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Zillow seeks to sell 7k homes for $2.8B after flipping halt

bloomberg.com

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Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#31

Post by JumpCrisscross »

axxl wrote: post #4

I can't read the original article, but this appears to be an identical article at least from the start: https://www.eastbaytimes.com/2021/11/02/zillow-to-sell-7000-... I don't know which is the original and which is the copy. Edit: It seems like they are both sites owned by the same company? But one has a more aggressive paywall? I don't know. The schadenfreude is real for me seeing this. A company like Zillow gettin…

> Zillow getting into flipping seems questionable to me. The customers are no longer aligned with the company on goals with something like this

I'm currently looking to buy a house. Having a Zillow in between the seller and myself (as a dealer, not a broker) wouldn't be a slam dunk, but it would be worth some non-zero premium to me. (Just offering a counterpoint to the "uselessly driving up prices" narrative.)

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#32

Post by whimsicalism »

cletus wrote: post #15

This is a good example of the fallacy of youth: buying too far into hype and being all "the sky is falling" with negative news. It wasn't long ago that we were reading how Zillow et al were going to buy up all the housing stock and keep millenials and Zoomers homeless forever. The people saying this have obviously never gone through a "bust" cycle. This is unsurprising as we've now been in the longest bull market in…

Sorry, youth here. The housing market remains screwed regardless of the actions of Zillow or Blackstone or whomever.

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#33

Post by PragmaticPulp »

On one hand I’m relieved to see that this business model isn’t working out. I didn’t want to see institutional players start putting even more upward pressure on home prices.

On the other hand, this highlights just how insignificant their purchasing was. 7000 homes is nothing relative to the 1,200,000 homes they have listed for sale right now.

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#34

Post by hncurious »

woah wrote: post #12
wayoutthere wrote: post #6

Turns out that mass flipping houses doesn’t work when you can’t hire contractors to do the work for a price that makes your budget assumptions hold. I am disappointed that they’re looking to offload them to institutional investors rather than individuals. Housing should probably not be an investment vehicle, but here we are.

We're on the tail end of 50 years of policy to make single family homes into a perpetually growing investment vehicle to finance baby boomer's retirements.

I hope you're right, but what signs do you see that it's at the tail end? Home ownership rate is at 65%. They want their home value to keep increasing and I don't see evidence of millennials being any less self interested when the rubber meets the road.

https://www.statista.com/statistics/184902/homeownership-rat...

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#35

Post by giantg2 »

zip1234 wrote: post #10
api wrote: post #3

Best news I've seen all month. I hope anyone doing this kind of thing with residential real estate falls hard.

They are not the problem with residential real estate prices. The real problem is people that prevent additional housing from being built.

"The real problem is people that prevent additional housing from being built."

If you go deeper, it's about personal preferences and distribution of jobs. There are plenty of areas that allow houses to be built and have affordable houses. Many of those places may have limited job choices, although remote is becoming bigger. If companies didn't cluster as much, then overpopulation or constrained resources in specific areas wouldn't be as much of problem. But there's also the side of people wanting single family homes instead of apartments - both existing owners and many prospective buyers.

It seems some companies and individuals are realizing this and moving to areas with lower density and lower cost of living (or cost of business).

Sure, you could take the other way of removing many zoning regulations, but the regulations are the product of democracy. Nothing wrong with people in a community wanting to set standards for their area.

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#36

Post by ClumsyPilot »

ashtonkem wrote: post #23

There was a lot of fear a few months ago that Zillow was manipulating the housing market to make a profit using all their data and cash. Guess they had the will, but not the capability.

I guess they were bad in more then one way

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#37

Post by whimsicalism »

PragmaticPulp wrote: post #20
ineedasername wrote: post #7

Earlier quoted context omitted.

Unfortunately, at an average price of about $400,000 most of them are not going to be affordable for a typical young first-time buyer.

Not really. Mortgage rates are so low that even with only 5% down the monthly mortgage payments on a $400K house are similar to what someone would be paying for monthly rent in these cities. Mortgage rates are incredibly low and there are a number of options to reduce down payment requirements right now. Meanwhile, wages are up and better paying jobs are more common for young people. $400K isn’t out of reach at all f…

I doubt they are $400k in the city.

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#38

Post by gizdan »

PragmaticPulp wrote: post #20
ineedasername wrote: post #7

Earlier quoted context omitted.

Unfortunately, at an average price of about $400,000 most of them are not going to be affordable for a typical young first-time buyer.

Not really. Mortgage rates are so low that even with only 5% down the monthly mortgage payments on a $400K house are similar to what someone would be paying for monthly rent in these cities. Mortgage rates are incredibly low and there are a number of options to reduce down payment requirements right now. Meanwhile, wages are up and better paying jobs are more common for young people. $400K isn’t out of reach at all f…

5% is still $20k. When you're living payslip to payslip, even $5k is too much as a deposit is too much.

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#39

Post by ineedasername »

cletus wrote: post #15

This is a good example of the fallacy of youth: buying too far into hype and being all "the sky is falling" with negative news. It wasn't long ago that we were reading how Zillow et al were going to buy up all the housing stock and keep millenials and Zoomers homeless forever. The people saying this have obviously never gone through a "bust" cycle. This is unsurprising as we've now been in the longest bull market in…

being all "the sky is falling" with negative news

I don't read it that way. My guess is that they 1) didn't believe that prices would level off a bit, as they have in the last couple of months 2) didn't factor in significant delays & increased costs for even minor refurbs and 3) as a result realized that any profits would be eaten by carrying costs (property taxes, maintenance, opportunity cost of having capital stagnate).

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#40

Post by arthurcolle »

JumpCrisscross wrote: post #31
axxl wrote: post #4

I can't read the original article, but this appears to be an identical article at least from the start: https://www.eastbaytimes.com/2021/11/02/zillow-to-sell-7000-... I don't know which is the original and which is the copy. Edit: It seems like they are both sites owned by the same company? But one has a more aggressive paywall? I don't know. The schadenfreude is real for me seeing this. A company like Zillow gettin…

> Zillow getting into flipping seems questionable to me. The customers are no longer aligned with the company on goals with something like this I'm currently looking to buy a house. Having a Zillow in between the seller and myself (as a dealer, not a broker) wouldn't be a slam dunk, but it would be worth some non-zero premium to me. (Just offering a counterpoint to the "uselessly driving up prices" narrative.)

Not only that (it's true though) but what if they committed to a certain $ figure of upgrades/renovations for the house in question? Seems valuable in terms of property values even if it costs the seller/buyer some additional premium up front
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