Since I mentioned Zillow’s attempt to use big data to profit on house flipping recently, here is an article on that.

The United States is in the midst of the biggest house price boom ever. The Case-Shiller National Home Price Index was up nearly 20% in the 12 months ended in August, the biggest one-year increase in the history of that index.

Yet one of the biggest real estate brands in the world has seen its stock fall nearly 70% since mid-February. Zillow has gotten hammered after bungling its iBuyer program just three short years after getting into the house-flipping business. The company announced it is shuttering the platform, selling the rest of its housing inventory, and laying off up 25% of its staff.

awealthofcommonsense.com

The housing market has huge inefficiencies, huge transactions costs, and is somewhat corrupt. The algorithms apparently couldn’t account for those factors. The only silver lining is that when you have a big chunk of wealth sunk in the family home, you typically don’t experience huge swings in value on a regular basis.