Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

stevenbuccini.com

Post reply on HN
Print view View original

211–220 of 386 posts

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

#211

Post by tartoran »

mint2 wrote: post #154
willcipriano wrote: post #145

Earlier quoted context omitted.

Certainly it isn't a issue after they cats no longer live there and it's been cleaned to a reasonable standard. If it knocks 20 grand off the price of the house it's worth spending 2k to have everything deep cleaned.

Cat pee permanently stains flooring and is also extremely hard to get the smell out. 2k will not be nearly enough if there’s extensive cat damage. Wood floors turn black with it and must be replaced.

Yes, even after extensive renovations cat pee smell can persist and some people are bothered by that smell. Im one of those people but I do like cats and wouldn’t mind having cats if they wondered around the neighborhood rather than be inside only.

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

#212

Post by skinnymuch »

JKCalhoun wrote: post #10
droopyEyelids wrote: post #8

In the original Foundation books by Asimov, the conceit of "Psychohistory" was similar to the concept of machine learning for pricing: The future can be predicted _if people aren't aware of the prediction to change their behavior in relation to it_ This is similar to 'adverse selection' in real life & in Zillow's model. The article makes a nod to this, but seems to imply that if you train your model on that adverse s…

I'm reminded always of the Hunt brothers that tried (and failed) to corner the silver market in the 70's/80's: https://en.wikipedia.org/wiki/Silver_Thursday

I don’t get it. Wiki only says they failed because of the other institution changing the rules because of them. What’s the analogy to housing or Zillow?

Sure they failed. But the only data we have is that they failed because of something very specific which doesn’t relate to much else.

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

#213

Post by elliekelly »

skohan wrote: post #28

> They thought they needed to build a machine learning model when they really needed to build an entirely new organization, one that possessed the technical and cultural mindset necessary to succeed in this space. I totally agree. It's not impossible to imagine their model working: 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…

> However I think where the hubris lay is in how they thought they could leapfrog all the way to an automated solution before building a competency as a house-flipping company.

In my mind this is the problem with consultants who try to automate processes. It’s really difficult (maybe even impossible?) to successfully write a program to make a computer do $thing if you don’t understand the intricacies of how to do $thing manually.

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

#214

Post by skinnymuch »

JanisL wrote: post #20
JKCalhoun wrote: post #10

Earlier quoted context omitted.

I'm reminded always of the Hunt brothers that tried (and failed) to corner the silver market in the 70's/80's: https://en.wikipedia.org/wiki/Silver_Thursday

Basically the COMEX changed the rules explicitly to disadvantage the Hunt Brothers. The changes made to margin requirements is what made the difference here. I don't think anyone could claim that the silver market is an entirely free market, I remember last year a press release where the COMEX said they weren't sure how much they actually had in their vaults in eligible and registered, with a plus/minus 50% figure be…

Would some cryptocurrency stuff count? We have no idea how much a handful of whales control Bitcoin or Eth. The tether thing seems really shaky too with how much they actually have in reserves. Same with a number of exchanges or major market players.

Cryptocurrency is also a bit wonky because of always including forever lost access to a solid percentage of the currency. Bitcoin is the most notable.

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

#216

Post by ec109685 »

zatkin wrote: post #197

What does 'bootstrap' mean in the context of this article?

In order to actually understand true risk (to create a profitable model), you’ll actually have to experiment and lose money in order to bootstrap your own ML model. Taking data acquired elsewhere and hoping it can make your own model instantly profitable isn’t possible.

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

#217

Post by encoderer »

eropple wrote: post #104
encoderer wrote: post #102

Earlier quoted context omitted.

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…

It’s clear your approach to housing is consistent with your life choices. I think maybe you are just thinking your approach is “normal” and the right way to do things.

A lot of people buy starter homes, or homes in areas they do not plan to stay 10+ years, or homes they outgrow. That’s all normal too.

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

#218

Post by gnopgnip »

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…

Vacant housing is a problem, but across the US less than 2% of single family homes are vacant

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

#219

Post by skohan »

loeg wrote: post #179
rswail wrote: post #86

Earlier quoted context omitted.

It's not about safety, it's also about amenity and suitability and sustainability. In some areas, density is important given the population, in others its not. Parking requirements are about local traffic management as well. Set backs are about ensuring natural light. Some local regulation is about NIMBYism or HOAism, that sort of thing is where reform might be better addressed.

Lack of set-back rules do not prevent building houses with set-back. Lack of parking law does not prevent building parking. Developers will not build density if it isn't a profitable use of the land -- i.e., important given the population. Rezoning to permit density does not immediately replace all existing structures. Mandating these things is some of that "local regulation tied into NIMBYism" you mention.

Profitability isn't the only important metric here. It might be profitable for developers to increase density well beyond the point where it causes measurable negative externalities towards everyone occupying an over-crowded place.

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

#220

Post by kgwgk »

JumpCrisscross wrote: post #173
hhmc wrote: post #163

Earlier quoted context omitted.

> i.e. buying at the bid and selling at the offer. Really they _quote_ simultaneously the bid and offer (although there will be times when they do only one or neither). Saying they simultaneously buy/sell is wrong/confusing.

> Saying they simultaneously buy/sell is wrong/confusing That wasn’t claimed. What was said is the archetype is simultaneity. That is 100% accurate for how the term “market maker” has been used, globally, since at least 1999. (Pre-GLB/LTCM and post-ECN, the term was used more broadly.) Drift from simultaneity incurs cost and risk. Those costs and risks must be managed. If you aren’t thinking in those terms, you aren’…

> Drift from simultaneity incurs cost and risk. Those costs and risks must be managed.

That’s the point of being a market maker. Managing those costs and risks well enough to make money from the spread.

Post reply on HN