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

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

#121

Post by rel2thr »

bedhead wrote: post #57

The business of iBuying is destined for the trash heap, its future so seemingly inevitable that I'm shocked anyone alive considers this a viable business with a real terminal value. Did we not learn real fast back in 08 that the financialization of people's homes is basically a non-starter? Being a glorified payday lender with people's homes is never going anywhere. It's one big Catch 22, if these companies ever even…

i think it can work , but you need to expect pretty slim margins. You basically need to offer a very fair price on very safe houses and make your margins by cutting out the realtors fees.

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

#122

Post by browningstreet »

jackorange wrote: post #106
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.

I think this is a fallacy perpetuated by unrealistic ideals. I bought a house for 175K at 24. I only make 50K a year. I don't have a college degree. Lot of people saying buying houses is hard, unrealistic, or impractical want to buy mansions with a 10 second commute to their workplace in silicon valley but the reality is most people are not living like that. Wage workers are still buying houses no problem in what are…

Where?

Three years ago, I could've bought a house at 60% of current market rate now in my town of 700K. I wasn't in a position to buy that house (under median) then, and I don't want to buy it now given market conditions. The other issue is that the median housing price in my city is now above the FHA limit for this area... so no 10% down mortgages. Again, that wasn't the case 3 years ago.

I also need to replace my lease vehicle next year, so there are two challenging life purchase decisions pending at the moment, and market/global conditions are putting pressure on both.

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

#123

Post by WarOnPrivacy »

duped wrote: post #98
harryh wrote: post #75

Earlier quoted context omitted.

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

Not everywhere is California

It's true that all the other markets with severe housing shortages are not California.

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

#124

Post by dghlsakjg »

seanmcdirmid wrote: post #86
harryh wrote: post #75

Earlier quoted context omitted.

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…

You can make a rough comparison by looking at housing starts in Japan[1] vs USA[2] housing starts. Housing cost in Japan has been flat even in major metros like Tokyo. They also build 2-3x as many houses over the long term according to the data cited.

Seattle is a weird example for me (anecdotally). When I lived there in 2017-18 I found the rental market to be great. The city had incentivized building rental units and as a result there were great deals to be had. I was able to negotiate a 15% discount and dictate the length of my lease on Capitol Hill. I don't know what it looks like now, but it was great at the time.

1. https://fred.stlouisfed.org/series/WSCNDW01JPA489S

2. https://fred.stlouisfed.org/series/WSCNDW01USA470S

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

#126

Post by valeness »

r3trohack3r wrote: post #46
valeness wrote: post #28

Earlier quoted context omitted.

But didn't they sell the houses to investors and/or established landlords? I'm not sure how this helps the youth or those otherwise disillusioned with the current housing market as that housing is still unavailable to them.

I think the ops point is that it will end, not that it has ended.

Yes, but this is not evidence of "it will end" to me.

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

#127

Post by drnonsense42 »

cletus wrote: post #97
drnonsense42 wrote: post #67

Earlier quoted context omitted.

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…

> We really don't have any direct, past precedent for this type of situation Yeah, we do. Massive housing speculation in the mid-2000s. > The fact that Zillow failed on their initial attempt does not imply that this can't work I'm reminded of Gamestop here. Around the time $GME first spiked and then fell you saw lots of people trying to encourage everyone to hold. What this ignored is that someone would be left holdi…

Real estate speculation has likely been around for thousands of years; it’s certainly not new. But, do you see any difference between A. individuals in the mid-2000s speculating on real estate based on individual whims and taking out mortgages they should not and B. large corporations with access to massive datasets previously unavailable, teams of PhDs trained to work on this, equipped with game-changing modeling capabilities that were computationally infeasible until the past decade, along with access to massive amounts of capital? In my opinion, the former case seems less of a concern than the latter.

Also, maybe I’m dense but I’m not able to see any relevancy to GME at all.

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

#128

Post by ISL »

short12 wrote: post #120
ISL wrote: post #53

Earlier quoted context omitted.

As I understand things, Zillow's approach wasn't a corner, but rather an attempt at arbitrage/value-creation. They were pretty sure they had an edge at price-estimation and had enough capital to be able to simultaneously offer sellers execution speed and offer buyers a price they would accept. It is a market-making play. My impression here is that Zillow has re-evaluated some part of that calculus and decided to pull…

>They were pretty sure they had an edge at price-estimation If they actually thought that they must have been high af Their tool is absolutely terrible

I'm pretty sure that their internal dataset is far more rich/detailed than the public-facing "Zestimate".

Traffic-data alone, segmenting the buyers clicking on each listing and their expressions of intent, would give them an incredibly-actionable trading/training signal.

Zillow might see, nationally, the nationwide (and regional) direction of buyer and seller sentiment 2-4 weeks ahead of all but the largest regional brokerages.

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

#129

Post by ct0 »

gizdan wrote: post #38
PragmaticPulp wrote: post #20

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…

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

But 5% is better than 20% down. Most have the capacity to save but choose not to.

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

#130

Post by Loughla »

ineedasername wrote: post #109
Loughla wrote: post #64

Earlier quoted context omitted.

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.

I dropped 10 years and 200/mo. off of my mortgage Roughly the same here, and I had a very low mortgage from a small line of credit. Between sticker price on a house and interest rates, prices tend to equalize-- people can always only afford $X/month, regardless of the proportion going to interest. This means that, all else being equal. the most fortunate time to buy is when slightly higher % rates have kept sticker p…

That is 100% my experience. We bought when interest was still relatively high compared to today (5-7% I think). Prices for homes were still being suppressed by the crash of 2008. Then the whole world went to pot and interest bottomed out for a decade. It just kept going down.

I realize how fortunate we are. Timing is literally everything.

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