Skip to main content

Zillow Stock Falls After It Halts Buying Houses To Flip

Oct 19, 2021
Zillow Logo

Zillow’s stock fell nearly 10% Monday after the company announced its Zillow Offers division would stop buying homes.

KEY TAKEAWAYS
  • Company cites labor & supply shortages for pause in buying homes to flip.

While Zillow is best known for its listings of homes for sale and for offering potential buyers an idea of what their home is worth on the market, its Zillow Offers unit has bought and sold houses in dozens of markets nationwise over the past three years.

In the second quarter of this year alone, the company bought 3,800 homes.

Monday, however, the company announced it will not sign any new contracts to buy homes through the end of the year, citing a backlog in renovations and “operational capacity constraints.” 

Zillow said it will focus solely on closing sales of houses with contracts that are already signed, which will help reduce the backlog in renovations. It said it will continue to market and sell those homes while pausing purchases.

Zillow Chief Operating Officer Jeremy Wacksman said labor and supply shortages were behind the decision.

"We're operating within a labor- and supply-constrained economy inside a competitive real estate market, especially in the construction, renovation and closing spaces," he said. "We have not been exempt from these market and capacity issues and we now have an operational backlog for renovations and closings. Pausing new contracts will enable us to focus on sellers already under contract with us and our current home inventory."

For homeowners still looking to sell, Zillow Offers will connect them with a local real estate agent, the company said.

Zillow Offers is a mostly automated online service for homeowners looking to sell without having to coordinate repairs or host open houses or showings. After buying a home, Zillow prepares it for sale by doing the repairs or upgrades, then lists it on the open market.

Following Monday's announcement, Zillow’s stock fell 9.4%; it has slipped more than 30% this year.

 

About the author
David Krechevsky was an editor at NMP.
Published
Oct 19, 2021
CMG Acquires Norcom Mortgage's Retail Side

The 25-branch addition will enhance CMG’s northeastern presence from Maryland to Maine.

Apr 12, 2024
CFPB Weighs Title Insurance Changes

The agency considers a proposal that would prevent home lenders from passing on title insurance costs to home buyers.

NEXA Begins Search For New CFO

NEXA CEO retires the president position after Mat Grella's termination.

Apr 01, 2024
Recessions: Know What’s What

Volatile components present few indications about subsequent growth

Mar 28, 2024
Co-Founder Mat Grella Terminated From NEXA

NEXA CEO Kortas states negotiations regarding the buyout will continue.

Mar 27, 2024
Comings And Goings At AmeriHome

Chief Operating Officer John Hedlund announced his retirement on Thursday in a LinkedIn post.

Mar 22, 2024