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

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

#471

Post by seanmcdirmid »

davidw wrote: post #467
xibalba wrote: post #144

Earlier quoted context omitted.

> Quant firms for the stock market in the early 90s False equivalence. The real estate business which Zillow failed is massively capital intensive, whereas figuring out a quant strategy is not necessarily so. In other words, it is very possible to go out of business before a business model is worked out (assuming there is an undiscovered, workable business model). Investors will not endlessly fund money losers, and Z…

> Also, don't YIMBY's want to eliminate SFH anyway? No, only the zoning designation, meaning that if you want, you can build a SFH. Or a 4-plex. Or maybe a corner store.

Like they have in Houston. So you get scenes like the ones in this article: https://www.chron.com/news/houston-texas/houston/article/Wei...

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

#472

Post by cletus »

enaaem wrote: post #434
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.

Houses don’t go up in value. It’s the land. What makes a piece of land valuable is it proximity to work and leisure. Land in growing cities and towns should go up in value. The only way to make housing price constant is to give people the ability to tear down an old building and built something higher. That’s how cities like Tokyo have more stable housing prices compared to western cities.

That's simply not true.

Houses have labour and material components. The materials have a labour component too. It's now more expensive to build a house (per square foot) than it was 30 years ago because of wage inflation.

This is one reason why real estate is viewed as a good hedge against inflation.

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

#473

Post by Scoundreller »

mywittyname wrote: post #465
ajsnigrutin wrote: post #406

Earlier quoted context omitted.

I mentioned the idea in another thread... but yeah... 0% property tax on your first property and primary residence, 1% on the second, 2% on the third... Still makes it possible to own several houses/apartments (eg. summer home), but makes it impossible to do at a scale that those companies do.

Own a bunch of shell companies that own a single property each. Real estate ownership is a mess. It can be nearly impossible for people to figure out who actually owns property if the entity buying wishes to remain secret.

Then charge the full tax rate when the ownership is a non-natural ???.

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

#475

Post by ultraluminous »

gonehome wrote: post #374
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 framing feels backwards to me - I thought the reason institutional investors see it as a valuable asset is because of NIMBYs constraining supply for them via local policy and obstruction. The institutional investors are a symptom of that policy, but the NIMBYs (and incentives that exist for existing owners like prop13) are the cause. Real Estate scaling supply to meet demand is in direct conflict with old proper…

I've seen this argument touted frequently in housing related threads and it always confuses me. Housing prices have soared over the majority of the developed world - dozens of countries[1]. Is NYMBYism and prop13 driving the housing crisis in Luxembourg? Chile? Estonia? Do you think the entire world property market, taxation and legislation is structured exactly like in the California bay area? The whole "just zone more high rises" argument is so obviously reductive, I can't help but think it's pushed primarily by property developers and speculators.

Housing prices continuously rising to slurp up any marginal income has been studied by economists for a couple of centuries (rent extraction), and taxation solutions such as a Land Value Tax were suggested by Adam Smith himself.

https://blogs.imf.org/2021/10/18/housing-prices-continue-to-...

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

#476

Post by duped »

tjr225 wrote: post #222
duped wrote: post #98

Earlier quoted context omitted.

Not everywhere is California

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

I live in a moderately sized Midwestern city. We don't have a shortage of new construction or regressive zoning laws.

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

#477

Post by fleddr »

munk-a wrote: post #345
ep103 wrote: post #321

Earlier quoted context omitted.

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.

We have these in BC - they were adopted in response to overseas real estate investment (and other factors) driving the Vancouver housing market insane. Canada also has a number of programs that make property purchase for new homeowners more affordable by waving some taxes and allowing interest free borrowing from your retirement fund. So the fight to keep housing affordable for everyone is a difficult one. One of the…

"but over time these policies tend to settle in a place where thing are more affordable."

I seriously doubt that to be true in a low supply situation. In the Netherlands, the government reduced real estate transfer tax from 8% to 2%, and sometimes even 0%. This should make houses more affordable to newcomers.

Another well intended measure was for older people to share their wealth to their children via early inheritance, tax free.

The market simply adds this discount and extra start capital to the price "room". In a situation of perpetual scarcity, the price will rise to the maximum people can afford/borrow.

And with "people", I mean only the buyers. It doesn't matter if 90% of the population is priced out of the market if the richest 10% is still enough people to buy up all supply.

This last bit is most worrisome, because it means that even the nuclear instrument of increasing interest rates is unlikely to resolve the issue. The interest cannot be jacked up much because that would bankrupt the middle class. A minor tweak will be no issue at all for the richest 10%, so the price will not come down.

Increasing supply in a dense and popular area isn't a structural solution. Not only does it meet a lot of resistance, new demand will forever continue to outpace the constraint of delivering new supply.

Which is why I believe in reorganizing demand. These dense areas are dense because it gives people access to jobs and education. If we reorganize that into a more sane distributed way, we truly address the problem.

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

#478

Post by davidw »

seanmcdirmid wrote: post #471
davidw wrote: post #467

Earlier quoted context omitted.

> Also, don't YIMBY's want to eliminate SFH anyway? No, only the zoning designation, meaning that if you want, you can build a SFH. Or a 4-plex. Or maybe a corner store.

Like they have in Houston. So you get scenes like the ones in this article: https://www.chron.com/news/houston-texas/houston/article/Wei...

Yes, and housing is massively more affordable than elsewhere. And there's less homelessness, because people can more easily afford homes.

Not to say that it's necessarily a model to follow: there's a lot of sprawl involved. Just saying that "abundant housing has some real benefits".

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

#479

Post by thesausageking »

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 not a bubble. New housing construction fell by ~30% when the pandemic hit and still hasn't yet recovered to fill the deficit. At the same time, the US has been printing money like crazy and keeping interest rates at zero, which makes housing prices rise. This is why Blackrock and other PE funds have starting buying housing. They know that, in this market, it's a great bet to make. It unfortunately means your rent isn't going to come down or even stop going up anytime soon.

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

#480

Post by MrKristopher »

cwkoss wrote: post #384
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,…

Every person or corporation that owns more than one residential dwelling should pay increased property taxes based on the number of residential dwellings they own. This is an easy problem to legislate away, our politicians are just too cowardly to decommodify housing.

In California this would be framed as a repeal of Prop 13. Not sure why you think that is easy to legislate away.
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