The real estate company Zillow announced it’s throwing in the towel on a program in which it bought, renovated and resold homes itself.
The iBuying, or instant buying, service called Zillow Offers had recently been bogged down by a backlog of renovations and closings caused by labor and supply shortages in the U.S. housing market.
The company disclosed Tuesday that it lost about $304 million in the third quarter from the program, after purchasing homes at higher prices than it now expects to sell them at. It bought 9,680 homes in the third quarter but sold only 3,032, the company told investors.
“We’ve determined the unpredictability in forecasting home prices far exceeds what we anticipated and continuing to scale Zillow Offers would result in too much earnings and balance-sheet volatility,” Rich Barton, Zillow Group’s co-founder and CEO, said in a statement.