The hits keep on coming for Zillow, as the company is reportedly looking to offload several thousand homes and move forward in its iBuying business.
The company is aiming to sell 7,000 homes for $2.8 billion, Bloomberg reported, citing people familiar with the matter. The outlet reports Zillow is likely looking to move the homes in many transactions, rather than trying to package and offload them in one single swoop.
The Bloomberg report comes just days after an analysis published by Insider last week showed 64 percent of the homes were listed for less than the Zillow paid for them, with a median difference of $16,000.
Zillow’s stock opened at $102.83, but was down more than 6 percent to $96.98 as of 3:30pm ET, according to Yahoo Finance.
Two weeks ago, Zillow hit pause on its iBuying business pointing to a backlog of properties as the reason the company was “beyond operational capacity.”
Zillow Offers gives homeowners a chance to receive an offer on their home through Zillow’s technology, potentially allowing for a quick offer and sale. Once the sale closes, Zillow makes light repairs to the property and puts it back on the market.
The goal of the program is for Zillow to generate revenue by flipping a home for profit. The recent analysis by Insider, however, revealed the company’s listings are not setting itself up for success.
Of the 963 listings Insider reviewed across five key cities, 616 were being listed for less than Zillow’s purchase price.The problematic listings were particularly noticeable in Phoenix and Dallas, where 93 and 81 percent of listings, respectively, were below purchase prices.
Zilliow reported revenue of $1.5 billion from its iBuying business during the first half of 2021. Company CEO Rich Barton has stated that he believes the company could hit $20 billion in revenue on an annual basis from iBuying alone by 2024.
Zillow is scheduled to announce third-quarter earnings on Nov. 2.
[Bloomberg] — Holden Walter-Warner