Faculty member Desiree Fields publishes Tech and finance firms buying up homes doesn’t bode well for everyone else in The Washington Post
Desiree Fields writes on the proliferation of corporate real estate iBuying, or instant buying, and its impacts on renters, hopeful homeowners, and residential communities.
Tech and finance firms buying up homes doesn’t bode well for everyone else
Zillow shut down its iBuying program, but other corporate interests won’t be deterred
Zillow, the nation’s biggest digital real estate company, announced recently that it would shut down Zillow Offers, its iBuying plan. The company attributed this decision to challenging labor market and supply chain conditions during the coronavirus pandemic. The iBuying, or instant buying model, is predicated on buying and selling homes through a digital platform: Buyers use algorithms to price properties and acquire them directly from homeowners looking to make a quick, unencumbered sale. They then refurbish the properties and flip them to a new buyer. Zillow rapidly expanded its iBuying business in 2021, but the pandemic introduced some wrinkles to its ambitions, namely the unexpected shortage of labor to carry out renovation work and delays on materials for those properties. Add in a tight housing supply and a fast-moving real estate market, and Zillow found it couldn’t make money with the new model.