There is new info on why Zillow took such a huge loss on its house flipping operation Zillow Offers. Originally Zillow blamed the AI algorithm for over paying for houses. The Wall Street Journal has reported that the real reason that Zillow over paid for houses is because they wanted to buy more houses than Opendoor for the year. Because they were behind in their home purchases, they increased their offering prices to home sellers to entice more of them to sell to Zillow Offers.

Zillow Stock Crashed after announcing a $328 million dollar 3rd quarter loss today. Zillow lost $380 million in their home flipping business and will be shutting it down permanently. Along with closing Zillow Offers, they will layoff 25% of their workforce.
Zillow also booked a $304 million write down on inventory owned at the end of the period “as a result of unintentionally purchasing homes at higher prices” than the company now thinks it can sell them for.
Zillow’s fire sale could continue: The company expects to buy roughly 9,000 homes in the fourth quarter and said it will take a write down of as much as $265 million on home purchases that will close in the final three months of the year.
Zillow stock has crashed more than 50% from its high this year. Is Zillow stock a buy here or will it keep going lower?

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