Well, maybe they just exited because we're going into a recession and it's a good time to get out of house-flipping.
Zillow lost money because they weren't willing to lose money
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Re: Zillow lost money because they weren't willing to lose money
#282The article offers no new or inside information, just more armchair quarterbacking. I'm surprised that it is getting traction on HN. I think it says more about the zeitgeist than it does about the (lack of) insightful-ness of the content.
As someone who upvoted but didn't care much for the content, I think it's worth mentioning that sometimes/often I upvote for the currently occurring conversation to get more eyes, not for the link. I haven't seen too many specifics on the Zillow collapse and I've learned a nice deal through many of the comments here, most not having much at all to do with the article.
Re: Zillow lost money because they weren't willing to lose money
#283Earlier quoted context omitted.
"i never really noticed"
Yes, you'd have to be prepare to counter that with e.g. testimony from neighbors, or friends who heard the previous owners complain. It's not a slam-dunk, but it is an actionable tort.
Also good luck getting positive ROI on that multi-year lawsuit over things that buyer can reasonably say ‘never bothered me really, I don’t know what they’re talking about - sounds like they’re just irritated at life’. Especially when you factor in all the legal fees and several years of hassle going through the courts.
None of these things are necessarily unusual in most neighborhoods. All at once is irritating to most people - but hard to objectively prove are a true nuisance in a legal sense.
Re: Zillow lost money because they weren't willing to lose money
#284Buying assets using models, I’ve seen that in stocks, but people usually don’t go all in with how hard it is to predict the economy
Re: Zillow lost money because they weren't willing to lose money
#285Earlier quoted context omitted.
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.
Killing small animals and birds.
There are billions of old and ill small animals and birds each year who would normally be taken care by various predators. Around humans pretty much only cats can do that important and necessary job. The popular Smithsonian study that people like to cite which states billions of killed by cats somehow fails to mention what share of killed are ill/old vs healthy. There is no surprise though in such a glaring deficiency of that study once one learns that that Smithsonian team has a researcher convicted for animal, specifically toward cats, torture.
Another aspect - rats, a human civilization companion, raid nests for eggs thus decimating birds population around humans. By controlling rats cats help to maintain birds population.
Re: Zillow lost money because they weren't willing to lose money
#286Good 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...
Half way through I was already clicking "Reply" thinking "...is this guy for real?!", only to see the "Oh wait..." The amount of social media content revolving around "how I became a milionaire/how I reached my first million" and the common factor is "I bought a house in 201*", then I'd say something is a bit off... Either there's massive speculation, or 1 million isn't what it used to be, or worst: both.
It's just a bubble: owners want the value to increase, county or city wants the value to increase (to get more tax money), everyone wants the supply to be very limited to increase the price and the value, it's a Munchausen pulling himself by the hair from the swamp. In this case 1 million is not what it used to be.
Re: Zillow lost money because they weren't willing to lose money
#287I love this guy’s movies. Finding out he writes so articulately to boot? Wow
Re: Zillow lost money because they weren't willing to lose money
#288Earlier quoted context omitted.
Indoor cats don't magically get diseases. Just like an indoor pet bat isn't going to magically contract rabies. They might if you are letting them out to go roam the terrain. I'm really tired of these silly perpetuated mythologies.
How can an indoor cat ever clean themselves though? It doesn’t seem like most indoor cat owners bathe the cats, do they?
Cats lick themselves to get clean. They don't bathe even when they're outside.
Re: Zillow lost money because they weren't willing to lose money
#289Earlier quoted context omitted.
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.
> The common pattern I observe is having a new ideas and de-risking it into a successful business. That is a common pattern, but when you see a company launch a new venture and the primary goal is to not lose money, often, the desire not to lose money leads to decisions that prevent actually making money.
You could use that argument to justify spending more money on any unprofitable venture. If you discover that some market segment is higher risk or lower profit than you expected, that is a good reason to consider course correcting.
Around 2008, some investment banks famously had a single division manage to lose significantly more money than the entire rest of the company made over the same time period. Zillow not wanting to replicate their mistake isn't necessarily a bad decision.
Re: Zillow lost money because they weren't willing to lose money
#290Earlier 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…
> [T]hey thought they already had good enough models to avoid taking large losses. That's a fair point; the essay doesn't do much to distinguish whether they didn't know they needed to take losses, or couldn't take the pain of the losses. Nevertheless, it's a pretty good analysis of what a company needs to do, in order to build a model relevant to their own actual business. They need to both know about the pain invol…
Their model was something like buy houses for 'market_price(house) * 95%' and then sell them for 'market_price(house)'. The article argues that they should have devised a core complex model for asking prices, but an equally viable strategy would be to make sure their market price estimations were sufficiently accurate. That doesn't take any company specific information so it is entirely plausible (although false) that their Zestimate values would work well enough.