Housing giant Zillow has come under fire for manipulating the housing market. Here's what you should know.
Zillow, the house-hunting app to the stars, began a program called iBuying, where the company purchased over 9,000 homes to remodel and resell to buyers. Flipping property isn't a new concept by any means, but Zillow took things to the next level.
They spent (and lost) over $300 million in only a short period. Flipping houses on a massive scale takes vast resources and a solid understanding of market trends: two things that Zillow should have had in spades.
However, in reality, the company sold its iBuying properties at high prices outside of the range of their target consumers, which left Zillow and its investors holding the bag. Out of the 9,000 homes purchased and renovated, only 3,032 were sold.
The pandemic and stiff competition from other sellers have led to astronomical prices and a tight market for buyers. So what is the fallout from Zillow's failure, and what happens next?
The Real Authority
In most cases, retail giants have access to more information about the product and consumer, but when it comes to buying a home, no one knows more about the local housing market than locals.
Bill Wheaton, a housing economist at the Massachusetts Institute of Technology, says that enterprises like Zillow don't take time to understand the neighborhoods. When it comes time to buy or sell, ultimately, the consumer knows best.
What This Means for the Housing Market
The housing market has been devastated by the pandemic. Prices are through the roof, and as homeowners struggle with mortgage payments, downsizing is more complicated than ever. It's not a buyer's or seller's market – both sides are struggling to make do.
Another complication is moratoriums. Most states and the federal government have ended mortgage moratoriums which means homeowners who can't afford payments are looking for other solutions.
Debt isn't just about money – it's a mental and emotional strain on you and your family. These are challenging times, but you do have options, and Buchalter & Pelphrey Attorneys At Law can help.
From bankruptcy to debt negotiation and asset protection, our compassionate attorneys can help you every step of the way. You don't have to live in fear of foreclosure or repossession. Our team of experienced legal professionals has helped countless clients find debt relief and achieve a stable financial future.
Schedule a consultation with Buchalter & Pelphrey Attorneys At Law today!