Zillow’s Flips Are Now Flops
28th October 2021
Digital real estate marketplace Zillow has been hemorrhaging cash in the home-buying arms race in certain markets, Bloomberg reported on Tuesday, after the company tweaked its algorithm to jack up the bids it offered on real estate.
One of the more ominous movements in both real estate and tech during the current phase of the covid-19 pandemic has corporate house-buying sprees in response to resurgent demand, using predictive algorithms that try to divine the future of the housing market. The aim is generally to flip the homes for a profit, or in some cases convert them to timeshares or rental units, with unknown long-term effects for the housing market. Throughout the summer and fall, Zillow was urgently pursuing these potential buys via an “iBuying” program called Zillow Offers, which advertise homeowners’ offers in as little as a few days.