Zillow's real estate speculation plan failed, and many buyers took advantage of the price cut. (World Journal Reporter Li Xue/Photography)

In recent months, Zillow, an online real estate company, has failed to use an artificial intelligence system to "house flipping", selling thousands of houses at low prices in many parts of the United States, including hundreds of houses in Los Angeles and Orange County. In the real estate market where buyer competition is so fierce today, there are lucky Chinese buyers who have "picked up" and bought Zillow's low-priced homes.

Ms. Mai decided to buy a house in Irvine at the end of 2021 due to factors such as career development and children's schooling. However, in the Irvine housing market, competition is fierce, and the experience of house inspections is horrible. Ms. Mai said that her budget had to go from $850,000 to $900,000, and then to $950,000, but found that it was impossible to buy suitable independent houses in Irvine, and all houses had to be purchased at a higher price. For example, for a two-bedroom house listed for $870,000, there were 33 offers in less than a week, and the last $960,000 was sold in cash. Ms. Mai didn't even have the opportunity to bid.

Ms. Mai said: "The more I look at the house, the more frustrated I am." At that time, after understanding Ms. Mai's budget, an agent kindly "persuaded her to leave" and said that she would wait for a while.

Things turned around on the Sunday afternoon when Ms. Mai was euphemistically persuaded by the broker. That day, while she was walking in the nearby park, accidentally she saw a nearby independent house on the Internet with a price tag of $928,000. She came to this house with the attitude of giving it a try.

Ms. Mai came to the door and found that there was a sign "Zillow owned property" at the door. Only then did she know that it was the house Zillow was selling. Fortunately, a man in a suit happened to open the door at this time. After inquiring, it turned out that this man was the real estate agent. After understanding Ms. Mai’s intentions, the agent agreed to show Ms. Mai the house. After looking at it, Ms. Mai was very satisfied and asked whether it was possible to buy the house at the asking price of $950,000. She did not expect that the broker responded very positively, saying that it should be okay.

According to Spectrum News, Zillow used artificial intelligence systems to "turn over houses" and purchased more than 13,000 houses in the past two quarters and sold about 3,000 houses in recent months, including more than 120 in Los Angeles County and Orange County. According to the "California Regional Multiple Listing Service", a real estate agent query system, as of November 30, 2021, there are still 135 Zillow houses for sale in Los Angeles, Orange, and San Diego counties.

Ms. Mai said that generally houses are listed for sale on Wednesdays and Thursdays, but Zillow’s houses are generally sold on Sundays. And the real estate agent is not very active in showing buyers, as long as the price is about the same, they will sell. She said that later she saw another Zillow house in Irvine, and the final transaction price was sold at the same price as the original price without any increase.

It is reported that online real estate companies have relatively low commissions to brokers, causing brokers to not be interested in introducing buyers, making Zillow often unable to sell when it is refurbished and listed for sale.

After buying a house for renovation, put it on the market and sell it, which is called "renovation." Some websites estimate that Zillow has lost $300 million in this wave of buying high and selling low. Zillow announced not long ago that it would withdraw from the home refurbishment business. The company stated that its algorithm and model for fast buying and selling of houses failed to work as planned. Due to the failure of real estate speculation, nearly half of the houses bought earlier were sold at a price cut.

(Source: Compiled from on line information)

Wu Chengyuan, a lecturer in the International Course of the National Real Estate Association, analyzed that people often rely on Zillow's house appraisal when looking at a house, but Zillow's appraisal is often inaccurate and requires real estate agents to re-evaluate. He believes that during the epidemic, the cost of decoration materials and labor increased, causing Zillow's capital chain to break, which may have led to this wave of low-priced housing sales operations. But Zillow is not a big player in the real estate market after all, and this batch of sold houses will not change the shortage of house inventory and the booming real estate market.