Fleeing To Florida, Flipping Houses And Voter Roles

Zillow is getting out of the unpredictable business of flipping homes. Meanwhile, Florida just flipped, with more registered Republicans.

— Steve’s Marketplace —

Editor’s note: Contributing columnist, Steve Nicklas, expresses his views and insight on various topics in Marketplace.

Florida just flipped. Meanwhile, Zillow has stopped flipping. Talk about random flipflops. 

The state’s flip occurred within its voter rolls. Republicans reportedly outnumber Democrats for the first time in Florida. 

Meanwhile, Zillow, the prominent real-estate company, has altered its dual role as a purchaser – and subsequent seller – of single-family homes. In other words, Zillow is getting out of the unpredictable business of flipping homes by closing its internet-based Zillow Offers division. 

And Zillow took a big financial loss for its fallen flips. Thus, the precarious world of flips and flops. 

Some flips can even be monumental. Just ask Joe Gruters, the chairman of the Republican Party of Florida. “It’s absolutely a monumental day,” Gruters said last week. “Basically it’s a landmark day for Florida. It’s the first time in state history there are more registered Republicans than registered Democrats.” 

Just 10 years ago, Democrats had 535,000 more registered voters than Republicans in Florida. The lead has steadily dwindled since then – to 134,000 last year. Gruters credits the Republican leadership, especially Gov. Ron DeSantis. 

Florida’s population is growing by 1,000 people a day (through legal migration, that is). Many of these newcomers are fleeing Democrat-controlled states that have restrictive political, economic and Covid-19 policies. “I think the governor and his policies set the tone,” Gruters said. 

DeSantis also trumpeted the climactic day. “Welcome to the freest state in the United States,” he said last week at a legislative summit in Tampa. “What you’ve seen in terms of some of this migration to our state, it’s about much more than just taxes. 

“I think it’s fleeing the restrictions, I think it’s fleeing the lawlessness and the crime and many other things,” DeSantis continued. “We’re proud of that.”  

State Democrats are disputing the Republicans’ claims. Democrats claim they still have a 24,000-vote advantage. The numbers the Republicans are celebrating are for October; these will be officially released next month. In total, there are more than 5 million voters in each of the major parties in Florida. 

With the influx of newcomers, it stands to reason why the real estate market is as hot as the sun in Florida. The steady demand for new and existing homes is remarkable, and tireless. But there are more than individual buyers. 

Hedge funds as well as internet-centric companies like Zillow have gotten into the act. They have been regular buyers of existing homes around Nassau County and the state. However, Zillow’s exit from the market may raise a caution flag. 

Cathie Wood, the head of the trendy financial firm Ark Invest, sees Zillow’s withdrawal as a particular concern, according to CNBC. Wood has become quite popular as a money manager, particularly in the technology space. When Wood talks, people listen, and act.

Over the past month, Zillow has laid off one-fourth of its workforce after realizing millions in losses from its home buying/selling foray. When the real estate market began to cool in the summer, Zillow’s algorithms apparently didn’t notice.  

“What happened is they ended up buying a lot of houses — and overpaying for a lot of those houses — because they didn’t see those brake lights,” said Mike DelPrete, a real estate technology expert. “They didn’t see the market start to cool.”  

Zillow Offers was buying and selling thousands of houses a month, not only in Florida but also in other hot markets. While the company will no longer buy houses, it still owns thousands of them in its inventory. It will reportedly sell those houses as it winds down Zillow Offers.  

So these houses could flood the market in some places. And the artificially manufactured demand created by Zillow will disappear. These counter forces could cause some housing markets to suffer, maybe even flipflop. 

_____ Steve Nicklas is a financial adviser with a regional brokerage firm who lives and works on Amelia Island. He is also an award-winning columnist. His columns also regularly appear in several weekly newspapers in North Florida, and on his website at SteveNicklasMarketplace.com. He has published a book, “All About Money,” of his favorite columns from the past 20 years. The book is available on Amazon. He can be reached at 904-753-0236 or at [email protected]