What Happens When Algorithms Get Into the Home Flipping Business

When we say the words “house flipper,” do you picture a yard sign jammed into the grass next to a freeway entrance that says something like “$$$$ We Buy Ugly Houses for Cash $$$$”? If one of the US’s biggest real estate companies has its way, you might have a different association soon.

In a recent Bloomberg Businessweek article, “Zillow Wants to Flip Your House,” writer Patrick Clark explores real estate database Zillow’s unconventional decision to get into the home-buying game themselves. That’s right: the site where you spend countless hours pettily judging how much your third cousin spent on her condo might be renovating a run-down bungalow near you soon. And they’ll be using the massive power of their data (and, of course, a super-secret algorithm or two) to do it.

What are the implications of big tech literally buying and selling our neighborhoods? Is Zillow poised to be a top-down monster-buyer who uses low-ball offers to snap up whole blocks, or is their business model a fragile mess that will probably fall apart on its own? Is an impersonal algorithm that sees that cute little ranch next door as nothing more than a set of numbers on a screen really any worse than a local sleazeball who’ll buy it for a song and let it crumble until it’s time to cash in?

Strong Towns president Chuck Marohn is back this week to talk through these and more questions with host Kea Wilson. Then in the downzone, the two talk about what they’ve been binging to get through the winter: the TV series Justified for Chuck, and the podcast Believed for Kea.