Benzinga | Oct 17, 2021 04:44PM EDT

Zillow Halts Home Puchasing Program For The Rest Of The Year Due To Backlog

After buying more than 3,800 homes in the second quarter, Zillow Group Inc (NASDAQ:Z) has announced that it will make no further purchases for the rest of the year, according to a report from Bloomberg.

What Happened: Zillow is primarily known for its online real estate listings. In 2018, the company launched Zillow Offers, a program which gives homeowners the opportunity to request an offer on their house from Zillow. The company then uses algorithms to generate a price. If an owner accepts, Zillow purchases the property, makes any necessary repairs and sells the home.

A shortage of workers to repair the purchased properties has caused a slowdown in the iBuying process. After a home is purchased, the company makes upgrades such as replacing the carpet and repainting the interior.

"We are beyond operational capacity in our Zillow Offers business and are not taking on additional contracts to purchase homes at this time," a spokesperson for Zillow said in an email. "We continue to process the purchase of homes from sellers who are already under contract, as quickly as possible."

What's Next: This isn't the first time the company has paused its Zillow Offers program, the same step was taken during the early days of the pandemic. After halting for several months, Zillow once again began purchasing homes.

Zillow says stopping the acquisition process will allow the company to work through the backlog of homes already under contract. During this period the company will be referring homeowners looking to sell their property to local real estate agents.

Related Link: One-Third Of Pending Home Sales Go Under Contract Within A Week: Report

Photo: Courtesy of zillow.mediaroom.com