One reason the housing market went wild last year (Minneapolis: for sale, real estate market)

[Cruz Azul Guy]

One word - Zillow.

If anyone doesn’t know, there is a Real Estate marketplace company called Zillow. Recently this company began aggressively buying up single family homes (mainly ‘starter homes’) in a number of metropolitan areas, including the Twin Cities. This same strategy was undertaken by other companies such as OpenDoor and Offer Pad. The practice has been termed “iBuying.”

This is described in greater detail in this article:
https://www.bloomberg.com/news/featu...-buy-thousands

I can now see that Zillow engaged in this practice pervasively in the Twin Cities, fueling the insane seller’s market surge we saw during most of 2021. The anecdotes of people getting dozens of offers above listing price within days of listing their home was because real home buyers were competing with corporate investors. This is the dark reality of modern day real estate.

Zillow is now in the process of winding down their home flipping division (GOOD I SAY!) This is evident as you can see what homes on the market are owned by Zillow while using their app. I ran a search today and found that 105 homes listed in the Twin Cities metro area are Zillow-owned properties.

I’m not sure if others agree but I find this kind of disturbing. We have family and friends that have struggled mightily to buy a home in the area and it is kind of disheartening to realize that their misery was exacerbated by the actions of greedy corporations.

So if Zillow is winding this down and if others follow suit, I expect this will cause a market correction. How swift the correction will be is anyone’s guess.

[wamer27]

Zillow lost so much money on this house flipping failure. They use Kris Lindahl for the sales. I drive around via my job and started seeing the Zillow signs on places for sale with Kris’s name and lawns were all not cut and looked terrible. Then I learned about the flipping failure on the real estate section here.

[Cruz Azul Guy]

Originally Posted by wamer27

Zillow lost so much money on this house flipping failure. They use Kris Lindahl for the sales. I drive around via my job and started seeing the Zillow signs on places for sale with Kris’s name and lawns were all not cut and looked terrible. Then I learned about the flipping failure on the real estate section here.

Yes. And every Zillow-owned property that I’ve looked at is currently listed at a LOWER price than what Zillow themselves paid for it a mere 3-6 months prior. In some cases these discounts are 30-40k or more!

[paiste13]

I don't see any houses in my area (SW suburbs) going for cheaper than a few months ago.

[Cruz Azul Guy]

Originally Posted by paiste13

I don't see any houses in my area (SW suburbs) going for cheaper than a few months ago.

These ones are in SW Minneapolis -

5912 Grass Lake Ter. - it sold to Zillow on 11/18/21 for $446,000. It’s currently listed for $411,900.

6044 James Ave S - it sold to Zillow on 10/7/21 for $436,900. It’s currently listed for $401,900.

6032 Vincent Ave S - it sold to Zillow on 10/22/21 for $409,800. It’s currently listed for $379,900.

Others in SW suburbs -
6982 Langford Ct (Edina)
6730 Vernon Ave #211 (Edina)
8435 Annapolis Way (Eden Prairie)
19063 Chenault Way (Eden Prairie)
4870 Glasgow Rd (Mound)
8011 W 107th St (W Bloomington)
8935 W 125th St (Savage)
15573 Brookside Ln NW (Prior Lake)
1039 Market St S (Shakopee)
1505 Spinnaker Rd (Waconia)

[wamer27]

Originally Posted by Cruz Azul Guy

These ones are in SW Minneapolis -

5912 Grass Lake Ter. - it sold to Zillow on 11/18/21 for $446,000. It’s currently listed for $411,900.

6044 James Ave S - it sold to Zillow on 10/7/21 for $436,900. It’s currently listed for $401,900.

6032 Vincent Ave S - it sold to Zillow on 10/22/21 for $409,800. It’s currently listed for $379,900.

Others in SW suburbs -
6982 Langford Ct (Edina)
6730 Vernon Ave #211 (Edina)
8435 Annapolis Way (Eden Prairie)
19063 Chenault Way (Eden Prairie)
4870 Glasgow Rd (Mound)
8011 W 107th St (W Bloomington)
8935 W 125th St (Savage)
15573 Brookside Ln NW (Prior Lake)
1039 Market St S (Shakopee)
1505 Spinnaker Rd (Waconia)

The 6044 James Ave S they didn’t do any remodel/flipping on it, but I can see exactly why they bought it for that purpose.

[snebarekim]

Originally Posted by Cruz Azul Guy

One word - Zillow.

If anyone doesn’t know, there is a Real Estate marketplace company called Zillow. Recently this company began aggressively buying up single family homes (mainly ‘starter homes’) in a number of metropolitan areas, including the Twin Cities. This same strategy was undertaken by other companies such as OpenDoor and Offer Pad. The practice has been termed “iBuying.”

This is described in greater detail in this article:
https://www.bloomberg.com/news/featu...-buy-thousands

I can now see that Zillow engaged in this practice pervasively in the Twin Cities, fueling the insane seller’s market surge we saw during most of 2021. The anecdotes of people getting dozens of offers above listing price within days of listing their home was because real home buyers were competing with corporate investors. This is the dark reality of modern day real estate.

Zillow is now in the process of winding down their home flipping division (GOOD I SAY!) This is evident as you can see what homes on the market are owned by Zillow while using their app. I ran a search today and found that 105 homes listed in the Twin Cities metro area are Zillow-owned properties.

I’m not sure if others agree but I find this kind of disturbing. We have family and friends that have struggled mightily to buy a home in the area and it is kind of disheartening to realize that their misery was exacerbated by the actions of greedy corporations.

So if Zillow is winding this down and if others follow suit, I expect this will cause a market correction. How swift the correction will be is anyone’s guess.

That is messed up of Zillow.

[CARas2020]

See it doesn't pay to be a greedy SOB.

I wonder how it is here as far as Zillow goes.
I didn't count exactly how many I saw listed (I used their website on my PC. But there were some. Things here in Portland, OR still seem over priced and property taxes are kind of high.

[Cruz Azul Guy]

Originally Posted by CARas2020

See it doesn't pay to be a greedy SOB.

I wonder how it is here as far as Zillow goes.
I didn't count exactly how many I saw listed (I used their website on my PC. But there were some. Things here in Portland, OR still seem over priced and property taxes are kind of high.

I just checked and saw 19 Zillow-owned properties for sale in Portland.

[Camden Northsider]

I dunno-- I agree having Zillow as a competitor likely exacerbated the selling conditions, but (unfortunately) large corporate homebuyers have been snatching up dozens to hundreds of Mpls properties long before Zillow entered the market. GA-based Havenbrook Homes has been particularly prolific here on the Northside-- when we listed in 2014 they submitted a competitive site-unseen offer (which was 1 of only 2 offers we received on that house-- we of course rejected their offer).

The foreclosure crisis on the Northside during the great recession was predominantly fueled by investors that included large/shady corporate buyers. One such group (TJ Waconia) actually concocted a mortgage fraud scheme involving purchasing/selling enough homes in the same neighborhoods that they were actually able to inflate local home values (https://www.justice.gov/archive/usao...sentenced.html).

So Zillow's recent experiment sucked for sure, but they were a late arrival to a party that's been here. I know there has been some advocacy with Mpls City Council for years to get them to regulate these types of transactions/ mass purchasing events (going back 2 different councils from the current)-- why they have not touched this issue which clearly impacts local affordability is beyond me.