Is the housing market crash here?

Question

Just watched a video explaining how Zillow is selling between 60-70% of homes they bought in markets like Phoenix, Dallas, Houston, and Atlanta for a loss. Does this mean Zillow is preparing for a crash and cutting their losses when they can, or was I just fooled by a YouTube video?

JD Martin · Answer

7k houses out of 650k total US listings is 1% of the total listings in the US. Even if Zillow's homes are concentrated in 50% of the listings in the US that's still just a tiny percent of what's for sale. Nobody but Zillow is going to even notice these houses are for sale.

Bill B. · Answer

They specifically said they couldn’t get enough workers to fix up the properties so they could be “fixed and flipped”.

Property prices “only” being up 10-20% YOY usually isn’t considered a crash.

Victor Saumarez · Answer

There’s no doubt the market is very over-bought in many locales, but many investors are looking at the Fed’s response to inflation. If inflation remains stubbornly high, tightening will occur sooner than anticipated. That will probably lead to a flurry of listings, which could spiral dangerlously out of control. Institutional investors will lead the charge for the exits so it’s always worth keeping your finger on the pulse.

Vernon Watts · Answer

If that's true, then the off loading of these properties is where the good money will be. It should swing back around to the investors and buy and flip purchasers, at a lower price scale. After all, it's better to have a gain on what you lost, then to lose it all by keeping property you can't move over a long period of time.

Happy Hunting, Vernon

Caleb Brown · Answer

No Zillow over payed and had a flawed business plan. They make up a small percent of the market for what they buy/sell

Vernon Watts · Answer

Indeed JD Martin, You're totally on point.

Daniel James Russell · Answer

@JD Martin

We were lucky enough to buy a townhouse (part of a duplex) in a very desirable neighborhood 10 minutes walk from St Pete's Beach Dr.  The property is now up (according to Zillow) ~60%.  Good for us (and we have made some significant upgrades), but I'm concerned on maintaining those gains and whether they would wither given the Fed's proposed hikes.  We have the benefit of having a newer construction (2005) vs. most of the other properties that are circa 1920 with all the small rooms, but more 'charm'. In addition, we are currently in an extremely supply-constrained market that I would imagine won't normalize for a year or so, driving prices up to a bidding-war scenario.So, questions loom:-  Your guess on impact of all properties in a rising rate environment, say 2% increase over the next two years.-  Your opinion on whether to hold or sell, even given the tax/commission cost of selling against a bidding war.

Cheers.

Theresa Harris · Answer

Someone else posted on that as well.  Zillow speculated and lost.  They bought a ton of houses to flip and then it didn't work. My guess is they didn't do their homework.

Is the housing market crash here?

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