In Nashville, companies and institutional investors are snapping up homes quicker than a person can view them.
Companies like Zillow are using algorithms to scan for houses that have 2.5 bathrooms, in a “good school district” and less than 20 years old all within minutes. If the house meets the criteria, the system puts in an offer, the jargon word for this is “i-buy.”
The company has announced it’s eliminating Zillow Offers. That’s its national program where Zillow buys, repairs and resells properties.
But Zillow and three other companies are only minor players, which is why the company is shutting down the operation all together.
So this isn’t a moment to sign in relief. The real players in Nashville are institutional investors in it for the long haul like American Homes 4 Rent and Amherst.
“Zillow is not a direct competitor of those companies mentioned above who are in it for the long-run,” Tennessee State University Associate Professor Ken Chilton tells WPLN News via email. “However, i-buyers are just another potential buyer. As such, they increase demand for a finite supply of housing.”
He says two decades ago, local buyers were knocking up against a few local flippers. Now it’s Wall Street and private equity firms making cash offers and can close in two weeks.
Zillow will finish purchasing the homes currently under contract. Right now, they own less than 80 homes according to the property assessor’s website.
The office of Nashville’s mayor says they don’t have a policy response and the administration can’t elaborate without having a market study. However, spokeswoman Andrea Fanta says, “Metro’s focus is on creating resources to preserve and build affordable units and on planning policies and practices that lend themselves to affordable housing development.”