Zillow Stops Flipping Houses

jialiu28gmailcomPosted by

Zillow to stop flipping homes for good as it stands to lose more than $550 million, will lay off a quarter of staff

Many of my clients ask about the z-estimate. I always explain to them Zillow used a logistic model to value houses. Modeling is different from the real world. I provide my broker opinions for house valuation by giving a range of so-called market acceptable price levels and I cannot predict which exact number the house ends up with. I also tell my sellers or buyers that they have to have an open mind and be ready to adjust to the market / competitors at any time. I ever worked on a research project on Prediction of Exchange Rates in Latin American Countries when I was a researcher in the International Monetary Fund. I applied the logistic model. I only remember my predictions stayed on paper forever. (logistic models: Breckbaldwin on Logistic Regression)

As an economics student, I indeed have no say over prediction either. I can discuss with you what factors I think are going to push the real estate market upwards and what factors are there to press downward. You tell which force will dominate. More important, the key function of the real estate is to consume (your home) and to preserve value (investment) in the long run. If your purpose of investing and holding a real property is not these two, I recommend you go for other options. 


Want to have some fun with economists who are predicting our economy, click here

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.