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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

#541

Post by ganeshkrishnan »

crate_barre wrote: post #388
shmatt wrote: post #383

Earlier quoted context omitted.

This article may not be a sign, but a different[1] article is a pretty decent sign Zillow is also selling individual homes, not just this package. In their main algorithmic buying market of Phoenix they're selling individual homes, 93% of whom they payed more for than the new current listing price (and they usually do renovations before listing) So Zillow VCs are essentially paying people to take a discount on houses…

Losing money is pretty sweet?

Yes. You make up for it in volumes.

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

#542

Post by TheMagicHorsey »

BuckRogers wrote: post #529
TheMagicHorsey wrote: post #482

Earlier quoted context omitted.

I'm 45 and in the same boat as you ... except I've been waiting for a crash since 2016. I also made the mistake of keeping my cash in very cautious investments (and out of the SP500) ... thus missing the most historic bull run of my lifetime. Regardless though, as a result of working at a successful unicorn and selling a lot of my equity on the secondary market, I ended up benefitting from the Fed's insane money prin…

You likely have a lot more money than I do, from what you said. I did live in a couple of major cities in Texas over the course of 5 years. I'd recommend the Dallas area. Easily one of my favorite areas in the country, especially for someone starting off. Doing it all over again, knowing what I know now, I might have moved there long ago and stayed. It has also exploded though, but probably nothing near CA proportion…

I agree with most of what you've said, but I think the core issue of affordability is not dependent on private enterprise profits. I think the core issue in California is that its so difficult to build homes in high density, and NIMBYs prevent new development everywhere, creating more and more sprawl as people move ever out of the range of existing NIMBYs to form new towns, where they in turn become NIMBYs.

If California would allow anyone to build an apartment complex nearly anywhere (as Minneapolis does in many neighborhoods) then there would automatically be more housing, and more affordable housing for blue collar workers and entry level workers. Instead, we have so many neighborhoods where each house is forced to be on .25 acres, or .15 acre, with forced single family occupancy. Affordability is a construction, zoning, and permission problem in California.

And that high expense for housing then trickles up and makes everything more expensive from child care to healthcare to services ... as everyone has to pay workers ever more just so they can get a roof over their heads. People are making $25/hour with no college degree and feel poor.

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

#543

Post by Cd00d »

game_the0ry wrote: post #423
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).

When an institutional investor like Blackstone or Blackrock or Colony Capital calls your phone to express interest in an asset you own, I can all but guarantee you that you are in a distressed position and looking to sell. They have enough experience, data, and skill to time the market cycle. Companies like Zillow do not.

Zillow doesn't have experience or data in the real estate market? But, investors traditionally tied to securities do?

One seems like an entrenched data-hoarder. The other seems like a "we're smart enough to pivot into this" group.

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

#544

Post by asperous »

rayiner wrote: post #54

Classic example of not understanding the gap between theory and application. If your home is overvalued by Zillow, you’re much more likely to sell than if it’s valued correctly or undervalued. E.g. Zillow overvalues my house because it’s algorithm can’t factor in our weird parking situation. I’m much more likely to want to sell for a high valuation than someone whose house is valued correctly by the algorithm.

This is called information asymmetry in economic theory

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

#545

Post by pdonis »

wolverine876 wrote: post #539
frankfrankfrank wrote: post #391

Earlier quoted context omitted.

I agree. I wish people understood more of what these "institutional investors" are doing. The Fed has essentially trapped us in a system where the likes of blackrock get access to essentially free Fed printing press money right of the rollers that they then use to buy up real assets at inflated prices, which only drives up the inflation that thereby also drives up the value of previous purchases at near zero rate int…

> The Fed has essentially trapped us in a system where the likes of blackrock get access to essentially free Fed printing press money right of the rollers that they then use to buy up real assets at inflated prices, which only drives up the inflation that thereby also drives up the value of previous purchases at near zero rate interest. It's a trendy thing to say, especially in certain political circles, but could yo…

> could you substantiate it with something from a serious, non-partisan economist?

The fact that printed money is fueling the housing market does not require an economist to see; it is obvious from comparing two simple observations:

(1) Americans expect to be able to get 30 year mortgages at rates around 3%.

(2) Americans expect to be able to invest their retirement savings in stocks and bonds with a long term rate of return of 8% or more.

This state of affairs would be impossible in a free market with a money supply that was not being manipulated; in a free market, nobody would be crazy enough to lend money for mortgages at 3% when they could invest the same money in stocks and bonds and make an 8% return over the same time horizon. The only reason #1 above exists at all is that mortgages are made with printed money from the Fed.

> rates have been very low for a long time

That's because interest rates are not determined by a free market; the Fed has its thumb on the scales (see above), and has for decades.

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

#546

Post by [deleted] »

BuckRogers wrote: post #304
randomopining wrote: post #282

Earlier quoted context omitted.

What's your dilemma? If you're gonna live there for 10 years, get a large utility out of the house in general and also owning your own place, then just go for it. If you're buying just to buy, then hold off.

My dilemma is balancing inflation risks through all this increased government spending, with short-term market timing. I think that these risks are more likely than ever, and imminent. On the inflation risks. I really wish the Democrats would cancel all their ideas about child care and what not, and just shift the tax burden from the working class that punch a clock, to the investment class that live off of IRS-defin…

[deleted]

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

#547

Post by Supermancho »

pc86 wrote: post #527
donkeyd wrote: post #497

Earlier quoted context omitted.

> I wish this would anger people more It is... But what are you going to do about it? Especially in the US, big business owns the politicians who can do something about it. And prop 22 shows that even if the public gets to decide, big business manages to control public opinion to their benefit. I believe this is only going to get worse for the next couple of decades. Something major would have to happen for this to c…

So wait. Either big business owns the politicians and so nothing gets done, or people vote but they're too stupid to do it in their own interests because of big business? This sounds like the typical "the election was fair as long as I won" trope. Have you considered that maybe your opinion is just in the minority?

> Either big business owns the politicians and so nothing gets done, or people vote but they're too stupid to do it in their own interests because of big business.

> This sounds like the typical "the election was fair as long as I won" trope.

How's that? It does not sound like anything but modern American politics. Not to say it's 100% true, but it's largely true on the West Coast USA for the last 40 years...as I can only speak to what I've seen. It's a legitimate surprise when grassroots efforts are not coopted with riders/judicial nullification or drowned by propaganda.

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

#548

Post by thow-01187 »

nkozyra wrote: post #493
rozap wrote: post #468

Earlier quoted context omitted.

No ban, just huge property taxes for non-primary residences.

Doesn't this just trickle down to the renter, who has few alternative housing options?

No. Landlords do not "produce" rooms by taking raw materials and transforming them into goods. In the current market, the rent is determined by how much the marginal renter is able to pay. Increasing the cost to the landlord doesn't magically increase the renter's ability to pay

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

#549

Post by nemo44x »

smsm42 wrote: post #514
nemo44x wrote: post #492

According to their call tonight they say they are out of that business permanently. I wonder if they plan on pivoting it to something less speculative? FWIW, I'd love a system where you could "sell" a home to a broker and "buy" one without the musical chairs game of contingency offers, etc. I think there's real value in a space that completes the sale of properties based on some window of expected return for a proper…

I'm not sure what you look for is realistic. As a seller, I'd surely prefer to avoid all those contingencies, inspections, etc. - just give me the money, take the property and be done with it! As a buyer, though, I surely want something that I pay multiples of my annual income for to be thoroughly inspected, and be absolutely sure everything is ok (or at least if something is not OK I know it and it's priced in). Ris…

I get it but I’d imagine there’s an actuary table that could be put together to insure against issues in most cases. I mean the entire process today is so dated, isn’t it? A bunch of people submit offers and then 1 gets picked and then a variety of inspectors come by to make sure nothing glaring is broken. What if the intermediary scaled the inspection part (pro services are hard to scale, yes) and when you buy from them it’s “guaranteed”? Like a certified used car.

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

#550

Post by bcrosby95 »

BuckRogers wrote: post #272
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'm a 39 year renter flush with cash from 15 years of a professional job while living in austerity for the entire time. Soliciting free advice. You sound bullish so I wanted to share five risks in the short term that have been on my mind lately: 1) Evictions now allowed in 43 states after a pandemic moratorium on them. My state allowed them October 3rd. Supply. 2) A China conflict at any point. Disruption. 3) Taxes g…

I bought back in 2014. Ultimately the question I asked myself was: would I rather have a house in a place I wanted to live but overpaid for, or would I rather wait and get priced out of the place I wanted to live?

Ultimately I chose the former. Because at the end of the day, a house represents shelter to me. And roughly speaking, shelter is fungible. If the value of my shelter goes up by 50%, the value of the other shelter around me goes up 50%. If it goes down by 50%, so does the shelter around me. So buying into the market gives me a foot in the door to, roughly speaking, be able to move to similarly desirable dwellings regardless of where they are.

This is obviously a bit simplistic, but I think its a fair way to look at it.

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