How on earth did a real estate analytics company lose money buying and selling homes in THIS market?
The plan was to buy homes, renovate them and flip them. Renovations are taking longer and are more expensive than planned.
Zillow seeks to sell 7k homes for $2.8B after flipping halt
171–180 of 634 posts
Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt
#172Earlier quoted context omitted.
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 ca…
A sounds like it would lead to increased chances of people overpaying and overextending themselves, and B sounds like it would lead to more accurate pricing.
That’s one of the talking points parroted by HFT firm representatives defending their business. There’s a lot of research on it as well. I bet successful real estate firms will use that same argument. I personally have a hard time believing this will benefit the average consumer buying a home.
Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt
#173Earlier quoted context omitted.
>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…
That's all everything ever is anymore.
You don't need to be a good stock picker if you know that someone sent a buy out, and you can get there first, buy it and then sell it to them.
You don't need to find good domain names, just wait for someone to search if one is available and then buy it.
Or when you Google for Verizon and the first thing you see is an ad for verizon.com. Most people will click the ad instead of the first listing.
Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt
#174Earlier quoted context omitted.
> 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 ca…
those hedge funds don't have access to enough money to move the market that much
$2.6 billion is chump change to a medium-sized city with a few hundred thousand residents, much less the US at large
We just need to remove zoning restrictions so that market forces can bring houses back down to being an affordable, depreciating asset.
https://www.worksinprogress.co/issue/the-housing-theory-of-e...
Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt
#175Earlier quoted context omitted.
> 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.
> 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.
IIRC, when I bought my home, the closing date was about two months after we'd made the deal with the seller.
But that's not as long as it seems: there's stuff you have to do in that time, like getting the inspection done, haggling over any issues found, and getting ready to move in/moving out.
Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt
#176Earlier 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…
This is radically different than the 2000s bubble.
also GME is over $200 currently, when it was $10 a year ago
Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt
#177Earlier quoted context omitted.
"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…
It's pretty obvious that there are large returns to density. This has been repeatedly studied. This is why people move to cities and why employers move to cities. As more people are brought into the world, those cities will get larger. Effectively prohibiting construction is a ridiculously stupid policy > Nothing wrong with people in a community wanting to set standards for their area. There certainly can be. I don't…
"Effectively prohibiting construction is a ridiculously stupid policy"
But one has to convince the residents or other voting population of that.
"it obviously can't apply for everything, and housing is one of the things it shouldn't apply to."
I generally agree that government should take the smallest role possible. It seems that this topic has a long and expansive precedent - code requirements for how structures are built and where they can be, zoning for where structures can be built and their uses, property taxes (and seizure of non-paying), ordinances restricting what people can do on their own property, property state restrictions (disrepair ordinances), etc.
We could do away with basically all these restrictions. The question is where we draw that line, what we consider problem activity, and how we come to those determinations.
"It's also not just about "personal preference" - building more housing in these areas would be societally welfare improving."
What the preference was aimed at is that many people want single homes, garages, yards, etc. If they can't get them, they will end up moving to where they can. If they have them, they (and the other neighbors) will advocate to keep the neighborhood that way.
You can call something societally beneficial, but others might not see it the same way. It seems the boom-bust housing cycle and migrations between various cities or other areas can also provide societal benefit, and may even be self-correcting as we see people and companies select away from the highest COL areas to more attractive areas. This could lead to sufficient remaining voter base to make the building more permissible or eliminate the need by reduction in demand.
Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt
#178Earlier quoted context omitted.
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 l…
Where? Almost everywhere except for a few high cost cities. Take your pick.
There are currently 71 homes for sale in Nashville, TN at or under $175K.
Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt
#179Did Zillow factor themselves into their algorithm telling them to buy/sell? We had the same thing in our ML trading system. The first few iterations worked well because the system was set to run on small positions and volumes, and then we increased that, the PnL in the market was completely different to our models. As soon as we added ourselves into the model, we ended up trading more much like our original predictions.
Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt
#180Earlier 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.
Restrictive zoning is a consequence of scarcity seeking incentives.
Housing can't be both Affordable and a good Investment. Therefore the only proper value for a home is the price that it costs to build it. The way to do that is a 100% Land Value Tax.