Zillow To Expand Controversial Home-Buying Business To 20 Markets Including Los Angeles, Austin And Miami

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In its first quarter earnings report out Thursday, Zillow Group showed stronger than anticipated growth in the home-buying business it launched last year.

Share to twitterFounder Rich Barton returned as Zillow CEO in February to lead its transition from selling ads to real estate agents to flipping homes.out Thursday, Zillow Group showed stronger-than-anticipated growth in the home-buying business it launched last year. The program, known as Zillow Offers, has been met with skepticism by Wall Street and housing economists, but the Seattle-based company clearly sees the model as its path forward.

By comparison, from April 2018—when the home-buying program launched—through December 2018, Zillow purchased 686 homes and sold just 177, generating $52 million in revenue and losing $27.2 million. Overall revenue for the quarter was $454 million, up 51% from a year ago, but the net loss also expanded to $67.5 million from $18.6 million. In three to five years, Zillow anticipates turning the revenue mix upside down, bringing in around $20 billion a year from its homes segment and around $2 billion from its media business.

Most people know Zillow—and subsidiaries including Trulia, Streeteasy and Naked Apartments—as a place to browse for homes and find out how much their friends' houses are worth. Last April, the Seattle-based company entered the on-demand home sales market with Zillow Offers. Homeowners in nine markets can now solicit purchase offers from Zillow. The company buys the home, makes necessary renovations, and lists it for sale on the open market. Zillow's goal is to turn each home in 90 days.

 

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Their stock has been hammered but their service is great and I have to believe such high investments in machine learning will pay off for them. Real Estate is behind on the times.

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