Zillow (Wake county) facts and figures...

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Zillow started operating (buying) in Wake county in 2019Q1, specifically on 3/14/19 with a $312,000 purchase. Since Zillow doesn't hold property in their own name, and the holding company names that are disclosed by Zillow don't match the county records, I missed the initial Zillow buys/sells. My calculations are based on Zillow's holding entities, which I believe are correct since the address matches Zillow's offices in SEC documents. 

Zillow, at the end of 2019Q2, owns 51 properties compared to 226 owned by Opendoor. Zillow ownership is in two different LLLPs. The graphs show that Zillow purchases on average are newer than Opendoor's and are larger in heated square footage. Opendoor counts in BLUE, Zillow in RED. 

The ranges of the above graph are as in the last post (on Opendoor). Because of the large number, percentage wise, of Zillow acquisitions over 3000 sq.ft., I expanded the graph:

The average square footage for an Opendoor property is 2,068 and for Zillow is 2,589. The average acquisition price for their current holdings (end of second quarter, 2019) is $266,396 for Opendoor and $338,167 for Zillow. Historic Sales total for Zillow: 28. Opendoor: 801. Zillow bought 82 properties in 2019Q2 vs 225 for Opendoor. Inventory for Zillow, based on recorded transfer price, is $16.2M and for Opendoor is $60.2M. 

I looked at Zillow's 4 acquired properties over 4000 sq.ft. To me, they look like mistakes, in that the properties are larger than the overall neighborhood and the price paid seems too high.  Not enough data points yet, but it's a start. 

square feet - price - acquisition date
4,779  $477,000     05/15/19
4,382  $500,000     03/11/19
5,322  $535,000     02/14/19
4,148  $480,000     02/15/19

Upshots:

  • Zillow is now an active institutional flipper in Wake county
  • Zillow's average acquisition price is higher than Opendoor's, and properties Zillow acquires are newer
  • Opendoor has substantially more acquisitions and sales at the moment, by count and dollar value
Disclosures: same as last post

Updated over 1 year ago

Slight error on the 3/14/19 date... their first buy was reid 335460 on 1/31/19 ($350K)

Thanks. We're looking at investments in the inner coastal area of North Carolina. I thought I was fairly savvy. I was wrong. I didn't know that Zillow and Opendoor are buying up properties. I appreciate your work and sharing it with the rest of us.

@Chris Martin this is really interesting. Isn’t Zillow like the others and charge absurd fees to the seller and buyer? So just going off the purchase price recorded at the county seems like a poor way to see how they’re doing?

Originally posted by @Caleb Heimsoth :

@Chris Martin this is really interesting. Isn’t Zillow like the others and charge absurd fees to the seller and buyer? So just going off the purchase price recorded at the county seems like a poor way to see how they’re doing?

I am a real estate investor. When I see an institutional investor, be it flipper or rental homes, enter into my area, I want to know what they are buying. They are elephants. They move in with several hundred million to spend and they could care less about the other investors in the area. Likewise, I don't care about them, and don't really care "to see how they’re doing." I'd rather find out how and where to move to get out of the elephant's way. I do care about being crushed. 

When AH4R came to town, at first I didn't care. They actually propped up the market, significantly, and practically single handedly pulled their acquisition target market out of a bear market. But when they started showing up at my workplace, the county courthouse, and were bidding on everything in their wheelhouse... then I realized my job/business was over. I can't compete with institutional buyers slapping $1B around. What am I going to do? Step in front of the elephant? No way. I closed up my laptop and moved out of their way. The cycle ended and value players headed to the sidelines.

And... so what?
This simple graph may shed some light on my thoughts. Zillow (and other public companies) have 90 day windows. Quarterly reports matter. Generally companies want to close sales before end of quarter. So I speculated a similar phenomenon may occur with inventory. So I drew a line at 90 days. These are Zillow's closed SALES numbers. 

Is there a correlation between days in inventory and sale price? You tell me. In my world, the logical, actionable item for a buyer's broker (which I am not) seeing this data is to offer less at 55+ and 90+ days of Zillow holding inventory. But everyone already knows this, right? I just happen to know their historic selling pattern based on actual data. 

I know what they buy in detail. I know what they pay. I don't know what their fees are, concessions to brokers, etc. 

Will all this data and analysis personally help me? I don't know. I honestly doubt it. But I can't predict the future. Or can I? 

Here is a graph of Zillow's current inventory, with the bars indicating day in their inventory. 

The property that is above the line... I'd predict with some confidence that these properties are going to sell at or below what Zillow paid. I know these properties and will keep track. I don't know all the condition reports, and it is very possible (although probabilities might be small) that these properties will sell above the Zillow acquisition price. But I go by odds. 

I think Jim Cramer may have a point with his piece on Zillow. I base my conclusion on the numbers from their last 10-Q ($325M inventory) and the observations above. 

I don't know about Zillow.  I know something about North Carolina.  It has the resources for tomorrow and a decent University system.  It's a good place to invest.