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Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff

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Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff

#51

Post by c141charlie »

AareyBaba wrote: post #16
muttantt wrote: post #11

Crazy. I recently sold a condo to Opendoor for significantly more than I would have even thought to list it for. When I negotiated with Opendoor after their initial offer, I pointed out a recently sold condo (days before, in similar condition, layout and finishes) in the same complex that sold for much higher than Opendoor offered. Within hours Opendoor came back matching that same selling price. The kicker? It was a…

I suspect the 'AI software' running these companies is using linear regression to predict housing prices and one of the inputs is the price of similar houses nearby.

What could possibly go wrong with that approach? :-)

Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff

#52

Post by alex504 »

oceanghost wrote: post #45

Anecdotally: Zillow quoted a number for a house that I was selling right at the peak of all this, pending inspection. They couldn't come around and look at it though for about 6 weeks. By that time the market had turned and they said they weren't interested.

When was the peak in your view? What market is this? Thanks

Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff

#53

Post by stefan_ »

muttantt wrote: post #11

Crazy. I recently sold a condo to Opendoor for significantly more than I would have even thought to list it for. When I negotiated with Opendoor after their initial offer, I pointed out a recently sold condo (days before, in similar condition, layout and finishes) in the same complex that sold for much higher than Opendoor offered. Within hours Opendoor came back matching that same selling price. The kicker? It was a…

It's hard to tell if this is "tHe MaRkEt Is CoLlApSiNg" or just a Knight Capital 2.0. Leaning towards the latter.

Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff

#54

Post by datavirtue »

bombcar wrote: post #17
muttantt wrote: post #11

Crazy. I recently sold a condo to Opendoor for significantly more than I would have even thought to list it for. When I negotiated with Opendoor after their initial offer, I pointed out a recently sold condo (days before, in similar condition, layout and finishes) in the same complex that sold for much higher than Opendoor offered. Within hours Opendoor came back matching that same selling price. The kicker? It was a…

I've been noticing lots of "new lower price" emails from Zillow; I think the market has cooled off - but how much of it being hot was this investor competition?

A lot of people were jumping in with their rundown old houses asking rediculous (lose your ass) prices and I'm seeing them all revise as of late. This was seen mostly in rural areas--Im looking for a farm.

I saw quite a few houses that sold a few years prior for much lower prices. The disparity in estimated values and previous sales versus the list price was astronomical in most cases. The banks will happily give you a loan for whatever price so there is no check on the runaway prices except for your own personal knowledge of the historical market demand in an area.

Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff

#55

Post by missinfo »

woeirua wrote: post #7

This is kind of a big deal in the real estate sector. The only reason that Zillow would sell everything right now is if they believed that the carrying costs of the properties until they (eventually) sell would eat all of their profits. They must be seeing flashing red signs across the board that there's a slowdown in the market and that scenario is exactly what will play out if they don't exit quickly. There's no wa…

Maybe Opendoor will follow, but there's also this perspective:

Selling or shorting Opendoor due to Zillow’s flaws is akin to shorting Google due to Yahoo’s inability to monetize search well or return long tail queries properly.

https://twitter.com/rabois/status/1455564619494436870

Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff

#56

Post by jklein11 »

I'm a little bit confused about what their strategy was. As I understand it, house flippers usually buy houses, do some renovations to add value and then sell in under a year at a higher price. It sounds like Zillow tried to buy homes and hold them until they appreciated? Was there any data that supported that this would be successful?

Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff

#57

Post by dreyfan »

missedthecue wrote: post #38

Big ups to hedge fund short seller Jim Chanos for calling this one way back in 2019. https://twitter.com/WallStCynic/status/1192663938720292864 Steve Eisman, the short seller who was Mark Baum in 'The Big Short' also predicted this in 2019. https://www.cnbc.com/2019/08/08/big-short-investor-steve-eis...

With the complete rout today of -11.5% and the additional -11.0% aftermarket on Zillow's stock, it's still up +95% from when Chanos made that comment.

Calling bullshit simply isn't worth the hassle these days (e.g. see Tesla and cryptocurrency fans). Better to figure out how to identify the top and keep opinions to yourself.

Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff

#58

Post by busterarm »

All of the 'Owned by Zillow' listings here in the Miami area are _really_ shabby flips. They'll basically redo the kitchen and leave the rest of the property looking like garbage and then ask for a 15% markup.

Also they prioritize those listings now, with no way to filter them out, so when looking at houses I end up just scrolling past several pages to get to other listings that I actually want to see.

It's amazing that this whole scheme has made their traditional user experience worse at the same time.

Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff

#59

Post by [deleted] »

tppiotrowski wrote: post #14

"The surprising exit, announced with pedestrian quarterly profits, thrashed shares in another rough trading session Tuesday, a day after an analyst said two-thirds of the homes it bought are underwater." https://fred.stlouisfed.org/series/MSPUS The fed chart shows almost hockey stick growth in housing prices this year. How can the Zillow properties be underwater, did they just massively overpay up-front?

[deleted]

Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff

#60

Post by qbasic_forever »

That's about 2k employees in the Seattle area that will be looking for a job very soon. Who's hiring in the area? Amazon had a bad quarter too so I wonder if they're cooling off a bit on recruiting and hiring for a moment. Might be nice to have a Seattle area hiring/job opportunity thread of some sort to help folks.
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