Despite the ethics behind the business, I thought Zillow Offers was going to be hugely successful. My guess is a few factors go into why it might not have been successful:
1. ZO overpaid for homes, offering over asking price for most homes
2. During the pandemic, housing inventory/supply (the number of houses for sale) tanked. This hurt Zillow's primary business, which thrives on the velocity of the market
3. ZO continued to purchase homes during the pandemic, overpaying, and adding huge liabilities
4. The inevitability of increasing interest rates could (probably will) cause housing market fluctuations that leave Zillow-owned homes in the red for awhile
Zillow was leveraging their primary business to make Zillow Offers work. Unfortunately, a really bad year makes it difficult to justify the huge liability.
1. ZO overpaid for homes, offering over asking price for most homes 2. During the pandemic, housing inventory/supply (the number of houses for sale) tanked. This hurt Zillow's primary business, which thrives on the velocity of the market 3. ZO continued to purchase homes during the pandemic, overpaying, and adding huge liabilities 4. The inevitability of increasing interest rates could (probably will) cause housing market fluctuations that leave Zillow-owned homes in the red for awhile
Zillow was leveraging their primary business to make Zillow Offers work. Unfortunately, a really bad year makes it difficult to justify the huge liability.