It would be criminal for me not to have an opinion about all this stuff that went down with Zillow. Basically, they lost a ton of money with their I buying program.
Now let's rewind a little bit and get educated. In 2018, that's when Zillow and announced their iBuying program, which was basically buying houses in bulk then used an algorithm to determine the price. They thought if they used their Zestimate to buy thousands of homes that they could participate in this home flipping business.
Well, they couldn't see the future. They couldn't see that there was a pandemic that was about to happen. That the real estate market was going to basically be on hold for a while and then explode prices. So, they basically lost millions of dollars, which guys in the grand scheme of things, it wasn’t that bad. Right? They're smart to stop their iBuying program because they were losing money; and it wasn't a smart business plan. They finally admitted to what every realtor in the country had been shouting from the rooftops from day one of Zillow, even coming into existence, which is that the estimate is a bunch of crap. Mike Dupree, who's the real estate tech strategist at Zillow, called the Zestimate a toy. Yes. A toy, something, you entertain yourself with something.
Basically, something that is a starting point. It's not anything that can be used as an appraisal. You can't use it; it's for entertainment purposes only. This estimate, hopefully you reading this, can realize that when you're looking at this estimate, that's for fun. It's not actually what your home is worth.
We have to recognize that it would be stupid for us to think that Zillow's going under, yes, they're stock plummeted, but are they gone forever? Are they not going to be in the real estate tech world anymore?
In my opinion, they're not going anywhere. I think that they're going to make a pivot, a big move. They're going to come up with something different to make money and to stay in the game. But that's just my 2 cents.
Agree with me, disagree with me. If you have any questions or you want to start a conversation, let’s talk.
Don’t forget to catch up on my weekly show, Taya’s 2 Cents, where share my two cents on different real estate topics from buying and selling real estate, owning a home and more.