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

bloomberg.com

61–70 of 634 posts

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

#61
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…

> this appears to be an identical article

Check the authorship: "Bloomberg." This is a syndicated article, you can find the original here: https://archive.md/gND5q

After getting purchased by Condé Nast, ArsTechnica similarly began reprinting articles from sister publication Wired: https://arstechnica.com/author/wired-com/

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

#62
post #35
post #10

Earlier quoted context omitted.

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…

"But there's also the side of people wanting single family homes instead of apartment'

Most people who can't afford a home would not reject a decent apartment, they just want somewhere to live. Also those are not the only two choices, there are duplex and triplex homes, illegal in most of us, and other variations

https://youtu.be/CCOdQsZa15o

"Nothing wrong with people in a community wanting to set standards for their area."

So in this "democracy" people who don't own a house have no voice and no right? Why does this remind me of some other mechanism for opressing undesirables?

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

#63

Earlier quoted context omitted.

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…

But will they stay low for the next 30 years? Probably not. It's not a good idea to justify ones house buying decision with an all time low interest rate.

? No, it's a great idea if we are talking a standard fixed rate

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

#64

Earlier quoted context omitted.

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…

But will they stay low for the next 30 years? Probably not. It's not a good idea to justify ones house buying decision with an all time low interest rate.

In the US, fixed interest mortgage rates are sort of the standard. So, the decision to buy now based on interest rates is a keen driver of many buyers.

Source; I've refinanced three times based on rates going down. I dropped 10 years and 200/mo. off of my mortgage for the low, low price of $750 worth of appraisals.

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

#65

Earlier quoted context omitted.

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…

But will they stay low for the next 30 years? Probably not. It's not a good idea to justify ones house buying decision with an all time low interest rate.

..unless maybe the interest rate is fixed for the duration of the loan, which is frequently the case in the US..

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

#66
This is something like running a high end restaurant that is not easy to do or benefits from scale. You need a proprietor interested in it. Most people that "flip" homes successfully are personally involved in the projects. They have relationships with local subcontractors, know the area, and often professionally work in one of the trades or related fields such as law.

The world is awash with cheap money now, so simply having deep pockets is not going to get you what you want. You can't just buy people that have the skill to manage the people involved and the projects at a large scale.

The analogous restaurant situation is if you have a great chef that can run a location, why are they going to work for you? They will just open their own restaurant. Businesses where the only thing you can offer at scale is money don't work.

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

#67
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…

I disagree strongly with this sentiment. Clearly Zillow is not going to buy all the houses in America and turn us into serfs overnight - that is an absurd strawman. What? Zillow is far from the only actor here trying to enter this space. It's quite ridiculous to claim, as you are, that industrial-scale home speculation is doomed to fail since there are boom and bust cycles and therefore we don't need to worry. That's ridiculous. We really don't have any direct, past precedent for this type of situation. It is rational to be concerned here. The fact that Zillow failed on their initial attempt does not imply that this can't work - it just means they're one of the first making a serious attempt and, unsurprisingly, they got overzealous and it didn't work on the first try! Quant firms for the stock market in the early 90s did not work overnight even though the market was much more inefficient than it is now. It takes time for groups of highly qualified and very smart people to figure this stuff out - but, they will.

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

#68

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.

$400k seems very affordable. I could easily buy a house today if that’s what FHA-grade (i.e. something more than a burned out shack) housing went for. In my county the median house goes for over $1 million.

The median home price in Q3 2021 is $404,000.

That is shockingly high, but definitely not close to the 1 million figure.

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

#69
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…

You're right, but the difference these days is the Fed putting the pedal to the metal even when fiscal spending and economic data at all time records.

We haven't seen this phenomena since the 70s when inflation was running hot and the Fed did nothing for many years. Back then, prices continued to rise nominally for many years.

I suspect the Fed will tighten somewhat (taper should be announced tomorrow), but they keep stating that inflation is transitory.

So clearly their intention is to kick the can as far down the road as possible. If inflation does start to inflect downward, they have the perfect excuse to do nothing until it levels off at an elevated level many months later. Rents alone will drive elevated inflation for years to come. However, used car prices will certainly tank at some point which will mask the effect.

By moving so slowly, they seem to be facilitating the development of a new epic bubble, except it's a bubble in most asset classes. Stocks generally aren't too over valued, but hypergrowth is for sure. E.g. NET at 100x sales.

Compare to Cisco in the dotcom bubble, which peaked at something like 200 PE and much smaller sales multiple. The PEs back then are now the PSs. Kind of insane, even accounting for the greater legitimacy of the businesses today.

In the past the Fed used to preempt excesses and inflation. Anytime they haven't, has been a disaster in the long run, historically.

Unfortunately I think a lot of their action is motivated by Powell trying to retain his seat. They really need to either renominate him or put somebody else up for vote so he stops optimizing for the job. His term ends in Feb 22.

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

#70
This isn't surprising to me.

Early on in our home search we found a house that we loved, but was extremely overpriced—even in a hot market. The house was not owned by Zillow, but a similar company. When we asked for disclosures we did not receive them for almost a week.

My agent warned me that there were going to be things wrong with the house and that they probably would not be disclosed. I found a thread on reddit about making purchases from this company, and one user who was an agent said that they always asks for the previous seller's disclosures—that's how they know where to look with the inspectors. Apparently the company frequently hired handymen to do specialized work. They did the bare minimum to make sure the house passed inspection.

Anyways, we made what I thought was a reasonable offer, even though it was for about 10% less than the list price. It was rejected.

Three months later it sold for almost the same price as our offer. We probably dodged a bullet though.

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