Real estate database behemoth, Zillow, ventured into the iBuying field in 2019, purchasing properties based on algorithms and reselling them in-house, rather than simply listing homes for third-party real estate companies.
The Zillow Offers program would offer cash payments for homes based on what the market data stated they were worth and what they could sell for. And they really leaned into it, buying up thousands of homes in hot markets across the country, flipping them, and making a pretty little profit in the process – backed by billions of dollars from investors and motivated by the desire to be the biggest player in the iBuy game. And it was going well until 2021 arrived and they found themselves sitting on thousands of homes it couldn’t find any buyers for, some of which they paid 5-10 percent above the listed price for.
Of the roughly 1,000 Orlando-area homes that Zillow purchased last year, only roughly 330 of them have sold.
Zillow has since announced that it will be ending its Zillow Offers program and that it will be offloading its inventory to institutional investors, and laying off a quarter of its workforce, losing over half a billion dollars in the process.
As a Realtor of 50 years in Orlando, I have laughed for a while over the many overpriced Zillow valuations in areas of Orlando.