Framing Zillow v residential buyers as some efficient market where Zillow is
competing like anyone else and not only that, providing critical liquidity via DMM capabilities (designated market maker) is absurd on multiple levels.
DMMs operate on exchanges with membership licenses and a galaxy of exchange regulations, especially around price moves. Zillow and the open real estate market has none of that. Similarly, a DMM would not outbid and market capture the way Zillow does. Another one you wouldn’t see on an exchange with DMMs is the army of debt financing behind Zillow vs what’s behind retail purchasers. Explaining beyond that how framing Zillow as a DMM is a cherrypicked approach with no basis in real estate market reality is not worth the time. It’s really a nothingburger of an approach that comes off as a quote from a Rand book.
At its core, a DMM provides liquidity. Zillow buying real estate, taking it off the market for a month to renovate and flip at a higher price, is not that.
DMMs operate on exchanges with membership licenses and a galaxy of exchange regulations, especially around price moves. Zillow and the open real estate market has none of that. Similarly, a DMM would not outbid and market capture the way Zillow does. Another one you wouldn’t see on an exchange with DMMs is the army of debt financing behind Zillow vs what’s behind retail purchasers. Explaining beyond that how framing Zillow as a DMM is a cherrypicked approach with no basis in real estate market reality is not worth the time. It’s really a nothingburger of an approach that comes off as a quote from a Rand book.
At its core, a DMM provides liquidity. Zillow buying real estate, taking it off the market for a month to renovate and flip at a higher price, is not that.