Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

bloomberg.com

Post reply on HN
Print view View original

321–330 of 634 posts

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

#321

Post by ep103 »

the-pigeon wrote: post #296
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,…

This would be easy to fix with legislative that makes property taxes much higher for investment home properties. I don't think I've ever heard of a politician even talking about that though.

They are generally called non-primary residency taxes, and they're definitely a thing, and definitely getting more publicity, and most definitely need to become much stronger and more widespread.

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

#322

Post by noahtallen »

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).

Sure, but that doesn’t mean that the average person can acquire a house for cheaper today. And that’s really the only part of the story that matters

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

#323

Post by lthornberry »

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.

Housing has become significantly more expensive relative to wages, which is where the problem lies.

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

#324

Post by ajb »

VBprogrammer wrote: post #307
mediaman wrote: post #283

Earlier quoted context omitted.

A note on the mortgage: I understand your aversion to debt, but choosing a shorter duration mortgage can increase the probability of default, even if it shortens the time to the point that you are debt free, because for any given amount of cash reserves you have it shortens the runway you have if you lose your income. As long as mortgage money is cheap, the most profitable course of action is to use the 30 year mortg…

Compound interest means that you will be paying a lot more money for the same house if you buy over 30 rather than 15 years. However, for someone disciplined, taking a 30 year mortgage and paying it off like a 15 year mortgage with significant over payments is a good strategy. It means if you need to tighten your belt you can always drop down to the normal payment for a spell without so much as having to speak to the…

The answer to this dilemma is to have an offset mortgage. Your savings offset the amount borrowed, and you only pay interest on the difference. Once you've saved enough to cover it, you pay no interest.

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

#325

Post by trident5000 »

noahtallen wrote: post #322
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).

Sure, but that doesn’t mean that the average person can acquire a house for cheaper today. And that’s really the only part of the story that matters

Never suggested that. Just that there being buyers matched with sellers (there always are as that is a requirement of a market to exist regardless of its direction in price) doesnt mean the market is bolstered.

However, to me it makes sense that theres some softness in what Zillow tried to do because rates are likely to rise in the next year or so and most people know that. Thats going to put pressure on lending which effects housing demand. Their AI might be top notch but they probably just timed the whole market poorly.

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

#326

Post by throwawayyy181 »

ericmcer wrote: post #262
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…

New monetary policy is designed to prevent any kind of bust from happening. It is only boom from here on out. 2009 was the last chance to get on the train.

This comment feels a lot like Rockefeller’s shoe shine

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

#327

Post by k3oni »

trident5000 wrote: post #319
k3oni wrote: post #317

Earlier quoted context omitted.

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.

From what i've read about all their investment regarding this issue, many of the homes they purchased also needed extra investment/rehab. I think they tried their hand at automation/ai purchasing as they had a lot of data but something fell really short of expectations. What Z did is a bit outside of the current market norms so i wouldn't really use it as a market signal, i'm looking at it more as their idea/system just fell short. But at the same time i was expecting the housing market to go lower into the start of this year, boy was i wrong as the market dynamics changed fast.

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

#328

Post by game_the0ry »

the-pigeon wrote: post #296
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,…

This would be easy to fix with legislative that makes property taxes much higher for investment home properties. I don't think I've ever heard of a politician even talking about that though.

> I don't think I've ever heard of a politician even talking about that though

You have to consider that legislative members tend to own property and tend to be baby boomers. They are far removed form the experiences that younger generations have to deal with - from their perspective, their home value can go up 20% in 2 years and that will be rationalized as a normal market. They are not talking about it because they are benefiting financially, and talking about may make them hurt financially. This will change, baby boomers cannot live forever even though they behave as though no future generations exist.

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

#329

Post by ncallaway »

VBprogrammer wrote: post #307
mediaman wrote: post #283

Earlier quoted context omitted.

A note on the mortgage: I understand your aversion to debt, but choosing a shorter duration mortgage can increase the probability of default, even if it shortens the time to the point that you are debt free, because for any given amount of cash reserves you have it shortens the runway you have if you lose your income. As long as mortgage money is cheap, the most profitable course of action is to use the 30 year mortg…

Compound interest means that you will be paying a lot more money for the same house if you buy over 30 rather than 15 years. However, for someone disciplined, taking a 30 year mortgage and paying it off like a 15 year mortgage with significant over payments is a good strategy. It means if you need to tighten your belt you can always drop down to the normal payment for a spell without so much as having to speak to the…

This was the approach that made the most sense to me.

Purchase a house where you can afford the 15-year fixed mortgage, but take out the 30-year fixed mortgage. Pay it off as if it were the 15-year fixed (ensure that your loan has no penalties for prepayment or extra payments, and that 100% of extra payments go toward the principal).

If things go smoothly for you, you’ll pay a marginal amount of additional interest (because your % will be higher as a 30-year than a 15-year). However, if you run into cash flow issues, you have a good amount of reduction in mortgage payments that you can make while keeping the bank completely satisfied.

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

#330

Post by noahtallen »

xyzelement wrote: post #87
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.

> In less than 3 years the rent in our working class city went up 45%. I sympathize with that but I want to make sure people understand the dynamics. Prices are driven by supply and demand. If there's only one empty apartment in the city and you're willing to pay $2000/month, I am gonna have to pay $2100 month if I want to live there instead of you. That's sort of separate (though related to) prices of houses. What w…

> COVID, defund the police, rising crime, suburbs more attractive with work from home, etc.

If there are any cities for which this is true, it’s cities like Seattle and Portland. Theoretically, they are not desirable to live in because of COVID, very high crime rates, not idea for working from home, huge public safety problems, etc.

But rent is higher than it has ever been.

Post reply on HN