Opinion: Zillow thought it could rule the housing market. It was very wrong.

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Zillow Group had a wealth of data, access to millions of dollars in capital and executives with the hubris to believe they could use these tools to outsmart both a volatile housing market and startups specializing in buying and selling houses.

They failed, and lost more than half a billion dollars in the process.

Zillow
Z,
-10.24%

ZG,
-11.52%

said it will permanently exit the so-called iBuying business Tuesday, after going on an unprecedented home-buying spree that saw the internet-based real-estate-services company buy more than 14,000 homes in just six months. Only after that spree did Zillow executives realize that they had overspent, and were sitting on massive losses in the months to come.

The result is more than $550 million in combined losses for the third and fourth quarters, and the dissolution of a business that had been rapidly growing — the layoffs will…

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