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Good News: Zillow Stopped Buying Homes (Here’s Why...)

        

Zillow announced recently that they've stopped buying homes!

In their press release, they said they had supply chain issues and labor shortages, which is interesting because when you look at what they actually did in Q2 and Q3, where we've had kind of the same issues going on, they actually doubled the amount of homes that they purchased during that time compared to last year.

So why would they go from twice the amount they were buying last year to stopping on October 18th?

Some people are saying that one reason might be they're seeing market changes, just like we've been talking about. They're seeing a lot more listings coming to market which creates pricing pressure and competition. So they may not be able to come in and pay these high prices and then resell it at an even higher price. Because Zillow runs a flipping operation, right?

So we're actually seeing that. I've got a lot of students and a lot of parts of the country that send me reports and they show me that Zillow paid this, but they're actually listing their prices for less than what they paid for it.

So it's interesting news. It'll be interesting to see if they restart buying homes in early 2022.

But I have no doubt that they're watching the market conditions. And if you take and multiply a loss on a home times thousands of purchases that happened recently, you probably can see that they don't want to compound those losses by continuing to buy into a changing market.

What's the lesson for us?

The lesson for us isn't that the market's crashing. This is basically a flipping operation. The market for flippers is going to be more challenging because prices are starting to moderate. But with the lesson for us is with our current sellers coming to market, we need to make sure we're priced right and are super competitive.

We're not basing pricing on what was happening in April and May. We're basing pricing on current pendings, current active listings, and we're really monitoring the market.

The other piece of good news here is that buyers are going to be able to have some more buying power. As more listings come to market, there's not going to be as many multiple offer situations. They'll still be some, but it will be a little bit easier for buyers to find that dream home they've been looking for.

So there's good news on the horizon for the market.

Take this out, talk about it with your buyer, sellers, and sphere of influence. And let them know that now is a great time to buy.

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