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Zillow to become cash buyer of homes

Real estate platform Zillow on Thursday announced that it will become a cash buyer of homes in the Phoenix and Las Vegas markets, and a source says that it expects to hold between 300 and 1,000 residences on its balance sheet by the end of 2018.

Why it matters: This could become direct competition to upstart Opendoor, which reportedly is raising new funding at a $2 billion valuation. But for now it's a fairly limited trial, and expands on a pilot program for home-sellers that was launched last year in Las Vegas and Orlando.

Opendoor's response to the news:

Welcome, Zillow. Seriously. We are genuinely excited, having invented this new category in 2014, and it’s invigorating to see a host of others in the industry recognize the importance of removing hassle and time from the transaction. We are proud to have served over 15,000 customers, to be expanding to dozens of markets, and to be reaching market share numbers that demonstrate the significant demand and love for our experience and product. We continue to be focused on building technology to remove friction from the transaction through a world-class pricing model, a suite of vertically integrated applications, All-Day Open Houses, our Buyer Guarantee, and a few new products we will be launching shortly. Most importantly, we are here to service our customers, buyers and sellers who crave and deserve a best-in-class experience as they transition from one home to their next.

The story has been updated with a statement from Opendoor.