Zillow didn't like what the models were telling them to do, so they "turned up the dials".
On Q2 earnings call they said:
"We've been testing price elasticity in this hot housing market and we saw rapid conversion gains throughout the quarter as we improved our offer strength"
On Q2 earnings call they said:
"We've been testing price elasticity in this hot housing market and we saw rapid conversion gains throughout the quarter as we improved our offer strength"
"The employees' accounts suggested that Zillow's iBuying problems had less to do with a glitch in its computer-driven, algorithmic approach to purchasing homes or unpredictable swings in prices and more to do with the overexuberance of human managers" businessinsider.com/zillow-insider…
"leadership wanted to be aggressive on acquisitions and incentivized all teams to err on the side of growth, which manifested in system overrides."
https://twitter.com/playtypuscap/status/1458470148856336388
"Zillow put together a plan to speed up pace and volume of home purchases, dubbing it Project Ketchup. Zillow planned to buy more homes by spending more money, offering prices well above what its algorithm and analysts picked as market value, people familiar with the matter said"
"Staffers grew concerned Zillow was paying too much... Analysts whose job it was to confirm the prices of homes found that they were routinely overruled, those people said, because the company had retooled the system to raise the analysts’ suggested prices."
Zillow Offers tick tock confirming what we knew. It was a conscious decision by management to override their pricing algorithms in order to buy more homes.
wsj.com/articles/zillo…
wsj.com/articles/zillo…
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