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Bloomberg: Home-Flipper Opendoor Hit With Losses in Echo of Zillow Collapse


From Bloomberg: Home-Flipper Opendoor Hit With Losses in Echo of Zillow Collapse excerpt: The company, which sells thousands of homes in a typical month, lost money on 42% of its transactions in August, according to research from YipitData. Opendoor’s performance — as measured by the prices at which it bought and sold properties — was even worse in key markets such as Los Angeles, where the company lost money on 55% of sales, and Phoenix, where the share was 76%.

A representative for Opendoor declined to comment on the figures, which don’t include fees charged to customers or expenses incurred in renovating and marketing homes. Opendoor’s rocky summer is reminiscent of the pricing problems that doomed Zillow Group Inc.’s iBuying business last year, according to a research note from Mike DelPrete, a scholar-in-residence at the University of Colorado Boulder. That doesn’t mean Opendoor is going to shut down the business, but it demonstrates the depth of the losses — and September is likely to be even worse than August, DelPrete’s analysis shows. “Opendoor’s metrics are in the danger zone,” DelPrete said in an interview. “They are very close to where Zillow was in its worst moments.”

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