Yep, as you can see, prices are still rising and demand is still strong! Competition has been driving up prices. Any real estate investor understands this is not the ideal time to buy, but there are families still wanting to live here and own their own home.
Well for buyers there will be a little less competition, as Zillow has thrown in the towel and announced they will not be buying any more homes that are not already in contract through its instant buyer (ibuyer) program. Zillow said “hit its capacity for buying homes for the remainder of the year.” According to an employee’s email. Zillow’s CEO Rich Barton said, “we’ve determined the unpredictability in forecasting home prices far exceeds what we anticipated.” Other ibuyers are still out there, but personally I saw Zillow as the biggest. I wonder if others will follow? Time will tell.
Zillow uses algorithms to determine how much they will buy for, but it’s not as easy as they thought it would be fixing up houses, and they started seeing that when they actually needed local people to DO the work. Inspections, painting, carpet and contractors are also in high demand, and finding good people is harder than it looks. If you’ve tried to get any work done lately you know how difficult it is.
In the second quarter of the year, according to Zillow, they bought 3,800 homes. In August, Zillow borrowed $450 million in a bond offering. On Oct. 18, Zillow shares fell 6.8% in premarket trading after the announcement of the halt in homebuying. Zillow stock also fell this year in the double digits.
My crystal ball tells me that if selling is on your horizon, do it now, because crashes come fast and hard, and anything that goes up must come down.
By Tiffany Stock, Real Estate Broker, Keller Williams