Zillow Group Inc. shares down 11% to $84.42 Monday after the company said that due to a backlog in renovations and operational capacity constraints, its Zillow Offers business won’t sign any new, additional contracts to buy homes through the end of the year.
The real-estate company said pausing new contracts will enable Zillow Offers to focus operations on purchasing homes with already-signed contracts, but have yet to close, reducing its renovation pipeline.
Zillow said it will continue to market and sell homes through Zillow Offers during this period.
The company said labor and supply issues have affected the real estate market, especially in the construction, renovation and closing spaces, leading to an operational backlog for renovations and closings.
Zillow Offers is a service to homeowners to sell without having to coordinate repairs or host open houses or showings. After buying a home, Zillow prepares it for sale by doing the same type of projects a typical seller would, then lists it on the open market.