A recent look at YIMBY vs NIMBY said that a person's attitude about high-density housing was strongly affected by how urban centers were widely viewed when that person was about 18. Boomers were...
Zestimate – Zillow Lost $304,000,000
In 2018 Zillow announced “Zillow Offers” which gave home sellers an opportunity to sell their home directly to Zillow without listing their home for sale on an MLS. With the Covid-19 pandemic leading to restrictions on holding open houses it would seem that 2021 would be a great opportunity for the program. Zillow would use its Zestimate to begin the offer price and use an in-person visit to adjust for the cost of needed repairs.
Zillow’s Nov 2, 2021 earnings report and discussions indicate 2021 was not a great opportunity. The company posted a $304 million inventory write down in its third quarter and said that the total write down would be more than $540 million. Zillow will shut down its Zillow Offers division, leading to a 25% reduction in employees.
One of the eye-opening statements made in the company’s shareholder letter written by CEO, Rich Barton, and chief financial officer, Allen Parker, was “Our aim was to become a market maker, not a market risk taker.” The Zestimate apparently did not give them adequate short term future prices.
Does “market maker” bring up comparisons to the Hunt brothers effort in 1979 to become a market maker for silver which drove up the price of silver from $6 per ounce in early 1979 to $50 per ounce in January 1980?
Read more at Zillow Zestimate.
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