The 18K homes Zillow owns or will own under its cancelled iBuyer program will be sold, though the WSJ says many may be sold directly to single-family rental firms.
NEW YORK – Homes owned or under contract to Zillow Offers, which announced it would stop operating as an iBuyer business, will add about 18,000 listings to the market – 9,800 currently owned by Zillow and 8,200 it has under contract.
However, it’s unclear how many of those homes will make it into MLSs and be offered to current homebuyers.
Major investment firms may purchase the properties Zillow Group is preparing to sell as it disbands its home-flipping business. Few of these investment firms plan to make a fast profit on a quick flip; most want to acquire them and expand the inventory of single-family homes that they rent out to families.
Wall Street Journal sources say Pretium Partners, American Homes 4 Rent and Invitation Homes are considering bidding on some properties, or they’re talking to Zillow about buying some of its inventory.
An earnings statement indicated that Zillow’s homes are worth approximately $3.8 billion, and it eventually will need to divest. Large-scale, single-family home rental companies see the homes as attractive because they’re concentrated in Florida, California and Texas – markets that renters find appealing. With home prices floating near highs, many families see rental housing as their best option to live in a coveted suburban neighborhood with good schools.
Wall Street Journal sources say Pretium Partners, which has about 70,000 single-family rental units, is in advanced negotiations with Zillow about buying some homes.
Source: Wall Street Journal (11/05/12) Parker, Will
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