Zillow Group is selling approximately 2,000 homes across 20 markets to New York City-based investment firm, Pretium Partners. This move is part of Zillow’s decision to end its home-buying business, Zillow Offers.
The homes will be turned into rental units by Pretium Partners and were sold at market price. Zillow plans to sell 9,800 homes it owns and another 8,200 properties it was buying but will lose 5-to-7% on the sales.
End of Zillow Offers:
Last week, Zillow announced the end of Zillow Offers, which was launched more than three years ago. The decision was made due to Zillow’s inability to accurately forecast home prices and will result in the layoffs of about 2,000 people or 25% of the company. The company will take a write-down of more than $500 million related to the shutdown of Zillow Offers.
I buying is a platform that allows consumers to sell their homes at a lower price, but with the advantage of avoiding the hassle, time commitment, and uncertainty of a traditional sale. iBuyers then “flip” homes and quickly put them back on the market to make a profit. Other companies in the iBuying business include Offerpad, Opendoor, and Redfin.
Zillow’s Future Plans:
Zillow was relying on Zillow Offers for its future growth, beyond its core business of providing home price estimates and leads to agents. The company had initially projected an annual revenue of $20 billion by 2024 from the home-flipping program.
The end of Zillow Offers marks a significant shift for the company. But Zillow will continue its operations as a home price estimate platform and lead generator for agents.