Zillow seeks to sell 7k homes for $2.8B after flipping halt • Hacker News Board

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

#151

Post by HWR_14 » Tue, Nov 02, 2021, 3:24 PM UTC

faet wrote: post #96

seanmcdirmid wrote: post #86

Earlier quoted context omitted.

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…

https://www.forbes.com/sites/graisondangor/2021/06/16/the-ho... The U.S. built on average 276,000 fewer homes per year between 2001 and 2020 compared to the period between 1968 and 2000, according to the report which was covered earlier by the Wall Street Journal. Had building continued at the same pace, there would be 5.5 million more units of housing, the report estimated. To make up the shortage, the NAR report sa…

So you compared a 32-year period with a couple of technical recessions and one relatively brief stagflation period averaged over huge growth with an 18-year period dominated by the Great Recession?

Would it be interesting to point out that the US population growth also was much higher in the 1968-2000 period compared to 2001-2020 period on an annual basis?

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

#152

Post by wil421 » Tue, Nov 02, 2021, 3:25 PM UTC

rdudek wrote: post #113

They seem to be flipping the houses fast and hard around my neighborhood. One of my favorite things to do is walk around with the dog and see houses go up for sale. Lately, I noticed houses sold only to be relisted by Zillow like 30 days later at $50k+ the original price. And they actually seem to be able to sell them that high. My house is currently worth 3x what I paid for it back in summer of 2013.

I found it the opposite. Zillow and OpenDoor bought really weird houses that were either unsightly or had issues and they were unable to sell them. They probably flipped a lot but most of the ones I noticed sat for almost a year unsold. I was shocked at how they would be able to pay mortgages for 10-12 months and sell below what they bought it for.

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

#153

Post by ashtonkem » Tue, Nov 02, 2021, 3:25 PM UTC

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.

And continuously rising construction costs. Parking minimums are under-discussed here, as the apartment block I used to live in in Los Angeles was probably more underground car park than apartment if you looked at the balance sheet. And yet the parking lot was never more than 20% full.

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

#154

Post by tablespoon » Tue, Nov 02, 2021, 3:25 PM UTC

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…

> 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.

I think you're making a significant error there: the narrative you're criticizing wasn't focused exclusively on Zillow, but rather "big investors" buying up single family homes and pushing actual single families out of that market. This news does nothing to repudiate that narrative, from the OP:

> The company is seeking roughly $2.8 billion for the houses, which are being pitched to institutional investors, according to people familiar with the matter. Zillow will likely sell the properties to a multitude of buyers rather than packaging them in a single transaction, said the people, who asked not to be named because the matter is private.

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

#155

Post by _huayra_ » Tue, Nov 02, 2021, 3:25 PM UTC

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.

Is there a dearth of skilled labor for building houses?

As a "youth", I don't have any insight into this as I'm a renter for the foreseeable future, but my parents' and their friends complain about how difficult it is to get anybody to do any sort of construction / home upgrades, e.g. my parents putting in a heat pump.

Given how much the "you're a loser if you don't go to college" narrative has propelled people who may have been happy and skilled at carpentry, plumbing, electrical work, etc, into soulless corporate jobs, this seems like something that the US could take a page out of Germany or Switzerland's book, i.e. much more emphasis on non-uni career tracks starting in high school.

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

#156

Post by HWR_14 » Tue, Nov 02, 2021, 3:25 PM UTC

Kalium wrote: post #56

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…

> The schadenfreude is real for me seeing this. A company like Zillow getting into flipping seems questionable to me. The customers are no longer aligned with the company on goals with something like this. It's like when the realtor offers to buy your house... they obviously feel like they can make more than you, when they're supposed to represent you! I've personally dealt with selling real estate within the past ca…

Where do you live that it takes "months upon months" to close a sale? Usually the complaint is that the market moves so fast people have to make risky snap purchasing decisions.

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

#157

Post by deelowe » Tue, Nov 02, 2021, 3:27 PM UTC

ineedasername wrote: post #30

Sounds like they got in too close to the peak (not to mention delays & increased costs in refurb) and didn't factor increased carrying costs on the potential that these would sit on the market a bit longer if they wanted to sell at a higher premium. A hard lesson for them that listing aggregation & analysis of the market is far different than direct investments & flipping. Flippers take a big risk and offset inevitab…

I think there's more going on here than simply RE speculation. Most importantly, Zillow is building capability. Capability to buy & sell quickly through processes, tooling, networking, and brand recognition. There is a long play here. Zillow's goal has always been to fully disrupt the real estate market. Why should this stop with brokerages and agents? Shouldn't investors also be on the list?

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

#158

Post by unethical_ban » Tue, Nov 02, 2021, 3:29 PM UTC

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…

Like the other responder, I don't think the 00s and this cycle have much to do with each other. 00s was lots of people who couldn't afford a home being provided mortgages by banks, and it falling.

This is presumably a number of well-financed institutions buying up property to hold or rent.

Now, perhaps you're correct that it isn't as bad as it seemed, since Zillow is selling the homes rather than getting into the rental business, but even the header of the article says they are seeking "institutional investors".

I also agree that cities should be for those who live in them, and that land is a different type of asset from most others (again, like another responder mentioned).

The more I type the more I think we're on the same page, but you seem to think everyone is focused "just on Zillow" while I am thinking more about the long-term opportunities for trillion-dollar megafunds to gain a monopoly on living space and destroying the ability of families to own property in America's cities.

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

#159

Post by ineedasername » Tue, Nov 02, 2021, 3:29 PM UTC

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'm not so sure: At current rates, assuming excellent credit, that's about $1700/month. If you're anywhere near the suburbs of a city, you can add another $500 to $1500/month in property taxes, and sometimes another $100 to $400/month in HOA fees. on that for a total pre-utility rate of ~$2400-$3600/month or roughly $30k to $43/ year.

I live in the higher end of that range even though I'm in a modest home in a lower-middle class town, in an area where the median household income is about $50k. before taxes.

$400k on a house is simply impossible for many millennials, especially those born towards the end of the millennial generation that haven't had more time to establish themselves and work up the salary scale a bit.

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

#160

Post by UncleMeat » Tue, Nov 02, 2021, 3:30 PM UTC

jackorange wrote: post #118

whimsicalism wrote: post #114

Earlier quoted context omitted.

My ideal is for real housing prices to remain somewhat steady - ie. I don't like that I have to pay much more than inflation to get a house compared to what my parents pay. It'd be nice to be able to afford a house where I grew up without having to tie a ridiculous amount of my net worth up in this one very pricey illiquid asset, even if I could get the mortgage.

If you can accept technology changes over time (goodbye horse and carriage), and that society changes over time (hello LGBTQI rights), why is it unreasonable to accept the price you pay for goods will change? Naturally, its a given that's not the only change. The materials to build have changed, transporting them has changed, wages have changed. Prices are not going to be the same.

This is backwards. If society gets more expensive because we no longer oppress certain groups in the same ways, then it should have been the case that people from these groups were the ones getting cheap housing in the past since they were “buying” a shitty social experience.

But that’s not the case. It was straight white families who got cheap housing while at the same time holding minorities back.