Zillow is trying to offload about $ 2.8 billion worth of homes to investors after buying them with the intention of selling them to promising homeowners and homeowners, according to a report by Bloomberg. This follows another Bloomberg report that the real estate navigation website had to stop buying homes when it found itself with excess inventory after the company told investors it planned to step up its turnaround activity.

On Tuesday, Zillow announced in his earnings report that he was ending the practice altogether and estimated that he would lose more than half a billion dollars in value on the homes he owns. He also announced he would lay off around a quarter of his employees and said he had underestimated how unpredictable the housing market was.

Some readers may be surprised that Zillow buys and sells homes, rather than just serving as a place for realtors to post ads – I was too when I first heard about it, but the company does. done for years thanks to his Zillow. Offer program. According to his site, the idea is for Zillow to buy your house in cash, greatly streamlining the process. He will then take care of any quick repairs or renovations and then sell the house itself. It’s not the only one with this business model either – competing real estate site Redfin has a similar program, and there are entire companies dedicated to buying homes on the internet, like OpenDoor.

In August, a Vice The article detailed what he described as an “arms race” among tech companies trying to buy as much real estate as possible as house prices exploded across the country. According to the report, Zillow bet big, telling investors that he plans to buy thousands of homes throughout 2021 and turn his Homes division into a billion dollar business.

However, at the end of the insanely hot summer, it looked like Zillow’s Deals business was cooling down as well. Bloomberg, however, speculated that this could also be driven by excess inventory and reported that Zillow appeared to be selling quite a few homes at a loss instead of a profit.

Now according to Bloomberg, Zillow is seeking to get rid of approximately 7,000 of the homes he has purchased. Unfortunately, it doesn’t look like individual house hunters can benefit from Zillow’s issues – Bloomberg reports that the company is trying to sell the homes to “institutional investors” (read: Wall Street-type businesses) for $ 2.8 billion. For those potential buyers who have been turned down due to a seemingly endless supply of cash buyers, it can feel like a slap in the face. However, it does not appear that the mad rush of the housing market is entirely due to investment bankers.

A report of Vox cites research that found investors only made up about 20% of the home buying market in 2020, and Zillow says he and his competitors made up about 1% of the housing market in the second quarter of 2021. In some ways, these numbers are both terrifying and reassuring – a fifth of the housing market is a massive and influential share, but it also means it probably wasn’t a private equity firm (or Zillow) that outbid you on the house of your dreams.

It’s hard to say what will happen to this sale and how it will affect Zillow’s house flip plans going forward. However, that probably won’t stop conspiracy theories that Zillow is pushing prices up on purpose, and if I have a hint, it won’t reassure hopes at home about their chances of finding a place to live. Maybe that’s just another data point for the argument that finances are a meme now and betting big doesn’t mean you’ll get what you hope for.

Update November 2 at 7:15 p.m. ET: Added information about Zillow ending its offer program.