After watching rivals Opendoor and Redfin drop out of the iBuying game, Zillow Group said Monday that it would also suspend home-buying amid the coronavirus pandemic.
In a statement, co-founder and CEO Rich Barton cited emergency orders in New York, California, Illinois, Louisiana, Ohio and Nevada, which have instructed nonessential businesses to shutter. In New York, Gov. Andrew Cuomo specifically told real estate agents to stop in-person showings and open houses.
“Given the concerns for public safety and rapid developments by governments that restrict local real estate activities, we determined it was prudent to pause our home buying to preserve our capital,” Barton said in the statement. “We plan to restore Zillow Offers to full operations once health concerns pass and local health orders are lifted.”
Although it won’t be purchasing homes, Zillow will continue to sell homes through Zillow Offers, using virtual tours and other technology.
Over the past month, the company slowed its home-buying activity. At the end of 2019, Zillow owned 2,707 homes. As of March 19, it had 1,860 homes.
Barton has previously called iBuying a “moonshot” bet, saying that to ignore it would be an “existential threat.” In 2019, Zillow’s revenue more than doubled to $2.7 billion. Revenue from iBuying was $1.4 billion, compared to $52.4 million in 2018. Zillow’s losses were $305.4 million, up from $119.9 million.
Last week, Redfin, Opendoor and Realogy also suspended home-buying.
In a letter to shareholders, Redfin CEO Glen Kelman cited uncertainty in the market and economy overall. “We remain as committed as ever to giving homeowners the option of an instant offer,” he said, “but only when we can know what a fair price for an offer would be.”