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How Zillow's homebuying scheme lost $881M

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Re: How Zillow's homebuying scheme lost $881M

#91

Post by pge »

KptMarchewa wrote: post #70
jliptzin wrote: post #51

Earlier quoted context omitted.

There's even lower hanging fruit than that. I have a 6 bedroom house, but local regulations state that I am not allowed to live with more than 2 people unrelated to me. Plenty of parking, tons of people looking for housing, but legally I am forced to keep 3 bedrooms empty.

>local regulations state that I am not allowed to live with more than 2 people unrelated to me What? Where is that? It sounds insane and extreme overreach. How can somebody regulate with whom consenting adults choose to live?

These kinds of regulations are extremely common (I might even go so far as to say they are the norm) in many US suburbs. Such restrictions are intended to prevent single-famiy homes from being used as large group houses. A probably intentional byproduct of the restrictions is also to keep lower-income residents out of desirable neighborhoods (by preventing for example, two families from occupying a large house that neither could afford individually). Minimum lot sizes have a similar consequence. If you're interested in getting into the history of housing restrictions, particularly as they pertain to efforts to limit lower-income (often minority) buyers, Richard Rothstein's The Color of Law is a good book to start with.

Re: How Zillow's homebuying scheme lost $881M

#92

Post by alistairSH »

rank0 wrote: post #59
alistairSH wrote: post #45

Earlier quoted context omitted.

“All over the country” doesn’t have good jobs, good schools, access to entertainment, etc. But, I agree on the SFH part. The expectation that a 3000sqft house on 1/4 acre is the norm is completely unsustainable. Yet that seems to be what many people want. Even in high COL areas where demand and cost should be driving density.

There are absolutely good jobs in every city in America. Entertainment can mean anything...and frankly people should be able to find fun things to do on their own without needing bars, nightclubs, concert venues, etc. I concede that good schools are a major barrier. I'm young and won't be having children anytime soon so I don't think about it much. Where I live, the public schools are pretty rough. It's cheaper to st…

Every city, sure, but cities are expensive. Even cities that used to be affordable, like Portland and Austin. But between the cities? Not much. Some small towns might work if you’re the town lawyer or MD, but a town can only support so many of those. And if you’re an engineer or banker? Not much employment.

Re: How Zillow's homebuying scheme lost $881M

#93

Post by [deleted] »

wcfields wrote: post #20
bastawhiz wrote: post #6

I recently bought a home. We toured a Zillow home, and I can understand what they were going for and where they failed. We were able to pull up to the driveway, book a tour for that minute, and walk in the front door. It was almost a magical experience compared to the process of finding and going to showings. The listings were clear and thorough. The experience was extremely compelling. The downside: the homes were a…

If I can give any home buying tip from my experience of buying two houses it's been to look at places that are in "the middle". Both homes I've bought in SoCal have had some god-awful photos online, and the finish is new-ish, but done by someone in the 70s so it's new but tacky in a little-old-lady way. This ends up pricing the house too expensive to flippers, and not nice enough to sell compared to other houses beca…

[deleted]

Re: How Zillow's homebuying scheme lost $881M

#94

Post by lotsofpulp »

a1pulley wrote: post #62
thr0wawayf00 wrote: post #9

The scary thing is that it's easy to see how something how like this could drive a market boom and bust cycle. I'm imagining a scenario where two iBuyer companies try to outbid each other algorithmically, driving the prices further and further out of reach of people who are looking for a primary home. Tangentially related, I talked to a friend who works on geospatial data for one of the big vacation rental companies,…

> It's honestly quite scary how I'm in the top 2% of income earners in my generation and yet I could barely afford to buy a small place in a semi-desirable area. I can easily see myself not being able to compete in algorithmically dominated markets flush with venture cash in the future and I earn more than just about everybody I know today. A thought exercise: suppose that no new houses are ever built and that housin…

> What happens to the price of housing in that limit?

The price continues to reflect the supply and demand of the houses. You’re either lucky to inherit the land, or you earn enough to outbid others for it. It might even be impossible to outbid those who are bringing inherited wealth to the table.

It might become a transient community, where you work and save and then leave to settle somewhere else.

Re: How Zillow's homebuying scheme lost $881M

#95

Post by RC_ITR »

paxys wrote: post #40
thr0wawayf00 wrote: post #9

The scary thing is that it's easy to see how something how like this could drive a market boom and bust cycle. I'm imagining a scenario where two iBuyer companies try to outbid each other algorithmically, driving the prices further and further out of reach of people who are looking for a primary home. Tangentially related, I talked to a friend who works on geospatial data for one of the big vacation rental companies,…

One can blame Airbnb, Zillow or whoever else, but the truth is that speculation in real estate and vacation towns have both been a thing for a very long time. If the population rises and we refuse to build more houses, the existing ones will get more expensive no matter what. The solution is out there in front of us but everyone prefers to dance around it.

Exactly. Formerly the 'unseen' behavior was seasonal renting brokered through agents or high-end advertising. This still kept locals out of the house, but 1) it was harder for normal people to become aware of the listings in the first place 2) One renter who comes every weekend for an entire season 'feels' more like a local.

Now what we have is listings that are easily found via google and a much broader set of visitors whose faces change every week. Our limited brains interpret that as a much bigger shift than it may actually be.

Re: How Zillow's homebuying scheme lost $881M

#96

Post by sokoloff »

kevin_thibedeau wrote: post #87
thebean11 wrote: post #66

Earlier quoted context omitted.

> suppose that no new houses are ever built Why would you suppose that? I don't really see what you're getting at, that's a very unintuitive assumption; it shouldn't happen if market forces are allowed to run their course.

New afordable housing isn't built. Everything is "luxury" so that developers can maximize profit. When someone tries to build affordable duplexes the NIMBYs say not in my town.

Even luxury units add supply to the middle and affordable parts of the housing stock. Today's luxury units are often bought and moved into by someone moving up from a mid-market place, the buyer of which is likely moving up from a 25 year old now affordable place.

(Alternately, if no luxury unit is built, many of those buyers will be forced to buy the best-of-the-rest if they want to move in, putting more pressure on the middle, which in turn puts pressure on the affordable.)

Re: How Zillow's homebuying scheme lost $881M

#97

Post by cellis »

mentalpiracy wrote: post #79
paxys wrote: post #57

Earlier quoted context omitted.

Agreed. Heck I know several people who prefer to keep their condos/houses empty rather than rent them out at market rate because of 100% tenant friendly city and state laws. Someone can move in and refuse to pay rent, refuse to leave, use your house as a drug den, destroy your property and lots more, and you can do nothing about it. At that point the city is just incentivizing homeowners to contribute to the housing…

Why should we use this as an example? You’re talking about people who are throwing away money by leaving assets idle - and implying that they obviously don’t know how to operate in this market.

As a potential landlord who is doing this very thing right now, it isn't really "throwing money away", because of asset appreciation. If you get stuck with a bad tenant it's way more hassle than if you had just let it sit and AirBnB'd it every once in a while. Especially for properties where the rent is less than the appreciation per month.

Re: How Zillow's homebuying scheme lost $881M

#98

Post by [deleted] »

jliptzin wrote: post #51
paxys wrote: post #40

Earlier quoted context omitted.

One can blame Airbnb, Zillow or whoever else, but the truth is that speculation in real estate and vacation towns have both been a thing for a very long time. If the population rises and we refuse to build more houses, the existing ones will get more expensive no matter what. The solution is out there in front of us but everyone prefers to dance around it.

There's even lower hanging fruit than that. I have a 6 bedroom house, but local regulations state that I am not allowed to live with more than 2 people unrelated to me. Plenty of parking, tons of people looking for housing, but legally I am forced to keep 3 bedrooms empty.

[deleted]

Re: How Zillow's homebuying scheme lost $881M

#99

Post by pge »

aksss wrote: post #69
jliptzin wrote: post #51

Earlier quoted context omitted.

There's even lower hanging fruit than that. I have a 6 bedroom house, but local regulations state that I am not allowed to live with more than 2 people unrelated to me. Plenty of parking, tons of people looking for housing, but legally I am forced to keep 3 bedrooms empty.

I wonder if you could find exemptions for refugees. Seem to be a lot of those lately. Not ignoring the sad irony of this, but if you want to put that space to use there may some allowable loopholes.

I am working through this right now with a house that I recently bought. No way around the restrictions, but we did find one loophole. Two related families (eg two families in which the respective fathers are brothers) can live in the same house, at least under the way the restrictions are written where I live. We are able to house two refugee families in the same house legally as a result, but it's a shame that it is not easier to do, and possible with two unrelated families.

Re: How Zillow's homebuying scheme lost $881M

#100

Post by colinmhayes »

javert wrote: post #85
thr0wawayf00 wrote: post #9

The scary thing is that it's easy to see how something how like this could drive a market boom and bust cycle. I'm imagining a scenario where two iBuyer companies try to outbid each other algorithmically, driving the prices further and further out of reach of people who are looking for a primary home. Tangentially related, I talked to a friend who works on geospatial data for one of the big vacation rental companies,…

It's because US monetary policy has created an enormous transfer of wealth to the wealthy and out of the general economy. They do this by extending credit at low interest rates with the collective understanding that the value of the dollar will continue to be printed away. The wealthy (like me...) buy stuff on credit now and pay it back later with much cheaper future dollars. COVID threw a wrench in the scheme tempor…

Monetary policy and fiat currency are unequivocally good things. Deflation is what caused the 50 year recession from 1860-1910. Not being able to control inflation leads to mass unemployment.
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