HILLSBOROUGH COUNTY, Fla — Since the pandemic started, we've told dozens of stories of how the current housing market has impacted many lives and businesses.
And this week we're learning that Zillow's house flipping entity is the market's latest victim.
"[This] decision was not taken lightly, especially considering the hard work and commitment from the Zillow Offers team. But ultimately, we determine that further scaling up Zillow Offers is too risky too volatile to -- too volatile to our earnings and operations, too low of a return on equity opportunity, and too narrow in its ability to serve our customers," said Zillow CEO, Richard Barton.
The company announced on November 2, that it will no longer be buying and selling homes directly—because the current market has made it hard to predict how much a house would sell for, which is causing Zillow to lose money.
Housing experts tell ABC Action News there are several other factors that also make this type of venture difficult right now.
"They've got to sell it within a short period of time and the market isn't going to permit them to make the type of returns they need to make," said the founder of Florida State Realty Group, Stephen McWilliam.
"There are a lot of problems with respect to supply chain and with the labor side," said the Director Of The Lucas Institute For Real Estate Development & Finance At Florida Gulf Coast University, Shelton Weeks.
The company currently owns at least 100 homes in the greater Tampa Bay area, that it's now trying to sell...quickly.
But those experts say that doesn't mean interested buyers will get a deal.
"People start calling realtors saying 'Hey, I want to buy a Zillow home I hear they got to sell them so I'm gonna offer them a low-ball offer.' That's just not realistic in my opinion. Houses will be sold. They'll be absorbed in the market," said McWilliam
Experts say this type of operation only benefits people looking to sell their house quickly and they encourage those who have a little more time, to seek out a realtor who knows your local housing market.
"It's been a success for decades and it will be successful for decades into the future in my opinion," said McWilliam
Zillow has released the following statement to ABC Action News:
“We are continuing to sell our remaining inventory the same way we always have, which includes on the open market and listed traditionally. We sell all of our homes to buyers of all types, which includes individuals, families, individual investors, institutional investors, and nonprofits.”