The company it in a statement Tuesday it was вЂњwell-positioned to meet consumer demand.вЂќ Opendoor, which went public last year through a merger with one of Chamath PalihapitiyaвЂ™s blank-check companies, saw its shares drop 15% on Tuesday after the news that Zillow was selling 7,000 homes raised questions about the iBuyer business model. ItвЂ™s become clear that Zillow misjudged the housing market, making more aggressive offers just as competitors Opendoor Technologies Inc. The company expects to buy roughly 9,000 homes in the fourth quarter and said it will take a writedown of as much as $265 million on home purchases that will close in the final three months of the year. ZillowвЂ™s will continue selling house for at least a few months. Zillow bought roughly 9,700 homes in the third quarter, due to what it called вЂњhigher-than-anticipated conversion rates.вЂќ It also booked a $304 million writedown on inventory owned at the end of the period вЂњas a result of unintentionally purchasing homes at higher pricesвЂќ than the company now thinks it can sell them for. and Citigroup Inc.ДЄs recently as August, Barton was boasting about the popularity of the service, telling investors that the traditional way of selling a home was so вЂњdreadful and dreadedвЂќ that customers were willing to bypass potential bidding wars to sell to Zillow вЂњin this sizzling-hot sellers market.вЂќ It has also lined up $500 million credit facilities with Credit Suisse Group AG, Goldman Sachs Group Inc. Barton set an ambitious goal, seeking to buy 5,000 homes a month by 2024.Д®arlier this year, the company borrowed more than $1 billion through two bond offerings, making it the first iBuyer to tap the securitization market. Zillow used pricing algorithms to buy homes from their owners, make light repairs, and put them back on the market. Read more: Zillow Pauses Home Purchases as Snags Hit Tech-Powered Flipping In 2018, Barton, one of the companyвЂ™s founders, reclaimed the role of CEO and pivoted into the high-tech home-flipping business, called iBuying. On Monday there was another sign that something had gone wrong: Bloomberg reported that the company was marketing about 7,000 homes for roughly $2.8 billion to institutional investors.ДЇor most of ZillowвЂ™s 15-year history, the company has been known for publishing online real estate listings and home-price estimates - called Zestimates - and seeking to profit by connecting agents with potential clients. In the weeks after, it became clear that the company had overpaid for properties and was taking bigger losses on sales. 18, it issued a statement confirming a Bloomberg News report that it wouldnвЂ™t make any new offers on houses for the rest of the year as it struggled to find workers to fix the homes it had under contract.

And for millions of owners who watched their home values surge during the pandemic, the companyвЂ™s quick exit raises an uneasy question: Is the boom over? Barton emphasized instead that buying and selling thousands of homes every month required the company to put too much capital at risk.

Seattle-based Zillow is the best-known real estate company in America. Read more: Zillow Selling 7,000 Homes After Halt in Flipping Operation вЂњFundamentally, we have been unable to predict future pricing of homes to a level of accuracy that makes this a makes a safe business to be in,вЂќ Barton said on an earnings call. housing market that has been running hot for well over a year during the pandemic. With the companyвЂ™s losses mounting, Chief Executive Officer Rich Barton said it had become too risky to scale the business in a U.S. The business hit a major snag in recent months as Zillow tweaked its algorithms to make more aggressive offers, causing it to overpay for houses just as the heated U.S. The decision to abandon home flipping comes as the companyвЂ™s third-quarter results showed it lost more than $380 million in the operation, called Zillow Offers.

House flipper game before and after