man explaining Zillow business model

@seangotcher/TikTok

Did this TikToker completely tank Zillow’s efforts to dominate the housing market?

The real estate listing service denies the viral video caused it to pause home purchases.

 

Mikael Thalen

Tech

Published Oct 19, 2021   Updated Oct 21, 2021, 9:30 am CDT

The online real estate marketplace company Zillow announced this week that it would temporarily stop purchasing homes as it attempts to work through a backlog of already acquired properties. But users online are convinced that the pause is actually due to a viral TikTok video.

While Zillow is best known for showcasing real estate listings online, the company began buying and selling homes en masse in 2018. In the second quarter of 2021 alone, according to Bloomberg, Zillow acquired more than 3,800 properties.

Despite the highly profitable venture, Zillow CEO Jeremy Wacksman revealed in a recent statement that the company would cease such purchases for the remainder of the year.

“We’re operating within a labor- and supply-constrained economy inside a competitive real estate market, especially in the construction, renovation, and closing spaces,” Wacksman said. “We have not been exempt from these market and capacity issues and we now have an operational backlog for renovations and closings.”

Yet many online believe that a TikTok video published one month prior on Sept. 14 is what actually led to Zillow’s decision.

In the video, which has been viewed more than 3.3 million times, Nevada-based real estate agent Sean Gotcher sarcastically outlines a hypothetical scenario in which a major company uses search data from its users to inflate home prices.

While Gotcher does not name the company he’s referring to, users in the comments repeatedly reference Zillow as matching the description.

When the news of Zillow’s decision broke, users across social media began pointing back to Gotcher’s video.

“Basically a TikTok user went viral for exposing how Zillow is screwing first time and young homebuyers out of the market by buying so many properties (by using their user data to predict all consumer behavior) in hot markets that they control pricing… and now it’s a problem,” @TMoorehead627 wrote.

https://twitter.com/IWriteAllDay_/status/1449857476518715393?s=20
https://twitter.com/mattbc/status/1449817273674440707

But in a recent statement to MarketWatch, a Zillow spokesperson dismissed the allegations as “misinformation.”

“The internet has empowered millions of consumers with more information, transparency, and tools in real estate to help them make smarter real estate decisions, many provided by Zillow for more than a decade,” a Zillow spokesperson said. “Unfortunately, the internet can also sometimes be a source of misinformation and falsehoods—as is this case.”

Gilles Duranton, a real-estate professor at the University of Pennsylvania’s Wharton School, also argued against some of the assertions made in the TikTok video.

“If you could rig the residential housing market that easily, the realtors would have done it long ago,” Duranton said.

Either way, Gotcher appears to be enjoying the attention he’s received. In a follow-up video, Gotcher jokes about causing the “drama” that led to Zillow’s purchasing moratorium.

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*First Published: Oct 19, 2021, 2:12 pm CDT