Zillow Group Inc. said Monday it is pausing home purchases through the end of the year as it works through a backlog of inventory.
Shares of the Seattle-based online real estate marketplace tumbled by as much as 11% and were on track for their lowest close in 13 months.
|ZG||ZILLOW GROUP, INC.||59.43||+5.66||+10.53%|
"We're operating within a labor- and supply-constrained economy inside a competitive real estate market, especially in the construction, renovation and closing spaces," said Zillow Chief Operating Officer Jeremy Wacksman. "Pausing new contracts will enable us to focus on sellers already under contract with us and our current home inventory."
Zillow, through its Zillow Offers business, purchased a record 3,805 homes during the second quarter and sold 2,086 homes. The number of purchases was more than double the previous quarter, and boosted Zillow’s inventory to 3,142 homes.
Zillow Offers is a program that allows homeowners to sell their homes without having to fix up or show them. Zillow takes care of those projects and then lists the home for sale.
Zillow is set to report its third-quarter results on Nov. 4. The company is expected to report a loss of 12 cents per share on revenue of $2 billion.
Zillow shares were down 54% from their Feb. 16 peak through Friday. They had gained 767% from their March 2020 low through the February high.