Logan Mohtashami on Zillow’s imploding iBuying business
Mohtahsami also discusses his recent HW+ article that claims despite the COVID-19 crisis, American household balance sheets look the best they have in years, meaning home prices may not decline for a while.
Here is a small preview of the interview, which has been lightly edited for length and clarity:
Sarah Wheeler: Yesterday, we got the announcement from Zillow, claiming they were stopping their AI buying program. You wrote a great piece for us last night and I would love to talk about that first.
Logan Mohtashami: Yes, the Zillow story isn’t too shocking as their stock price has been going down for some time and for months, there have been whispers that the company was overpaying. However, it must have been a really big shock to them about how much money they were losing on these purchases…The profit margin for house filliping has been falling for the last 11 years, so it seemed like they were really overpaying, especially as the nation experiences price growth. So, while it didn’t seem feasible, I assumed Zillow knew they were losing money. I think that’s the big story — If they were surprised this was
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