Hi readers
Some companies/people never learn.
Early 2021 a company by the name of Zillow in the US bought up to $7 billion dollars worth of homes around the United States. For the Australian readers Zillow is like a realestate.com portal.
Zillow with there AI data was able to see what home buyers where looking at and in which suburbs, the type of homes and in which states.
So the idea was they buy the homes do them up and then sell them off at a higher price, in theory.
Well renovations to these homes cost a lot more due to material shortages, trades men cost more due to Covid and all of a sudden the profits didn't stack up.
They got the media spinners going say housing shortages and prices are exploding and just like that they thought they cornered the market?
US buyers are not dumb ass Australian home buyers running to the bank of mum and dad and telling them to put there house up as security so they can buy there own home.
US home buyers simply couldn't pay these prices and walked away from the market. (this is June)
September comes along and Zillow has to start making payments on the $7 billion loan it got from Bank of America. Start of October Evergrande issues have started and everyone is looking at China yet Zillow starts putting the properties it bought at the start of the year for sale lower than what they bought them at to dumb there inventory.
The houses which got a small $20k makeover got put on the market at cost and no buyer.
Last week of October and Zillow was selling homes at $40k under cost from February no makeover and still no buyers.
Homes which got an $75k makeover sold for the prices they got bought at in February, but those without the makeover are still on there books. Current losses are already mounting to $400 million and rising, so another sub prime ? maybe worse stock prices in June was at $125 and is currently $95.It won't surprise me if the stock runs to $50 or lower.
Hard to valuate the losses until the homes are sold, but repayments are due and money ain't coming in, beware cap raises or bond issues.
As always use the above as an indicator to your own research.
The above is based on Astrological aspects and is not Financial advise.
Please seek out your own financial advise on the above .
I am a financial astrologer
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