|
The
company, through its Zillow Offers unit, buys homes from
homeowners and performs light repairs on them, requiring the
services of inspectors and contractors. It then lists the homes
for sale on its platform.
Zillow shares fell as much as 11.4% to $93.54 in early trading,
their lowest since September 2020.
The U.S. housing sector that earlier witnessed a boom has lost
its momentum in recent months, hurt by a tight jobs market,
supply chain issues and shortage of raw materials.
That has sent property rates soaring, with the median U.S. house
price in August up nearly 15% from a year earlier.
"We believe Zillow's decision might be affected by slowing homes
sales and the company's inability to sell through at the same
rate at which it is acquiring, as buyers take a step back", BofA
Securities said in a note.
Zillow, which operates the popular home valuation model 'Zestimates',
said it would clear a backlog of properties on its platform. The
company bought 3,805 homes in the second quarter.
Analysts, however, said Zillow's move might open the door to
rivals such as Opendoor Technologies Inc to grab market share.
Opendoor can gain a significant share if it just generally
operates more efficiently, Wedbush analyst Ygal Arounian said in
a note.
The company, which went public through a merger with a
blank-check firm led by venture investor Chamath Palihapitiya
last year, bought 8,494 homes in the second quarter.
Opendoor shares were up 2.6% in afternoon trade, while Zillow
shares were down 8.5%.
(Reporting by Nathan Gomes in Bengaluru; Editing by Ramakrishnan
M.)
[© 2021 Thomson Reuters. All rights
reserved.] Copyright 2021 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|
