In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche
I think America’s imbecilic faith in real estate’s ability to keep its value drives Zillow’s share price. However, Zillow’s own data shows this faith is naïve and stupid. If home sales can fall by 60%, then home prices could fall by 60%.
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Moreover, flipping could increase Zillow’s operating expenses beyond what it can afford. To explain, Zillow will have to pay the property taxes on all those homes and pay to maintain them if they do not sell. In addition, Zillow could have the expense of renting out all the homes it cannot unload.
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