In November 2021, Zillow announced it was shutting down Zillow Offers, the division it built to buy houses directly from homeowners using its pricing algorithm. The shutdown came with a write-down of more than $540 million and layoffs of about 2,000 people, a quarter of the company. By the time the books closed on 2021, the homes division had lost $881 million for the year. In the final quarter alone, Zillow lost an average of about $25,000 on every home it sold.
A year later, almost to the day, Redfin followed. On November 9, 2022, CEO Glenn Kelman told employees the company was closing RedfinNow and laying off 862 people. His explanation was blunt: "iBuying is a staggering amount of money and risk," and Redfin had tied up hundreds of millions of dollars in houses it no longer wanted to own.
These weren't small experiments. They were two of the biggest names in real estate, with billions in capital and some of the best data science teams in the industry. Both walked away.
What they were trying to do
The model was called iBuying: a homeowner enters their address online, an algorithm estimates the value, and a cash offer arrives within a day or two. The company then does light cosmetic work, usually paint and carpet, and relists the house.
On paper it looked like the future. In practice, the algorithm was the weak point. Zillow CEO Rich Barton admitted as much when the company pulled out, saying "the unpredictability in forecasting home prices far exceeds what we anticipated." The Zestimate could get close on a typical tract home in a stable market. It could not see a cracked slab, an unpermitted addition, a bad floor plan, or a street that locals know to avoid. When the market cooled in late 2021, Zillow was still paying peak prices for homes it would have to sell into a softer market.
Volume made it worse. To justify the investment, these companies had to buy thousands of homes a month across dozens of cities. That meant buying almost everything the algorithm approved, including deals no experienced local investor would touch. A Stanford Graduate School of Business analysis of the collapse pointed to exactly this: speed and scale were the whole model, and both worked against careful buying.
Opendoor, the one large iBuyer still standing, has never reported a profitable year and lost $1.3 billion in 2025. It's now targeting breakeven by the end of 2026. Even the survivor is still trying to prove the math works.
Why we didn't quit
We've been buying homes in Santa Clarita and the San Fernando Valley for over 20 years. We were doing it before the tech companies arrived and we're doing it now that they've left, and the reason is simple: we never bought the way they did.
We walk every property. A person from our team stands in the house, looks at the foundation, the roof, the layout, the permits, and the block it sits on. That's the information an algorithm can't collect, and it's usually the information that decides whether a deal works.
We only buy deals that make sense. Nobody at our company has a quota that forces us to buy thousands of homes a month. If a house doesn't pencil, we pass. That discipline is why we're still answering the same phone number 20 years in.
And when we renovate, we renovate right. The iBuyers were built for paint-and-carpet flips. We take on the houses that need real work, which are exactly the houses they were never able to handle.
What this means if you're selling
If you own a home in Santa Clarita or the Valley that needs work, or you just want a fast, certain sale without repairs, showings, or cleanup, you don't need an app. You need a local buyer with cash who has been through every market since the early 2000s. We make real offers on real walkthroughs, you pick the closing date, and you deal with our team, not a call center.
Agents: this applies to you too. We close fast, we don't retrade, and we protect your commission. If you have an as-is listing or an escrow that's falling apart, bring it to us.
Call us or send us the address. No obligation, no algorithm.
Sources
- CNN Business, "Zillow to exit its home buying business and cut 25% of staff" (Nov 2, 2021) — https://www.cnn.com/2021/11/02/homes/zillow-exit-ibuying-home-business
- CNBC, "Zillow says it's closing homebuying business, cutting 25% of workforce" (Nov 2, 2021) — https://www.cnbc.com/2021/11/02/zillow-shares-plunge-after-announcing-it-will-close-home-buying-business.html
- Wall Street Journal via Florida Realtors, Zillow Offers lost $881M in 2021; ~$25,000 average loss per home in Q4 (Feb 10, 2022) — https://re-brokerage.com/zillow-offers-lost-881m-in-2021-shutdown/
- Stanford Graduate School of Business, "Flip Flop: Why Zillow's Algorithmic Home Buying Venture Imploded" (Dec 9, 2021) — https://www.gsb.stanford.edu/insights/flip-flop-why-zillows-algorithmic-home-buying-venture-imploded
- Redfin, Glenn Kelman's all-hands email on the November 2022 layoff and RedfinNow closure (Nov 9, 2022) — https://www.redfin.com/news/november-layoff/
- GeekWire, "Redfin to cut 13% of workforce and shut down home-flipping business RedfinNow" (Nov 9, 2022) — https://www.geekwire.com/2022/redfin-to-cut-13-of-workforce-and-shut-down-home-flipping-business-redfinnow/
- Real Estate News, "Opendoor targeting profitability by end of 2026" (Aug 5, 2026) — https://www.realestatenews.com/2026/08/05/opendoor-targeting-profitability-by-end-of-2026
- IndexBox, Opendoor reported a $1.3B net loss for 2025 (Mar 14, 2026) — https://www.indexbox.io/blog/opendoor-stock-downtrend-continues-amid-market-challenges/
