I think that "everyone else" actually made money from this. Zillow overpaid for houses and then was forced to sell them for the actual market value, so this $881M was basically free money given directly to the people Zillow bought from.

Likely some stressed out buyers paid for overpriced homes given the sharply rising prices across the market (although completely by their choice), and the sellers probably loved it - but that's already par for the course with the housing market at the moment. Zillow probably didn't help but isn't the sole contributor by any means.