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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

#81

Post by jdhn »

SN76477 wrote: post #77

I hope this bubble bursts. In less than 3 years the rent in our working class city went up 45%. Not to mention the absurd qualifications one needs to rent. 4 times the income to rent, very good credit and background checks. This is not sustainable for working class people.

>Not to mention the absurd qualifications one needs to rent.

This was probably prompted by the Covid rent restrictions. Landlords (especially smaller ones) don't want to rent to someone who can avoid paying rent due to government decrees.

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

#82

Post by sjg007 »

judge2020 wrote: post #47
arthurcolle wrote: post #40

Earlier quoted context omitted.

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

As someone selling to Zillow, they do retain a certain amount ($x thousands) from the seller for repairs and cleaning, at least for relatively new construction. I imagine it's a larger number depending on how old the house is and how much repair they think they need based on their appraisal/final walkthrough.

You can also just refuse their offer too if they want to take too much off the top.

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

#83

Post by treis »

johnnyApplePRNG wrote: post #24

How on earth did a real estate analytics company lose money buying and selling homes in THIS market?

Market has slowed a bit in the last few months. Not "prices are dropping" but not "prices will be 10% higher in 6 months" anymore. The margin for error has narrowed.

But selling for more than they paid isn't the idea. The goal is to capture the ~10% of purchase price that is paid out in fees for a real estate transaction.

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

#84

Post by disgruntledphd2 »

specialp wrote: post #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 simp…

> Businesses where the only thing you can offer at scale is money don't work.

Except for banks and VC's I guess.

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

#85

Post by secondaryacct »

drnonsense42 wrote: post #67
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…

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…

Let them buy overpriced useless houses, if they buy too many we'll vote them out or we'll take the homes back by force.

Everything is a balance and the only way to make money long term is to be undeniably useful to a majority of people.

Anything below that bar will die down in shame, infamy or violence.

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

#86

Post by seanmcdirmid »

harryh wrote: post #75
whimsicalism wrote: post #32

Earlier quoted context omitted.

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

Decades of under-building due to restrictive zoning laws will do that.

Do you have numbers to back that up? If anything, underbuilding came from a moribund housing market after 2008, as many left the industry and it took way too long to ramp up on talent when housing began to boom again (a lack of people skilled in building houses is still a problem).

But I doubt this is an under building problem at all. Look at Seattle and the area, and there isn’t a shortage of new housing projects at all. They are mostly all luxury, which is the only way builders can make a profit on high land prices, and they sell very quickly regardless.

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

#87

Post by xyzelement »

SN76477 wrote: post #77

I hope this bubble bursts. In less than 3 years the rent in our working class city went up 45%. Not to mention the absurd qualifications one needs to rent. 4 times the income to rent, very good credit and background checks. This is not sustainable for working class people.

> In less than 3 years the rent in our working class city went up 45%.

I sympathize with that but I want to make sure people understand the dynamics. Prices are driven by supply and demand. If there's only one empty apartment in the city and you're willing to pay $2000/month, I am gonna have to pay $2100 month if I want to live there instead of you. That's sort of separate (though related to) prices of houses.

What will make rents go down? Only two things: demand goes down, meaning people aren't looking to move into / are moving out of the city. This happened in NYC rents in early covid as everyone bailed out. So one way to drive prices in your city down is to have some even that renders it undesirable (COVID, defund the police, rising crime, suburbs more attractive with work from home, etc.) The other way is to increase supply - that is to build more housing. Counterintuitively, this happens more when prices are high because it compels builders to create more housing stock.

People in NYC love to complain about all the new construction going on (or at least that was going on in the last few decades) but imagine what rents would have been without that.

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

#88

Post by shane_b »

altacc wrote: post #43
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…

I wouldn't be too quick to claim that the myth of institutional house buying has been dispelled. Zillow isn't the only company out there buying real estate, and they are planning to sell most of the properties to other institutions and landlords, not the open market of owner occupiers. It appears they made some errors in their calculations and temporarily bought too many houses at too high a price but the article say…

I would guess supply chain costs and delays reduced their speed of renovation unexpectedly and they can’t carry the cost of sitting on the property during that wait time. So to your point, it’s likely temporary based on unexpected renovation constraints.

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

#89

Post by orangepurple »

djrogers wrote: post #21
wayoutthere wrote: post #8

Earlier quoted context omitted.

There is plenty of idle money in the investment world that needs places to go, unfortunately. Homebuyers are still being priced out by institutional investors looking to be long-term landlords. The market consensus right now is that inflation is here to stay for the next decade and bond prices aren’t adjusting accordingly, so there’s a flood of cash into all asset classes to try to hedge.

> Homebuyers are still being priced out by institutional investors looking to be long-term landlords. There’s really no evidence that this is the cause of any of the housing bubble. Sure, it makes a good twitter thread, but institutional investors make up a tiny percentage (1%ish) of single family rentals… [1] https://www.vox.com/22524829/wall-street-housing-market-blac...

Yet for some reason we are always being outbid by them

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

#90

Post by brendoelfrendo »

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.)

Can I ask why? I'm also looking to buy a house and the Zillow offerings, from what I've seen, are not particularly competitive. They don't seem to care much about the quality of their housing stock. I'd also be leery of dealing with someone removed from the initial seller. It sounds like a great way to "launder" issues with the home where Zillow can say "eh, we didn't know about that."
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