Zillow plunges 24% to lowest since July 2020, after company exits home-buying business

Once a pandemic winner due to its central position in the red hot housing market, Zillow has lost-two thirds of its value since February and is trading at its lowest in 16 months. While its core internet marketplace continues grow and produce cash, Zillowa third-quarter net loss of over $328 million on Thursday, all tied to its instant buying, or iBuying, unit.

In particular, the pandemic threw Zillow's predictive abilities into disarray. The housing market dried up for a brief time early last year, and then skyrocketed as the closing of offices and slowdown in business activity in cities led people to move to locations they deemed more desirable. Prices ran up, setting records in many markets around the country.

"What it boils down to is our inability to have confidence in pricing in the future, enough confidence to put our own capital at risk," he said on the call.In a report with the headline, "Can't justify buy w/o iBuyer," BTIG cut its rating to neutral. Piper Sandler made the same cut to its recommendation in its report "ZOffers Mothballed," as the company heads back "to its roots as an asset-lite model.

Zillow took a $304 million write-down in the third quarter due to "unintentionally purchasing homes at higher prices than our current estimates of future selling prices," the company said in the earnings statement. Zillow said it bought 9,680 homes in the quarter and sold only 3,032.

Amazing that they can lose money in one of the best housing markets in history.

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Zillow is offloading 7,000 homes — raising 'red flags' about the real-estate marketZillow’s unexpected announcement in October that it was temporarily pausing its home-buying activities raised many analysts’ eyebrows. Now, the company is reportedly offloading thousands of homes at a discount. Zillow is selling homes at a discount to institutional investors so that the homes become rental properties. How awesome would it be if Z were selling homes to first time home buyers currently locked out of the market because companies like Zillow were overpaying for inventory?
Fonte: MarketWatch - 🏆 3. / 97 Consulte Mais informação »

Zillow shuts down homebuying business, laying off 25% of workforceInsider tells the global tech, finance, markets, media, healthcare, and strategy stories you want to know. This is bullish Zillow正在关闭其购房业务，并解雇25%的员工 Ok
Fonte: BusinessInsider - 🏆 729. / 51 Consulte Mais informação »