Zillow Exits Home-Buying Business, Stock Plunges 25%

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Zillow Exits , Home-Buying Business, Stock Plunges 25%. CNBC reports shares of online real estate firm Zillow fell 25% after the company announced plans to leave the home-flipping business. Zillow said the exit was attributed to an inability to predict increasingly volatile housing prices. Though its online marketplace continues to thrive, the company reported a loss of more than $328 million in the third quarter. CEO Rich Barton says Zillow will cut a quarter of its workforce. We determined that further scaling up Zillow Offers is too risky, too volatile to our earnings and operations, too low of a return on equity opportunity and too narrow in its ability to serve our customers. , Rich Barton, CEO Zillow, via CNBC. Zillow's iBuying process allowed homeowners to sell their houses instantly through the company's online marketplace. Using massive data sets to calculate automatic offers, Zillow would buy a home, invest in repairs and try to sell it for a profit. Using massive data sets to calculate automatic offers, Zillow would buy a home, invest in repairs and try to sell it for a profit. Using massive data sets to calculate automatic offers, Zillow would buy a home, invest in repairs and try to sell it for a profit. The U.S. labor market has thinned, and supply chain issues have sent the price of building materials through the roof. The U.S. labor market has thinned, and supply chain issues have sent the price of building materials through the roof. Barton says the company's pricing model can no longer be trusted. What it boils down to is our inability to have confidence in pricing in the future, enough confidence to put our own capital at risk. , Rich Barton, CEO Zillow, via CNBC