Business

Zillow may have helped drive up Triangle real estate prices, but its decision to exit could lead to deals

Posted November 3, 2021 4:58 p.m. EDT
Updated November 4, 2021 11:14 a.m. EDT

Zillow is trying to sell hundreds of homes it owns across the Triangle as the company gets out of the instant home buying, or iBuying, business.

The online real estate marketplace cited "unpredictability" in forecasting prices for its decision to halt iBuying.

WRAL News searched online property records and found Zillow listed as the owner of 211 homes in Wake County, 62 in Durham County, 41 in Johnston County and 10 in Orange County.

Zillow has been buying and selling homes in the Triangle for three years, and some in the real estate industry say the company has helped drive up home prices by routinely flipping homes days after buying them – sometimes for tens of thousands of dollars over what it paid.

"There has been a number of homes, probably the vast majority of them, that have been a bit overpriced," Raleigh realtor Steve Gunter said.

Jeff Simerson sold his three-bedroom, three-bathroom home south of Garner to Zillow a month ago for $563,000, and the site now lists the property for $578,900.

"Everybody kind of looked at me funny when I said I sold my house to Zillow. They were like, 'I didn’t know they were in real estate.' I didn’t, either," Simerson said.

He said his family needed to sell quickly to relocate to Florida, and Zillow made a cash offer $37,000 over his asking price.

"We just couldn’t understand where they were coming up with that number, because the comps in the area didn’t support the value they were offering me," he said. "If I was going to still stay in Raleigh, I would have moved down the street to sell it for what they were offering us."

Two other big iBuyers, Opendoor and Offerpad, own more than 400 homes combined in the Triangle, and a third, Redfin, recently announced plans to enter the market.

"They’re going to need to be very careful about how many homes they’re buying per month and where they are selling those homes from a price standpoint," Gunter said.

Zillow officials said the homes it owns or is under contract to buy in the area will go through the company's typical process to get them ready to list and sell.

But Gunter is telling his clients they could get a deal as Zillow winds down its sales operations.

"Whenever we have buyers looking to place offers in on those properties, we’ve just told them we’re going to need to offer less," he said. "They are beginning to sell those homes for less than what they have paid for."

Simerson said he's glad he closed on the sale to Zillow when he did.

"If they buy it inflated in the first place," he said, "they’re going to drop the price to what the market will sustain."

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