The biggest news in the real estate market recently is the news that Zillow is exiting the homebuying market. For years, Zillow has been the go-to search engine for homebuyers and sellers. In 2018, they began a new business model: house flipping. They had not yet made their way to the St. Louis market but were buying thousands of homes across the country. Their goal was to make the homebuying process more seamless. Buy the homes directly from sellers, and then resell them to buyers at a slight profit margin.
The announcement that they were shutting down that side of the business has brought up many questions. Real estate values are still rising, the market is hot. Why did this model not work for Zillow? The CEO spread some light on this subject by stating that "We've determined the unpredictability in forecasting home prices far exceeds what we anticipated and continuing to scale Zillow Offers would result in too much earnings and balance-sheet volatility.”
The reason I bring this up in the market update is two-fold. One, validation that Z-estimates are not always accurate. Many times owners use these values to determine the value of their home. However Z-estimates do not take many factors into consideration that a local expert will: the things that can't be seen in an algorithm.
The second reason I bring this up is because as much as Zillow wanted to streamline the real estate process, they learned that when you introduce homes and people, two variables that will be different every single time, it is always a dynamic situation. No two transactions are ever alike.
The market here in St. Louis is still strong. The craziness of Summer has faded and the homes going under contract quickly with multiple offers are the homes that are priced well and/or in top condition. If you are considering buying or selling in 2022, please reach out for a consultation as to how we can help you achieve your goals.