Open Door and Zillow “miscalculated” (so they say) the rehab market and began hemorrhaging money on those deals. I don’t understand why they thought they could sweep in and corner the rehab market when the numbers clearly showed that they’d break even at best. I ran some numbers and studied this phenomenon when they first started doing it and it simply didn’t make sense to me. So, now they’re out.
I look at real estate in much the same way as I look at the notary business. Everyone getting in seems to think they’ll make a lot of money because there’s just soooo many houses. Newbies everywhere, trying all kinds of schemes and methods to out-do everyone else. Look at that dopey “Ideal Agent” TV ad for example. LISTEN closely to what the guy says. . .“A 2% commission”. “Our System”, “Excellent Agents”, Excellent Service". What the heck is new or special about any of the things he’s offering??? What “system”.
Look, my wife is an experienced and in-demand realtor and she provides all those things without being in Ideal Agent’s “system”. The guy hawking that pap is full of a bunch of nuthin’. And, I promise you, Ideal Agent will be gone before too long. Just like “Purple Bricks” - remember them???
This is just a time of weeding out all the poseurs in the real estate business. The market is tight with not a lot of inventory because, although people may want to sell their homes and move, unless they move to another state, there’s nowhere to go. They can’t take their tax base with them and they’ve invested in their existing home so much, that it’s sometimes hard to leave their area. More mature homeowners may be nearing payoff after 30 years of a mortgage and they’re thinking, do I really want to leave when we’re about to NOT have a house payment anymore?
No, friends, there’s no trend lurking out there. It’s simply the market shifting and old marketing ploys that have played out. Only the strong survive.