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

#311

Post by PaulDavisThe1st » Tue, Nov 02, 2021, 5:27 PM UTC

VRay wrote: post #174

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…

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...

Someone in a related thread here on HN yesterday said that at some recent point in time, US$200M would have bought every piece of residential real estate for sale in Boston (proper). Didn't try to verify if that was true.

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

#312

Post by ishjoh » Tue, Nov 02, 2021, 5:27 PM UTC

webinvest wrote: post #5

7k millennials will be happy to buy them up at affordable prices.

sure, and that would be great, but unfortunately it's more likely this is going to be sold to Invitation Homes Inc or a similar company that will just turn them into rentals and they'll never enter the housing market for sale.

Invitation Homes was created after the last crash and currently owns ~80k [1] homes, so an additional 7k would represent ~10% more, and if the discount is right from Zillow they will do it. I'm speculating but I bet that's why Zillow is trying to do this in a bigger deal, they don't want to crash the housing market by actually selling these houses to individuals.

[1] - https://en.wikipedia.org/wiki/Invitation_Homes

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

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Post by judge2020 » Tue, Nov 02, 2021, 5:28 PM UTC

zemo wrote: post #291

xyzelement wrote: post #281

Earlier quoted context omitted.

> the idea that you should view housing as simply a matter of supply and demand and not consider any externalities is an abominable position Comrade, I am speaking about "how it works" not "what would be really nice if..." > Income from residential rentals is taxed at the same rate as ordinary income, the kind you get from actually doing something. I can tell you have never owned an apartment or a house. The amount o…

> I can tell you have never owned an apartment or a house. I own my home and I pay property taxes, nice try though. > Comrade, I am speaking about "how it works" not "what would be really nice if..." faced with "the rent going up is a problem for working class people" you're instantly taking the side of investors and positioning it through this lens: > I want to make sure people understand the dynamics. the problem i…

They're specifically framing it as understanding the dynamics and answering the question "What will make rents go down? Only two things". There's very little sympathy or opinion in their post.

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

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Post by ineedasername » Tue, Nov 02, 2021, 5:29 PM UTC

lvs wrote: post #273

game_the0ry wrote: post #255

Former real estate finance professional, here. If you were hoping this was a sign of the real estate market falling and perhaps its your chance to get a bargain, think again. > 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. Institutional investors (Blackstone, Blackrock, Colony, et al) will be being in bulk,…

I'd like to see an analysis of how much institutional speculation is contributing to the market pricing exuberance in housing...

At least a little of it institution-driven: https://www.marketplace.org/2021/04/13/institutional-investo...

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

#315

Post by PaulDavisThe1st » Tue, Nov 02, 2021, 5:30 PM UTC

refurb wrote: post #207

unethical_ban wrote: post #158

Earlier quoted context omitted.

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 ren…

Exactly! It’s different this time. Fundamentals are strong. Old rules don’t apply. Just like the last bubble.

Nobody is saying (I think!) that the fundamentals are strong, or that old rules don't apply.

What's being suggested is that the influx of large scale corporate purchasing in the residential real estate market is different, and that because of the old rules, this could be a problem.

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

#316

Post by game_the0ry » Tue, Nov 02, 2021, 5:30 PM UTC

mikysco wrote: post #275

game_the0ry wrote: post #255

Former real estate finance professional, here. If you were hoping this was a sign of the real estate market falling and perhaps its your chance to get a bargain, think again. > 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. Institutional investors (Blackstone, Blackrock, Colony, et al) will be being in bulk,…

Aren't all these homes required to be listed on the MLS before being sold? My understanding is a home (at least in California) can't be sold unless publicly listed for X days on the MLS.

Not necessarily true, and certainly not true if you are selling the entity (usually LLC) that owns the portfolio of properties.

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

#317

Post by k3oni » Tue, Nov 02, 2021, 5:30 PM UTC

trident5000 wrote: post #302

game_the0ry wrote: post #255

Former real estate finance professional, here. If you were hoping this was a sign of the real estate market falling and perhaps its your chance to get a bargain, think again. > 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. Institutional investors (Blackstone, Blackrock, Colony, et al) will be being in bulk,…

Thats not how you look at this. If this were a strong market signal they would be selling to Blackrock at a profit and not a loss. The exchange value is down not up. There were equal buyers matched to sellers in 2008 as well when the market was cratering (not that we are in 2008).

They paid above market for these houses in cash in order to get them and we don't know how much above market, only they and their AI know, that's what's causing them all the fuss now.

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

#318

Post by PaulDavisThe1st » Tue, Nov 02, 2021, 5:31 PM UTC

HarryHirsch wrote: post #293

rsj_hn wrote: post #260

Earlier quoted context omitted.

U.S. has a 65% home ownership rate. Not everyone can afford a Bentley or a condo in Manhattan. That is not some terrible injustice that needs to be fixed. Living within your means and buying a place where you can afford to live is also an alternate approach. Or you can moan about capitalism and how unfair life is.

The price for housing has gone up substantially in the last 20 years, housing takes up a greater share of peoples incomes than it did in the past, and there is no reason for it. We wouldn't tolerate the price of food going up by the same percentage.

We tolerate it in housing because the asset appreciates.

If food costs went up substantially, but you could eat the food and then resell it for more than you paid for it (and sometimes a lot more than just inflation-linked increases), I suspect we'd tolerate that too.

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

#319

Post by trident5000 » Tue, Nov 02, 2021, 5:32 PM UTC

k3oni wrote: post #317

trident5000 wrote: post #302

Earlier quoted context omitted.

Thats not how you look at this. If this were a strong market signal they would be selling to Blackrock at a profit and not a loss. The exchange value is down not up. There were equal buyers matched to sellers in 2008 as well when the market was cratering (not that we are in 2008).

They paid above market for these houses in cash in order to get them and we don't know how much above market, only they and their AI know, that's what's causing them all the fuss now.

Right so even with AI technology and directly owning much of the housing data in the US, they still couldnt make a profit. Any time you buy a house to flip it you are paying a premium in hopes to make a greater premium. Instead they are making a loss. Thats not a good market signal.

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

#320

Post by lthornberry » Tue, Nov 02, 2021, 5:33 PM UTC

seanmcdirmid wrote: post #216

sigstoat wrote: post #143

Earlier quoted context omitted.

> Still, why is it zoning per se that is the problem rather than just the market? dense housing is frequently not permitted by zoning. sometimes housing itself isn't permitted. > What is left is to build more dense (replace single family housing with apartments or town homes). yeah, that's exactly the thing that's banned in very many places where it would be most useful.

> dense housing is frequently not permitted by zoning. sometimes housing itself isn't permitted. But where they are permitted, housing prices are still high. Higher even, like NYC and much of New Jersey near NYC. Is there a good example where increased density has led to lower prices, not higher ones?

Most of the area in those places still has significant zoning restrictions on density--the cap is higher than other places, but there's still a cap. That's why there are still brownstones in Brooklyn.

Second, the economics of building dictate that skyscraper-level density will only happen in places where housing is relatively expensive. But there are plenty of examples of density leading to lower prices, in the suburbs.