Zillow is offloading 7,000 homes — raising ‘red flags’ about the real-estate market

  • Georgia Perimeter Homes
  • 11/3/21

Zillow’s unexpected announcement in October that it was temporarily pausing its home-buying activities raised many analysts’ eyebrows. Now, the company is reportedly offloading thousands of homes at a discount.

Some argue that more concerning trends could be on the way.

The company’s Zillow Offers division is what’s known as an “iBuyer” — it purchases and sells homes directly to consumers, typically renovating them in between.

Following a report in mid-October from Bloomberg, Zillow Z, -11.63% ZG, -11.62% confirmed that its Zillow Offers division would not be signing any additional new contracts to purchase homes through the end of 2021.

In explaining the move, Zillow said the company was facing a backlog of renovations and dealing with operational-capacity issues.

Now, though, Bloomberg is reporting that the company is selling off roughly 7,000 homes, looking to claw back $2.8 billion in the process. A separate report from KeyBanc analyst Edward Yruma found that two-thirds of the homes Zillow has listed for sale feature an asking price below what Zillow paid for the property, with the average discount being 4.5%.

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