around here. When we moved in 2018 the house sold for $430k (purchased in 2013 for $260k). Just saw it sold again last month for $710k, which was $15k more than the asking price.

Zillow had our house listed, and we never knew it until a neighbor ask about it, and why we were selling. Had to call Zillow and raise he'll to get it off their site! Bunch of fuggn crooks.

Wasn't Zillow buying homes from people and storing them in inventory to sell later? I think they about went belly up doing that.

I think it's unreasonable here. Taking the 50% income for the county, assuming a 20% down payment and 3% interest rate, a buyer could afford $450K or so of house. Basically all you can get for that is something in a gang infested area, or a trailer.

How many homes did BlackRock buy?
At most, investors purchased another 39,000 single homes in the back half of 2020

My neighbor works for a hedge fund. They pride themselves in how many billionaires they create. He said Blackrock is buying more homes than his firm.

I’d wager that most aren’t putting 20% down but as long as the government keeps pumping money into the system while keeping interest rates dirt cheap I’d expect the housing market to stay on fire. The governments between a rock and a hard spot but doesn’t seem to care. It’s going to be interesting to see what happens and when.

Interest rates are adjusted with inflation. The FED won't ignore that much longer.

Jeff, did you read my responses to you about zillow in the other thread?

They (zillow) screwed up.

Inflation screws the people but fixes a lot the feds problems . I think they let it rip.

Ancient Romans struggled with inflation