Labor and supply shortages prompt Zillow to stop buying homes until 2021: NPR
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Real estate website Zillow has announced that it will stop buying and renovating homes until the end of the year as it faces a backlog of properties and deals with labor and labor shortages. ‘supply.
âWe operate in an economy limited by labor and supply within a competitive real estate market, particularly in the construction, renovation and closure of spaces,â said Jeremy Wacksman, director of Zillow’s operation, in a statement.
âWe have not been exempt from these market and capacity issues and we now have an operational backlog for renovations and closures,â he added.
Through its Zillow offers program, the company buys homes directly from sellers, makes necessary upgrades and puts them up for sale. This allows sellers to avoid having to make repairs or arrange tours themselves, according to the company.
Zillow, known for its online real estate listings, told shareholders it purchased 3,805 homes through the program in the second quarter of this year, a significant increase from previous years.
Zillow Offers, launched in 2019, sold 2,086 homes and grossed $ 71 million over the same period.
The company said Monday that it will not sign any new home purchase contracts by the end of 2021. Zillow said it will continue to market and sell homes through the program and will also continue to buy houses with contracts already concluded. signed but not yet closed.
The construction industry has been one of many to be hit hard by the COVID-19 pandemic, which has seen the cost of building materials skyrocket. Meanwhile, the demand for housing – as well as its prices – have increased.
While the astronomical prices of wood have fallen from their recent highs, other materials like steel and piping remain expensive or scarce. On top of that, there is a serious shortage of construction workers.
Both new home construction and building permit approvals declined in September from the previous month, according to the US Census Bureau.
In an interview with Marlet Last month, Associated Builders and Contractors economist Anirban Basu said the coronavirus was still causing problems in the housing industry. âThe spread of the delta variant globally has increased supply chain problems, it means higher prices for inputs, it increases the cost of providing construction services,â Basu said.