Zillow has seen its share price tumble after the the online real estate firm said it would stop purchasing new homes and work to clear a backlog of properties it already has on its books.

The Seattle-based company, which acquired more than 3,800 homes during the second quarter of this year, has seen its stock price fall by about 27% this year after it nearly tripled in 2020 amid the pandemic-fuelled housing market boom.

The shares have come under additional pressure in recent weeks after a viral TikTok video from a real estate agent in Las Vegas said an unnamed company was pulling off a convoluted scheme to manipulate housing prices in his home market.

Zillow is also facing increased competition from firms like Opendoor Technologies Inc., which announced in August that it bought about 8,500 homes during the second quarter.

Opinion piece: Will UK portals follow the Zillow model and start buying and flipping homes?