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

#221

Post by long_time_gone » Tue, Nov 02, 2021, 4:08 PM UTC

lotsofpulp wrote: post #137

drnonsense42 wrote: post #127

Earlier 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.

You are right that the pricing is more accurate. But it is more accurate for a company trying to increase their own revenue, not someone trying to own and occupy a house (most Americans, based on home ownership rates). The calculations used are entirely different and so is the capital available. In the world without this type of behavior, that pricing difference could be captured by an actual homeowner over the life of their mortgage.

It's another thing we are seeing "optimized" right in front of us. Meanwhile, housing, education, and healthcare get more expensive for actual humans.

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

#222

Post by tjr225 » Tue, Nov 02, 2021, 4:10 PM UTC

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

Look at any moderately sized midwest cities subreddit and you will find countless posts about rapidly rising housing costs.

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

#223

Post by browningstreet » Tue, Nov 02, 2021, 4:10 PM UTC

nradov wrote: post #178

browningstreet wrote: post #122

Earlier quoted context omitted.

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.

Ahh, you see, I have an ex-wife and a child I share custody with. I'm in the place that I'm in. Others are probably similarly constrained geographically.

I do WFH -- someday, I may head away from my current place, but I'm not that flexible yet.

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

#224

Post by kingaillas » Tue, Nov 02, 2021, 4:10 PM UTC

_huayra_ wrote: post #155

harryh wrote: post #75

Earlier quoted context omitted.

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 m…

>Is there a dearth of skilled labor for building houses?

Yes - https://www.npr.org/2021/07/30/1022642064/planet-money-why-a...

In summary, the US has been underbuilding ever since the housing crisis, and this makes people avoid construction trades. Fixing it will take years.

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

#225

Post by jmrm » Tue, Nov 02, 2021, 4:11 PM UTC

tibiahurried wrote: post #220

Homes like stocks are way overvalued. Homes are fueled by the frenzy of ownership at all costs, and stocks keep pumping at absurd levels. Everything is extremely overpriced. Eventually, it will come down to common sense. My friend has put all his savings and stocks to buy a 2b apartment. Myself, on the other hand, did not sell any stock and have invested all my savings. I rent a much bigger place, my rent is way lowe…

This happened in some European cities, and now, a mortage or a rent are equally expensive even to high wage people, like engineers and surgeons.

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

#226

Post by cudgy » Tue, Nov 02, 2021, 4:12 PM UTC

andrewmutz wrote: post #189

altacc wrote: post #43

Earlier quoted context omitted.

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've never seen any good data that supported the myth of institutional house buying being a big enough phenomenon to affect homeowners. It was never apparent in the homeownership rate ( https://fred.stlouisfed.org/series/RHORUSQ156N ) which has been broadly stable for decades, and the jumps over the last few years are, if anything, towards increased homeownership, not less.

It is apparent in the rental listings for single family homes in decent neighborhoods though. A large percentage of listings are from landlords like Invitation Homes, Key Homes, etc.

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

#227

Post by monkmartinez » Tue, Nov 02, 2021, 4:13 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…

They simply overpaid. My neighbor received an offer of $150k over the z-estimate in Tucson. He felt that it would be stupid not to sell and wasn't even thinking about selling before the offer came in, so he sold. He paid a slight premium to buy his new house out in the boonies, but the gain offset the rise in price. They are currently listing his old house at the zestimate... I doubt they find a buyer even at that price unless its someone from out of state that has no clue.

I don't think it takes a rocket scientist to see the hockey stick graph on Zillow's price div to see this isn't a great time buy. It makes me giggle to think about what they were thinking. Some houses have tripled in "value" in a year. It's artificial and it will revert to the mean. Income in this city simply doesn't support the price level we are at for renting or buying. People are moving into apartments or out into the sticks to wait it out.

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

#228

Post by FFRefresh » Tue, Nov 02, 2021, 4:13 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…

Responding here given that you are calling out the 'fallacy' of others.

You seem to be making quite declarative statements here that are false:

-Buying real estate does not always end badly

-Zillow's core business is not transactions

Zillow's issue was not that they attempted to buy houses, it was that they didn't operate with enough fiscal discipline in doing so. They got too far out over their skis, as the saying goes.

Given your suggestion that someone who signed off on the idea should be fired, is there any record of you stating publicly that the person should be fired for the idea when they first started this endeavor (or at least when you first heard of it)? If not, it seems like you are operating with the fallacy of hindsight bias.

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

#229

Post by driverdan » Tue, Nov 02, 2021, 4:13 PM UTC

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.

It's mostly driven by real demand. I just bought a house and the market was absolutely insane. It seems like everyone is trying to buy right now. Every house I looked at had multiple offers the day of the listing. I'm sure speculators have an impact in some markets but that's not what I saw here.

Until supply increases or demand drops these prices aren't going anywhere but up.

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

#230

Post by gfosco » Tue, Nov 02, 2021, 4:14 PM UTC

HWR_14 wrote: post #156

Kalium wrote: post #56

Earlier 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.

In the very hot markets only. Anecdote that matches your experience: I sold a house at the beginning of this year (sf east bay), and it was on the market for a few days and closed ~30 days later. More than a dozen offers, most with no contingencies. Top offer was more than 120k over ask.