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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

#251

Post by anchpop »

whimsicalism wrote: post #249
anchpop wrote: post #203

Earlier quoted context omitted.

> Because they would outbid people who actually want to live in those homes If they outbid everyone who actually wanted to live there, who were they planning to sell to? :P Buying things you think are underpriced and reselling them is not frontrunning. (Ever since GME, a lot of people learned the word frontrunning and started using it in every possible situation.) Zillow's plan was to act as a market maker. Market ma…

> If they outbid everyone who actually wanted to live there, who were they planning to sell to? :P I mean, exactly - they lost $550 million. Didn't stop them from burning massive capital reserves to outbid tons of people and fuck up the market a bit for them on a bad bet.

So they basically gave $550 million to UMC homeowners by overpaying for houses, while making it slightly harder for other UMC wanna-be homeowners to buy homes for a couple months. Not the worst outcome I can imagine

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

#252

Post by anchpop »

dogman144 wrote: post #214
anchpop wrote: post #203

Earlier quoted context omitted.

> Because they would outbid people who actually want to live in those homes If they outbid everyone who actually wanted to live there, who were they planning to sell to? :P Buying things you think are underpriced and reselling them is not frontrunning. (Ever since GME, a lot of people learned the word frontrunning and started using it in every possible situation.) Zillow's plan was to act as a market maker. Market ma…

Lol at trying to explain these practices as some sort of Randian perfectly functioning market.

I find I'm most likely to be right when people are responding to me with thought-terminating buzzwords rather than actual arguments

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

#253

Post by devnull3 »

enlyth wrote: post #113

Good riddance, I hope this company burns to the ground The software developers working for this company knowingly tried to make algorithms to flip and profit off of something that should be a human right Replacing carpets and painting walls, trying to flip for a 20% profit, the people running Z must be geniuses As a millennial looking at 2 bedroom flats selling for £575k (780k usd, not far from a million dollars) in…

> buying a "portfolio" of houses, they can live out their lives without contributing society in any way

A lot of people want this. Its basic human nature ... take or construct the path of least resistance. Its just that most people cannot do this and only top 1% can.

The whole FIRE movement makes ppl aspire for the day when they can live on passive income from the savings/investments.

https://en.wikipedia.org/wiki/FIRE_movement

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

#254

Post by Pxtl »

enlyth wrote: post #164
AussieWog93 wrote: post #136

Earlier quoted context omitted.

In defense of Zillow, they weren't looking to buy a "portfolio" of houses - they bought as many as they sold, and didn't have any net negative effect on housing supply. Yes, they're profiting off of a bad situation, but they're not the cause of it. Bev from the local council's planning department, as well as Michael Caton's horrific propaganda piece, has done more damage than every flipper combined.

I'm not saying Z is the cause of the crisis, it's more like them trying to capitalize on it. How bad you view this is based on your political quadrant, so fair enough to those who don't think it's a problem. What I'm trying to bring attention to is that our generation is frustrated, we are priced out of owning a home unless we have some massive help from our parents or inheritance, and being repeatedly told that we w…

The "own nothing" wouldn't be so bad if there were massive reasonably priced rental units being built, but that's not a thing either. NIMBYism is killing rental too.

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

#255

Post by anchpop »

justinpombrio wrote: post #230
anchpop wrote: post #203

Earlier quoted context omitted.

> Because they would outbid people who actually want to live in those homes If they outbid everyone who actually wanted to live there, who were they planning to sell to? :P Buying things you think are underpriced and reselling them is not frontrunning. (Ever since GME, a lot of people learned the word frontrunning and started using it in every possible situation.) Zillow's plan was to act as a market maker. Market ma…

> Despite maybe seeming like a useless middleman, the reason market makers can exist is because they provide a valuable service to the buyer and the seller. Well, and also because it's illegal in some states to buy directly from a car manufacturer, so you're forced to go to a dealership whether they provide value or not. Would eBay and Amazon be considered market makers, as they pair up buyers and sellers?

I don't think so. Market makers normally buy before having a specific seller in mind. I think eBay and Amazon's 3rd party sellers transact directly to customers, and just pay those sites a cut of each sale. eBay only is able to charge that fee (really, it's an economic rent) due to a monopoly enforced by network effects. A classic market failure. (I'm not as sure about Amazon but I wouldn't be surprised if a similar effect was at play.)

New car dealerships really don't many any sense and regulated into existence haha. I was referring to used car dealerships

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

#256

Post by dvdhnt »

enlyth wrote: post #113

Good riddance, I hope this company burns to the ground The software developers working for this company knowingly tried to make algorithms to flip and profit off of something that should be a human right Replacing carpets and painting walls, trying to flip for a 20% profit, the people running Z must be geniuses As a millennial looking at 2 bedroom flats selling for £575k (780k usd, not far from a million dollars) in…

Commenters calling your comment ‘myopic’ is the pot calling the kettle black. Their attitude exemplifies the problem of the commoditization of a fundamental human need. They sacrifice the long term health of the housing market for short term profit. It’s shameful and I expect better from people who so often claim to be educated and logical. Personally, I couldn’t live with myself if I sold perfectly good family housing to a corporation for convenience’s sake.

I admire your strong conviction. Cheers.

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

#257

Post by jnwatson »

AussieWog93 wrote: post #136
enlyth wrote: post #113

Good riddance, I hope this company burns to the ground The software developers working for this company knowingly tried to make algorithms to flip and profit off of something that should be a human right Replacing carpets and painting walls, trying to flip for a 20% profit, the people running Z must be geniuses As a millennial looking at 2 bedroom flats selling for £575k (780k usd, not far from a million dollars) in…

In defense of Zillow, they weren't looking to buy a "portfolio" of houses - they bought as many as they sold, and didn't have any net negative effect on housing supply. Yes, they're profiting off of a bad situation, but they're not the cause of it. Bev from the local council's planning department, as well as Michael Caton's horrific propaganda piece, has done more damage than every flipper combined.

They actually improved the market by providing liquidity.

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

#258

Post by jnwatson »

maxsilver wrote: post #190
lokar wrote: post #141

Earlier quoted context omitted.

They were trying to act as a market maker, providing liquidity for a price. Nothing wrong with that.

> Nothing wrong with that. Zillow was literally scalping housing , a basic human need that all people must buy. That's generally considered very immoral by most reasonable people. And they didn't just do it once or twice, they did it at ridiculous scale (tens of thousands of homes sold last quarter, was a sale to a scalper to artificially drive up all housing prices). Most reasonable people would consider this behavi…

There are several TV shows that show house flippers. You think that's immoral?

For each property, they engage in two transactions for which all parties involved are willing participants. How is that immoral?

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

#259

Post by jnwatson »

darthvoldemort wrote: post #43
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…

It's a huge pivot to go from flipping houses to becoming a landlord. It would essentially be a disaster for them. That's a high-touch business and probably the costs associated with it, and the legalities around it are too complex. That's basically turning into an Avalon or something. The interesting question is around their bonds. They were basically convertible bonds which likely triggered, but now they have to pay…

They could work with a large property management company, or buy it outright. The demand for single family home rentals in the US is quite high.

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

#260

Post by whymauri »

busterarm wrote: post #58

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 t…

I can't imagine having Zillow's financial resources and losing money in the Miami market, of all places. Dear god that place is hot (real estate and weather!).
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