Hello and welcome. This is Nolan Formalarie with Discover NC Homes and Nolan’s News and as always, thank you for listening. Today I wanted to talk about Zillow.
Zillow and Trulia are owned by the same company and they are literally the most searched real estate website, period, point blank, Amen out there. Realtor.com is a close second, but Zillow is the most searched out there.
A very interesting news: earlier this month, Zillow announced that they are going to drop their home flipping business. Zillow uses an algorithm and we’re not quite sure how it works, but they have been using an algorithm to come up with with what their value of your home is, and that’s called their Zestimate.
So they were going around in various marketplaces, several all over the country and they were using this algorithm purchasing homes and then holding onto them for a few months and later flipping them. They did very well in some markets. In some markets, they did very poorly, but they announced earlier this month that they lost $380 million doing this.
So that is a huge hit for a company like this. Because of this, they claim in the article I read that they are going to lay off 25% of their employees.
In my opinion, this was a very bad mistake, but I think, and this is just my opinion, I think that where they went wrong was that they tried to apply this algorithm across the country.
Real estate is very localized, it’s very centralized, it’s so different, even from Brunswick County to New Hanover County. So an algorithm they’re trying to apply across the nation is just not going to work. We’ve seen that with what they’ve done: $380 million loss and they’re going to unfortunately lay off 25% of their employees.
So I would just say, rely on your local expert. We know our local markets! I’m in Brunswick County, in New Hanover county – I can’t go to the Triangle Area, Raleigh or Charlotte and come up with a value on a house because, again, it’s a localized geographical thing.
So we love Zillow, a hard lesson learned, but they are now as of the date the article came out, the 11th of this month, November, they are dropping their home flipping business.
As always, thank you for having me. If you want the link to the article, we’ll send it to you and we’ll talk to you soon.
Source/Article: https://www.newsobserver.com/news/business/article255583276.html
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About Nolan Formalarie
Nolan Formalarie has been in the North Carolina Real Estate Industry for over 8 years and enjoys every minute of it. He is involved in every aspect of the industry including selling and purchasing residential property, home watch services, property management, association management and construction.
