Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff
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Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff
#2The previous thread on this, from earlier today:
Zillow seeks to sell 7k homes for $2.8B after flipping halt - https://news.ycombinator.com/item?id=29081118 - Nov 2021 (521 comments)
It seems the current article adds significant new information, so we won't treat it as a follow-up (or dupe).
Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff
#3For some reason I can't reply to dang's comment, but this is Zillow basically saying they are giving up completely on flipping, whereas the article this morning said that they were pulling back and delaying buying more houses to flip (not giving up, but in trouble).
So this is pretty big additional news from the context of this morning's article.
Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff
#4"pushing total losses on those houses to more than $550 billion."
How can this even be possible? These numbers make zero sense.
Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff
#5"pushing total losses on those houses to more than $550 billion." How can this even be possible? These numbers make zero sense.
*million, not billion.
Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff
#6"pushing total losses on those houses to more than $550 billion." How can this even be possible? These numbers make zero sense.
Definitely a typo where an extra three zeroes were added to the $550 million loss headline.
Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff
#7This is kind of a big deal in the real estate sector. The only reason that Zillow would sell everything right now is if they believed that the carrying costs of the properties until they (eventually) sell would eat all of their profits. They must be seeing flashing red signs across the board that there's a slowdown in the market and that scenario is exactly what will play out if they don't exit quickly.
There's no way that OpenDoor doesn't follow them out the door here in the next couple of months. The business model is exactly the same. Anecdotally I haven't seen any reason to think OpenDoor is doing much better around here.
This coupled with the Fed tapering could cause the real estate market to cool pretty quickly.
If you're buying a home right now, make sure you're moving somewhere you're willing to live for a while and that you're not going to be in financial duress if your home loses 20% of its value.
Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff
#8This is kind of a big deal in the real estate sector. The only reason that Zillow would sell everything right now is if they believed that the carrying costs of the properties until they (eventually) sell would eat all of their profits. They must be seeing flashing red signs across the board that there's a slowdown in the market and that scenario is exactly what will play out if they don't exit quickly. There's no wa…
Agree 100%... I'm astonished that a large corporation trying to get into this business, would "bite off more than they could chew". Don't they have MBAs and financial models to assess this sort of thing?
Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff
#9This is kind of a big deal in the real estate sector. The only reason that Zillow would sell everything right now is if they believed that the carrying costs of the properties until they (eventually) sell would eat all of their profits. They must be seeing flashing red signs across the board that there's a slowdown in the market and that scenario is exactly what will play out if they don't exit quickly. There's no wa…
Agree 100%... I'm astonished that a large corporation trying to get into this business, would "bite off more than they could chew". Don't they have MBAs and financial models to assess this sort of thing?
> Don't they have MBAs and financial models to assess this sort of thing?
All models are wrong, some are useful.
Zillows were wrong, and apparently not useful.
Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff
#10This is kind of a big deal in the real estate sector. The only reason that Zillow would sell everything right now is if they believed that the carrying costs of the properties until they (eventually) sell would eat all of their profits. They must be seeing flashing red signs across the board that there's a slowdown in the market and that scenario is exactly what will play out if they don't exit quickly. There's no wa…
Agree 100%... I'm astonished that a large corporation trying to get into this business, would "bite off more than they could chew". Don't they have MBAs and financial models to assess this sort of thing?
Isn't Zillow more like a post-IPO startup than a bigcorp? If so, it makes complete sense that they might "bite off more than they could chew," (e.g. Pets.com) a lot of startups end that way.