Zillow, Redfin Forced To Defend Themselves After TikToker Accuses Them Of Jacking Housing Prices
In recent months, the housing crisis in America has been one of the myriad issues rumbling at the periphery of social media, but a recent TikTok by Las Vegas realtor Sean Gotcher has brought it front and center after he laid out an alarming theory about the shady business practices of iBuyer sites like Zillow and Redfin.
In Gotcher's TikTok, he lays out how an unnamed company could use the data of browsers to jack up housing prices in an area. In Gotcher's hypothetical, the company sees that buyers look at an area where homes cost $300,000, and what prices those buyers could actually afford. The company then buys 30 homes for $300k, but they then buy the 31st home for $340,000. This brings the value of the other 30 homes up, which they then flip at $340,000, turning a $1.2 million profit. Consequentially, real estate prices go up, and buyers are priced out of areas they could conceivably afford because of this shady practice by iBuyer sites.
iBuyers like Zillow have indeed been intentionally amassing inventory, as Vice reported in August. But as Gotcher's TikTok racked up 2 million views on that platform and additional millions on Twitter, the iBuyers stepped in to do some damage control.
Zillow gave a statement to Inman attempting to correct Gotcher's TikTok.
In a statement emailed to Inman Wednesday, the company characterized the video as an example of “misinformation and falsehoods.” The statement continued, saying “the simple truth is that through our services and tools, home shoppers have more power than ever before at their fingertips when buying, selling or renting their home because of the information we make available to them.”
“We pay market value for every home we purchase,” the statement added. “When we looked at homes that sold traditionally after they declined a Zillow Offer, we learned that on average, those selling traditionally sold for only .09 percent more than the Zillow Offer. And on every home that Zillow buys and sells, we are transparent: the purchase and re-sale prices are publicly displayed on the property page on Zillow.com.”
Redfin CEO Glenn Kelman also responded to the video's first Twitter repost with a six-tweet clarification of his company's business practices.
Despite the company's insistence that they were not doing anything untoward, many Twitter users responded to Gotcher's video by noting they had been seeing the type of price-fixing he laid out in their own areas.