Is this true?

[Ella]

I heard a rumor about Zillow buying up houses in certain areas as a company and then putting them back on the market as a way to fix the price of housing in said areas. They will drive up the prices and manipulate the costs in this process. I have never heard of such a thing so I am wondering if it is true or not. Has anyone ever heard of this? 

[Sophia]

I have never heard anything of the sort. Do you have any sources on this? I don't feel like this website could legally do this as a company without running into legal issues. I have heard of banks doing this but never a website like this. Is it bank owned?

[Mila]

Yeah I can't say I have ever heard of this either. The only way I could see this being possible is if a major bank owns Zillow and to the best of my knowledge some ex-Microsoft guy owns it with a partner he went in on it with. 

[James]

Zillow does have a program that buys houses off market. 

Now they of course are going to pay below market rates just like any investor strives to do. Then they dump money into the property and sell it at market value. Tons of companies and individuals do this all the time. 

The hard part is finding the sellers willing to part with their home at less then market value. They exist though because sometimes people need money fast or they just want to be out of a situation so someone else comes along and takes on the challenge. 

Since real estate markets are so local as a company buying up homes you need to focus on certain markets you know well. Markets you know will have strong job growth and a diverse group of employers. Zillow has a ton of data to understand the trends in the areas they choose to work in and they just execute on the strategy. 

I guess people can see this has bad but without house flippers neighborhoods would stay pretty trashy. You need someone that is willing to come along and lay down some money to bring something back to its former glory. It helps the entire neighborhood. 

The reason housing prices are so high is just due to lack of supply. Home builders no longer build smaller homes because there is not as much profit in them and the cycle continues. 

At some point people will finally decide its not worth it to live in expensive areas and they will all start moving to cheaper areas then those cheaper areas start to become expensive areas. 

If we want to start brining real estate values down (which the richest people make the rules why would they want to bring down the value of their investments) the United States needs to start making laws that limit foreign investment, and we they should make rules around raising capital to buy single family homes. Doing those two things will allow the smaller players to play and lessen overall demand which would drive prices back down. 

[Scarlett]

19 hours ago, James said:

Zillow does have a program that buys houses off market. 

Now they of course are going to pay below market rates just like any investor strives to do. Then they dump money into the property and sell it at market value. Tons of companies and individuals do this all the time. 

The hard part is finding the sellers willing to part with their home at less then market value. They exist though because sometimes people need money fast or they just want to be out of a situation so someone else comes along and takes on the challenge. 

Since real estate markets are so local as a company buying up homes you need to focus on certain markets you know well. Markets you know will have strong job growth and a diverse group of employers. Zillow has a ton of data to understand the trends in the areas they choose to work in and they just execute on the strategy. 

I guess people can see this has bad but without house flippers neighborhoods would stay pretty trashy. You need someone that is willing to come along and lay down some money to bring something back to its former glory. It helps the entire neighborhood. 

The reason housing prices are so high is just due to lack of supply. Home builders no longer build smaller homes because there is not as much profit in them and the cycle continues. 

At some point people will finally decide its not worth it to live in expensive areas and they will all start moving to cheaper areas then those cheaper areas start to become expensive areas. 

If we want to start brining real estate values down (which the richest people make the rules why would they want to bring down the value of their investments) the United States needs to start making laws that limit foreign investment, and we they should make rules around raising capital to buy single family homes. Doing those two things will allow the smaller players to play and lessen overall demand which would drive prices back down. 

Amen! So many people in other countries get involved and it screws millions out of affordable housing. My brother is working a good job and makes like 48k a year and his wife makes around 20k but they are struggled to find a good house in a good area. They are only seeing houses they can afford in unsafe areas where housing will always be cheaper because it is hard to sell them in places where crime rates are higher.