“Who is intimidated by a stuffed Dobermann?”
I told you in July of 2019 why this must be so: A retailer without a discount rack must discount all the goods in lockstep, ultimately creating a market-wide slashscade. Zillow is at least stanching its exsanguination. The other big iBuyers still have their noses wide open.
Nothing will save them when the market turns: The insuperable pitfall in flipping is owning the property for too long. The carrying costs already eat up every other iBuyer inflow, and this will only get worse when prices decline and Days-on-Market surges.
But here’s a way around the discount rack problem, at least: Do as they do with cars and guitars: Rebrand. For example, if OfferPad – voted the iBuyer most likely to master arithmetic someday – has an overpriced turkey it needs to unload, it could relist it with its alter-ego brokerage, MakeItGoAway.com. They’ll still be losing money on every sale, but the big loser won’t be pulling down all the mini-losers.
All of this is stupid, of course. There is no business here, other than the business of gulling Wall Street investors. If they’re happy, god help ’em, but I see zero evidence that Wall Street-funded tech ventures have made any difference to the real estate business at all. Zillow put the freebie supermarket magazines out of business, but life in the trenches goes on as before.
Am I mistaken?
In other news:
Brad Polumbo: St. Paul Just Implemented the Nation’s Strictest Rent Control Law. It’s Already Backfiring Tremendously.
Andrea Widburg: Kyle Rittenhouse’s attorneys allege that the prosecution hid evidence.
City Journal: Cold Comfort: Mayor Lori Lightfoot’s appeals to “systemic racism” don’t do much for Chicagoans in high-crime neighborhoods.
Steven Malanga: Free-Speech Entrepreneurs: Growing tech censorship continues to spark rapid gains at alternative platforms.
Daniel Greenfield: Democrats are Destroying Public Schools. Republicans Should Help Them.
Michael Walsh: COVID Panic Will Only End Through Civil Disobedience and Mockery.
