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They were trying to act as a market maker, providing liquidity for a price. Nothing wrong with that.

• iskander 5y ago
  It's more complicated than that since they also have a huge influence on prices through Zestimates. They undoubtably kept housing prices rising for the past few years, which was very profitable to them as large scale flippers.
• engineer_22 5y ago
  The market doesn't need any more liquidity. Banks will lend to anyone with a pulse.
  • lokar 5y ago
    That is not the kind of liquidity I'm talking about. Look up what companies like citadel securities do in equities markets.
• mym1990 5y ago
  More so than providing liquidity they are providing increased velocity. I would love to know if there are properties that Z has bought and sold more than once...
• maxsilver 5y ago
  > Nothing wrong with that. Zillow was literally scalping housing, a basic human need that all people must buy. That's generally considered very immoral by most reasonable people. And they didn't just do it once or twice, they did it at ridiculous scale (tens of thousands of homes sold last quarter, was a sale to a scalper to artificially drive up all housing prices). Most reasonable people would consider this behaviour to be evil (like, comic-book-villain level evil). Even scalping a optional-only luxury item like concert tickets or whatever is already considered unethical by most folks.
  • pcwalton 5y ago
    I don't consider it evil. When you buy a house, fix it up, and resell it, you're essentially providing a renovation service to whoever will buy it next. There's no meaningful difference between you renovating a house and selling it and an owner-occupant buying the house and renovating it themselves. In this case, Zillow bought houses too high and sold them too low. As a result, the market punished that irrational behavior.
    • 93po 5y ago
      If there's no difference then there'd be no profit for Zillow and they wouldn't be doing this to begin with. Clearly there's a difference and it's morally bankrupt
      • esyir 5y ago
        His argument is that Zillow was providing a valuable service in the renovation process. Value-add allows them to charge for it.
        • 93po 5y ago
          That would make sense if Zillow employees were literally the people painting the walls. As it is (or was), there's probably a project manager that managed hundreds of houses, spends all day on the phone call painting companies, and then just assumes they do a good job. I'm perfectly capable of calling a painting company myself and don't need to pay Zillow thousands of dollars extra to do it for me.
          • esyir 5y ago
            The integration of renovation in the sales process is a differentiating factor in itself. That you're not the target market or, that it might not have been successful, doesn't change that.
      • UncleEntity 5y ago
        Isn’t this whole issue based on the fact that there is no profit for Zillow and they are no longer going to be doing this? Half a billion dollar loss seems like a pretty good indication that maybe…