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Zillow lost money because they weren't willing to lose money

stevenbuccini.com

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Re: Zillow lost money because they weren't willing to lose money

#101

Post by jason-phillips »

h2odragon wrote: post #68
_xnmw wrote: post #54

Good riddance. If large-scale house flipping took off, we might actually end up in a scenario where housing was treated as a speculative asset, with empty houses getting flipped between investors looking to make a quick buck, further lowering the supply of actual places to live (because housing units remain empty while being flipped), driving up the cost for families who just want a place to live. Oh wait...

My wife did some work for the Census last year. Our extremely rural neighborhood has lots of unused housing, some for a decade+. That work got her out to see some of the places not visible from the roads, and increased our awareness of the scale of the problem. At a guess, in our county, 20%+ of the housing is idle, owned by out-of-state companies, some of whom pay property taxes and some dont. The county isn't aucti…

> I think the housing market is so fucked no one really grasps the scale of the problem.

I don't think I agree with this assessment. I live in a very rural area two hours northwest of Austin, literally in the middle of nowhere. I've studied the local economy and understand how things work here.

I think the characteristics you've identified in the rural housing supply are not unusual and also not as serious in a practical sense as you seem to be indicating. For example, in San Saba, Texas, 20-30% of the households are under the federal poverty threshold. The median household income in the town of San Saba is about $32K/yr. People just don't have any excess cash so the maintenance on dwellings is neglected. That means folks become extremely thrifty and resourceful patching what needs to be patched, very cheaply, if not for free. Some dwellings simply aren't maintained and one day won't be there anymore.

Families live on small budgets, don't require much and generally just "get by". The municipal and county governments have very small budgets but extremely resourceful staff who accomplish a lot with very little. Everyone comes together as a community when needed (see: February 2021 freeze event) and it all works very efficiently, actually.

To someone who is not from here and who doesn't understand that dynamic, they might see those properties as you described and believe a tragedy was unfolding. But that doesn't reflect reality on the ground vis-a-vis my neighbors.

Re: Zillow lost money because they weren't willing to lose money

#102

Post by encoderer »

eropple wrote: post #93
encoderer wrote: post #27

Earlier quoted context omitted.

Here’s a thought experiment: if I told you the market was going to be less liquid and you may not be able to easily sell the house you’re about to buy, wouldn’t that change your behavior? I think you’ve bought into the tik tok narrative that somehow it’s zillows fault that houses are expensive.

> if I told you the market was going to be less liquid and you may not be able to easily sell the house you’re about to buy, wouldn’t that change your behavior? No. Like a normal person, I bought my house to live in and to improve and to stay in for a long period of time. It isn't a speculative investment vehicle.

It seems like you’re presenting a straw man. Being able to sell your house and not be tied to one home for life is a reasonable desire that has nothing to do with speculative investment.

Re: Zillow lost money because they weren't willing to lose money

#103

Post by silvestrov »

sokoloff wrote: post #63
lotsofpulp wrote: post #31

Earlier quoted context omitted.

> why couldn't you serve as a market-maker for homes at a large scale, especially with the unique insights Zillow could have based on their datasets. Why would Zillow have unique insights? With the exception of Texas, I thought real estate sales information is public information in the US.

I have given Zillow a lot of non-public information over years of searching. How many people search on bedrooms but not bathrooms? When people search on both, what’s the pattern they use? If we highlight prices and BRs on the map does that give more clicks than just prices? How important are photos (times 50 different questions there)? How strong a signal is repeat views spaced over time? Saving a house to favorites?…

I think the opposite: there is not much valuable data, it is just noise.

It is very difficult to go from what users browse to what they actually buy. People very often say one thing, then do something completely different.

And sometimes they browse stuff just to make sure that their current decision is correct, so they will look at a lot of items they're not going to buy.

(oh, and everybody and their mother knows photos are important. No need for ML to find that out)

Re: Zillow lost money because they weren't willing to lose money

#104

Post by eropple »

encoderer wrote: post #102
eropple wrote: post #93

Earlier quoted context omitted.

> if I told you the market was going to be less liquid and you may not be able to easily sell the house you’re about to buy, wouldn’t that change your behavior? No. Like a normal person, I bought my house to live in and to improve and to stay in for a long period of time. It isn't a speculative investment vehicle.

It seems like you’re presenting a straw man. Being able to sell your house and not be tied to one home for life is a reasonable desire that has nothing to do with speculative investment.

No, it's that if I need to sell it I've structured my finances and my life to be able to take time to do it--because I've intentionally made decisions with the remodeling in my home to be suboptimal for selling anyway. I'd have to put up a wall and reroute a bunch of plumbing for my laundry room off my master bedroom so I could turn it back into a bedroom because that's what the dollar-signs-for-eyes crew values, so why would I be worried about selling it in 48 hours?

This is an industry I actually know a teensy bit about. Normal people don't need to sell a house in two weeks. That is an abnormal condition brought on by stupid, disinterested money flooding the market and the idea that everyone must be hyper-mobile all the time is one brought on by the more deranged, "humans exclusively acting as work producing automatons" part of a market economy. Solidity and permanence are valuable. I'd go so far as to say that when you take into account the benefits of long-term residence and ownership--and they are benefits you will not see in your ML model, such as a cohesive neighborhood where you actually know and maybe even interact with the people who live around you--that it might even be a positive to discourage market thrash. You know. For humans, and not investors.

Re: Zillow lost money because they weren't willing to lose money

#106

Post by sokoloff »

silvestrov wrote: post #103
sokoloff wrote: post #63

Earlier quoted context omitted.

I have given Zillow a lot of non-public information over years of searching. How many people search on bedrooms but not bathrooms? When people search on both, what’s the pattern they use? If we highlight prices and BRs on the map does that give more clicks than just prices? How important are photos (times 50 different questions there)? How strong a signal is repeat views spaced over time? Saving a house to favorites?…

I think the opposite: there is not much valuable data, it is just noise. It is very difficult to go from what users browse to what they actually buy. People very often say one thing, then do something completely different. And sometimes they browse stuff just to make sure that their current decision is correct, so they will look at a lot of items they're not going to buy. (oh, and everybody and their mother knows pho…

Do you think that A/B or multi-variate testing works in general?

Re: Zillow lost money because they weren't willing to lose money

#108

Post by djbusby »

indymike wrote: post #87
seoaeu wrote: post #53

Earlier quoted context omitted.

Zillow is passing on an infinite number of potentially profitable enterprises. The reason they attempted this one is because they thought they already had good enough models to avoid taking large losses . If you read their statements, it is clear the reason Zillow is abandoning the this effort is because of inaccuracies in their models not just because they were spooked by losing money. They were also spooked last qu…

> The reason they attempted this one is because they thought they already had good enough models to avoid taking large losses. Risk aversion and launching a new business strategy do not work well together.

Wait. There is a lot of messaging telling entrepreneurs to try to de-risk their new ventures. The common pattern I observe is having a new ideas and de-risking it into a successful business.

Re: Zillow lost money because they weren't willing to lose money

#109

Post by h2odragon »

jason-phillips wrote: post #101
h2odragon wrote: post #68

Earlier quoted context omitted.

My wife did some work for the Census last year. Our extremely rural neighborhood has lots of unused housing, some for a decade+. That work got her out to see some of the places not visible from the roads, and increased our awareness of the scale of the problem. At a guess, in our county, 20%+ of the housing is idle, owned by out-of-state companies, some of whom pay property taxes and some dont. The county isn't aucti…

> I think the housing market is so fucked no one really grasps the scale of the problem. I don't think I agree with this assessment. I live in a very rural area two hours northwest of Austin, literally in the middle of nowhere. I've studied the local economy and understand how things work here. I think the characteristics you've identified in the rural housing supply are not unusual and also not as serious in a pract…

I'm in rural TN; not that different a place at all. I'm not speaking of family owned homes tho. I'm talking about the Abandoned, uninhabited homes that are now owned by some out of state thing per county records... which is a lot of them. LLC's and INCs whom I believe have the properties valued highly on some book somewhere and haven't done anything to maintain them.

Our local Craigslists always have "Property inspector" jobs listed. You go take some cell phone shots of buildings to prove they exist. The people I have spoken to who have done those say they didn't bother going to the places as often as not and took pics of some neighbors house. Even when people actually do that job and document the true state of these properties I can't help but suspect the information is buried or lost because thats not the narrative management would want.

The actual family owned housing stock got better the last two years, our population doubled for the last 3/4ths of 2020, and all those relatives did a lot of renovation and rebuilding.

Re: Zillow lost money because they weren't willing to lose money

#110

Post by conductr »

jason-phillips wrote: post #101
h2odragon wrote: post #68

Earlier quoted context omitted.

My wife did some work for the Census last year. Our extremely rural neighborhood has lots of unused housing, some for a decade+. That work got her out to see some of the places not visible from the roads, and increased our awareness of the scale of the problem. At a guess, in our county, 20%+ of the housing is idle, owned by out-of-state companies, some of whom pay property taxes and some dont. The county isn't aucti…

> I think the housing market is so fucked no one really grasps the scale of the problem. I don't think I agree with this assessment. I live in a very rural area two hours northwest of Austin, literally in the middle of nowhere. I've studied the local economy and understand how things work here. I think the characteristics you've identified in the rural housing supply are not unusual and also not as serious in a pract…

My observations passing through rural Texas matches this. You frequently see houses that probably only served 1 maybe 2 generations and then they are in a poor condition uninhabitable by even those folks used to roughing it. Housing stock in rural areas just doesn’t last long.
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