Heard on the Street: While Zillow’s flop in home flipping doesn’t necessarily mean iBuying is doomed, it does highlight the risk
Lack of experience alone could explain why Zillow struck out. Both Zillow and Opendoor held on to homes for upward of 30 days before listing them in September—their longest since before the Covid-19 pandemic began in the U.S., according to YipitData. Meanwhile, YipitData indicates that buy-to-list-price premiums dropped significantly over the past few months for both companies as their percentage of listings with active price cuts increased.
For Zillow, a company that initially built itself on the business of helping to pair agents with house hunters, iBuying was always going to be a delicate dance between marginalizing and empowering agents. It also had its popularity with consumers to consider. Earlier this year, “Zillow surfing” was so popular it became the punchline of a “Saturday Night Live” skit.
Back in 2019, when Zillow’s co-founder and chief executive, Rich Barton, retook the helm, he said he was building an iBuying business to serve consumers who “have grown to expect magic to happen with a simple push of a button.”
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