(Bloomberg) — Zillow Group Inc. is pulling the plug on its tech-powered home-flipping operation, after an ambitious effort to transform the company collapsed when its vaunted pricing algorithms proved unequal to the task.

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The company plans to take writedowns of as much as $569 million and reduce its workforce by 25% as it winds down the business in coming months, according to a statement Tuesday. Zillow shares plunged as much as 11% to $76.22 in late trading.

The decision to abandon home flipping comes as the company’s third-quarter results showed it lost more than $380 million in the operation, called Zillow Offers. The business hit a major snag in recent months as Zillow tweaked its algorithms to make more aggressive offers, causing it to overpay for houses just as the heated U.S. market began to cool slightly.

With the company’s losses mounting, Chief Executive Officer Rich Barton said it had become too risky to scale the business in a U.S. housing market that has been running hot for well over a year during the pandemic.

“Fundamentally, we have been unable to predict future pricing of homes to a level of accuracy that makes this a makes a safe business to be in,” Barton said on an earnings call.

Read more: Zillow Selling 7,000 Homes After Halt in Flipping Operation

Seattle-based Zillow is the best-known real estate company in America. And for millions of owners who watched their home values surge during the pandemic, the company’s quick exit raises an uneasy question: Is the boom over? Barton emphasized instead that buying and selling thousands of homes every month required the company to put too much capital at risk.

Zillow has had a turbulent few weeks. On Oct. 18, it issued a statement confirming a Bloomberg News report that it wouldn’t make any new offers on houses for the rest of the year as it struggled to find workers to fix the homes it had under contract. In the weeks after, it became clear that the company had overpaid for properties and was taking bigger losses on sales.

On Monday there was another sign that something had gone wrong: Bloomberg reported that the company was marketing about 7,000 homes for roughly $2.8 billion to institutional investors.

For most of Zillow’s 15-year history, the company has been known for publishing online real estate listings and home-price estimates — called Zestimates — and seeking to profit by connecting agents with potential clients. In 2018, Barton, one of the company’s founders, reclaimed the role of CEO and pivoted into the high-tech home-flipping business, called iBuying.

Read more: Zillow Pauses Home Purchases as Snags Hit Tech-Powered Flipping

Zillow used pricing algorithms to buy homes from their owners, make light repairs, and put them back on the market. Barton set an ambitious goal, seeking to buy 5,000 homes a month by 2024.

Earlier this year, the company borrowed more than $1 billion through two bond offerings, making it the first iBuyer to tap the securitization market. It has also lined up $500 million credit facilities with Credit Suisse Group AG, Goldman Sachs Group Inc. and Citigroup Inc.

As recently as August, Barton was boasting about the popularity of the service, telling investors that the traditional way of selling a home was so “dreadful and dreaded” that customers were willing to bypass potential bidding wars to sell to Zillow “in this sizzling-hot sellers market.”

Zillow bought roughly 9,700 homes in the third quarter, due to what it called “higher-than-anticipated conversion rates.” It also booked a $304 million writedown on inventory owned at the end of the period “as a result of unintentionally purchasing homes at higher prices” than the company now thinks it can sell them for.

Zillow’s will continue selling house for at least a few months. The company expects to buy roughly 9,000 homes in the fourth quarter and said it will take a writedown of as much as $265 million on home purchases that will close in the final three months of the year.

It’s become clear that Zillow misjudged the housing market, making more aggressive offers just as competitors Opendoor Technologies Inc. and Offerpad Solutions Inc. were growing more cautious.

Opendoor, which went public last year through a merger with one of Chamath Palihapitiya’s blank-check companies, saw its shares drop 15% on Tuesday after the news that Zillow was selling 7,000 homes raised questions about the iBuyer business model.

The company it in a statement Tuesday it was “well-positioned to meet consumer demand.”

“We are open for business,” a spokesman for the company said.

Zillow’s decision to get out the business also raises questions for Barton, a serial entrepreneur who also founded Expedia Group Inc. and the careers site Glassdoor. He returned to the CEO job in 2018 because he wanted to lead the move into iBuying. For now, he’s sticking around as the company falls back on its old business of connecting homebuyers with agents.

“We believe there are better, broader, less risky, more brand-aligned ways of enabling all of our customers who want to move,” Barton wrote in a letter to investors. “We now plan to focus our offerings on asset- and capital-light solutions.”

(Updates with CEO quotes from earnings call and adds context throughout.)

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