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I don't get Zillow's play here. They were for a long time the de facto neutral party everyone used to look at houses. Great. Then they got into doing contrac

I don't get Zillow's play here. They were for a long time the de facto neutral party everyone used to look at houses. Great. Then they got into doing contracts apparently, still OK. Then they started competing against people and overbidding everyone, at the height of what appears to be the biggest housing boom of my lifetime. This was not only apparently financially dangerous, but an act that puts them in a bad light, publicity wise. I cannot think of how anyone thought this was an OK idea.

sumedh 5y ago
> I cannot think of how anyone thought this was an OK idea. I guess they assumed flipping houses would have more revenue and profits.
_fat_santa 5y ago
I think Zillow saw the numbers going up in the housing market and got FOMO. It's crazy to think an institution like this would get FOMO, but I think what happened is in 2020 they saw housing prices go through the roof, thought to themselves "hey we have all of this data, we can make a quick buck here" and piled in only to now get burned.
- siruncledrew 5y ago
  It makes sense there could have been internal shareholder/executive pressure to continue expanding into other aspects of housing markets to further entrench their positions against competitors, but hedging their bets backfired in some areas, and now is the retrospective time to cut their losses and refocus on their strengths.
- notjesse 5y ago
  They started ZO back in 2018. I think the bigger concern was the amount of growth and threat Opendoor presented them. There was a vision that they will fundamentally change the sector and make Zillow an equivalent of what the White Pages is to Google. So yes it was FOMO, but not based on quickly appreciating real estate.
  - penneyd 5y ago
    This is 100% it.
jldugger 5y ago
> I cannot think of how anyone thought this was an OK idea. I imagine they felt the only way to prove how good their Zestimates are was to start acting on them. And it's entirely possible that the problem is they have spent the last 10 years tweaking their Zestimate algos to make listing agents happy, increasing prices. Like, nobody sues you when your estimate is too high, but when you get it too low, get your legal counsel prepped: https://www.marketwatch.com/story/do-zillow-zestimates-mislead-home-buyers-illinois-lawsuit-claims-yes-2017-05-22 https://www.marketwatch.com/story/do-zillow-zestimates-misle...

sumedh 5y ago

> I cannot think of how anyone thought this was an OK idea. I guess they assumed flipping houses would have more revenue and profits.

_fat_santa 5y ago

I think Zillow saw the numbers going up in the housing market and got FOMO. It's crazy to think an institution like this would get FOMO, but I think what happened is in 2020 they saw housing prices go through the roof, thought to themselves "hey we have all of this data, we can make a quick buck here" and piled in only to now get burned.

siruncledrew 5y ago
It makes sense there could have been internal shareholder/executive pressure to continue expanding into other aspects of housing markets to further entrench their positions against competitors, but hedging their bets backfired in some areas, and now is the retrospective time to cut their losses and refocus on their strengths.
notjesse 5y ago
They started ZO back in 2018. I think the bigger concern was the amount of growth and threat Opendoor presented them. There was a vision that they will fundamentally change the sector and make Zillow an equivalent of what the White Pages is to Google. So yes it was FOMO, but not based on quickly appreciating real estate.
- penneyd 5y ago
  This is 100% it.

jldugger 5y ago

> I cannot think of how anyone thought this was an OK idea. I imagine they felt the only way to prove how good their Zestimates are was to start acting on them. And it's entirely possible that the problem is they have spent the last 10 years tweaking their Zestimate algos to make listing agents happy, increasing prices. Like, nobody sues you when your estimate is too high, but when you get it too low, get your legal counsel prepped: https://www.marketwatch.com/story/do-zillow-zestimates-mislead-home-buyers-illinois-lawsuit-claims-yes-2017-05-22 https://www.marketwatch.com/story/do-zillow-zestimates-misle...