We in the broker community have long known that Zillow's Zestimates are an overrated and relatively inaccurate metric in the residential real estate space. Their highly-touted algorithms have all-too-often misled buyers and sellers in their decision-making on home value. So who's the latest victim?
Zillow Offers, the ibuying (i for instant) home flipping new business venture will be shutting down in the next few months according to a statement released yesterday. Their CEO has acknowledged that its pricing algorithms weren't accurate enough to build and sustain a stable business.
As a result, they've purchased homes at a higher price than what they think they can sell them for now. Consequently, their business is losing over a half-billion dollars in market value and has lost $380 million dollars in Q3 alone.