Why is Zillow pausing iBuying?

by Ottie on October 18th, 2021

Zillow is apparently pausing the buying of new homes until the end of this year.  They're placing the blame on labor shortages and supply chain constrains.  Though these are certainly big issues in the US, the fact that Opendoor is 60%+ bigger than Zillow and hasn't noted a similar stop puts their decision in a negative light.   

It will be super interesting to see what the iBuyerStat trends show through the rest of the year with this official stoppage, and to see if Opendoor (or Offerpad) follows suit.)  Even though there are labor shortages and supply chain issues, it would seem that would addressed by continually rising home prices (though maybe Zillow is facing more margin pressure than the other companies.)  

There could also have been some unknown/unreported internal issue - for example, perhaps a group of critical on-the-ground employees up and quit, or are maybe (more likely in my view) many employees pleaded for a pause and Zillow execs responded.  A data point suggesting the latter is that glassdoor reviews seem to be largely positive.  (So execs may be responsive to this kind of employee pushback, before it gets too far for people to quit.) 

No matter what, I'm sure the decision wasn't made lightly, and it will be interesting to see what comes over the next few months. 


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