Zillow announced late Tuesday that it is discontinuing Zillow Offers citing a $381M last quarter loss, according to its most recent earnings report. This decision includes a 25% reduction of Zillow's workforce. This announcement was made after the closing bell on November 2 and as of November 3, the company's share price has dropped to its lowest price in52 weeks of $64.04. It's high in the last 52 weeks being $212.40.¹
This follows its announcement on October 18th that it was pausing any new purchases through Zillow Offers. Competitors such as Redfin and Offerpad confidently issued statements related to continuing forward.²
“While we built and learned a tremendous amount operating Zillow Offers, it served only a small portion of our customers,” said Zillow co-founder and CEO Rich Barton, in a statement. “Our core business and brand are strong, and we remain committed to creating an integrated and digital real estate transaction that solves the pain points of buyers and sellers while serving a wider audience.”³
According to the Zillow release, the company expects to write down around $550 million in Q3 and Q4 of this year after purchasing or agreeing to purchase homes “at higher prices than the company’s current estimates of future selling price.”⁴ According to the Wall Street Journal, Zillow currently holds an inventory of around 9,800 homes across the U.S., with 8,200 under contract.⁵
¹ Williams, Jesse. (2021, November 2). Zillow Flames Out of iBuying, Citing 'Unpredicability'. Inman news. Retrieved November 2, 2021, from Source.
² Foreman, Lara. (2021, October 18). Zillow Gets Outplayed at Its Own Game. Wall Street Journal. Retrieved October 19, 2021, from Source.
³ Williams, Jesse. (2021, November 2). Zillow Flames Out of iBuying, Citing 'Unpredicability'. Inman news. Retrieved November 2, 2021, from Source.
⁵ Friedman, Nicole and Parker, Will. (2021, November 2). Zillow Quits home-Flipping Business, Cites Inability to Forecast Prices. WallStreet Journal. Retrieved November 2, 2021, from Source.