Overnight News: The secret to Zillow’s flavor of iBuying? Sucking at real estate helps them sucker real estate agents – which is where the real money is.

I wrote the other day about Zillow’s losses on its iBuyer “investments” – incomprehensible losses considering that this is one of the few times when it is possible to make money on non-producing real estate.

The losses on iBuyer “investments” can be stupefying from the point of view of any real estate agent, investor or house-flipper: You should be able to show a profit in any market, since making a profit is the goal, the point and the bright-line go/no-go signal on how to proceed.

And this is what is different about Zillow as an iBuyer, as distinguished from OpenDoor and OfferPad: As long as Zillow can sell its web traffic and its fallouts to gullible suckers, iBuying is lead-gen and can be carried as a loss-leader. Witness: Zillow concedes that it lost $30K per “investment” and it still showed a profit for the first quarter – all credit to the sucker-bilking business it claims to disdain.

Zillow got into iBuying because OpenDoor was getting in front of it in the lead stream. It is now in a position to crush OpenDoor and OfferPad: There is no practical upper bound on what Zillow can offer – since they can happily lose money on every “investment” – with more-typical flippers having only the transactions themselves as income streams.

This is beyond crazy – my objection all along. Cinemas show movies to sell popcorn, candy and sodas – the profit centers. Car dealers sell ugly loans, offering pretty cars as the incentive. And Zillow sells easy-peasy tract homes very slowly and very badly as a way of trawling useless agents into paying 35% at COE for well-worked “leads.”

If you think that sounds a lot sleazier than the supermarket real estate magazines Zillow replaced, I expect there’s a good deal of sleaze in Zillow we know nothing about. I’m pretty sure there’s a lot about real estate they don’t know, so we’ll bespy more failures of their snickering guile as the market turns.

In other news:

Richard Florida, Joel Kotkin: America’s Post-Pandemic Geography: Covid-19 is transforming all types of communities, from big cities to suburbs to rural areas. Lions and lambs? Richard Florida is the highly-regarded idiot who infested North American cities with empty conventions centers, even emptier ‘performance centres’ and empty-except-for-the-homeless trolley systems. Joel Kotkin is the Siren of the suburbs. I’m not sure either will do well at predicting urban humanity’s future.

Monica Showalter: California Fleeing: Democrats delude themselves about why their state is losing people.

Bethany Mandel: The great American birth dearth has arrived.

Joy Pullman: Lack Of Money Isn’t The Reason Our Culture Hates Children.