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How Zillow's homebuying scheme lost $881M

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

#191

Post by itsoktocry »

cuteboy19 wrote: post #177
999900000999 wrote: post #167

Earlier quoted context omitted.

Honest to God, the founders of Airbnb should have been sent to prison. That would have fixed much of this, it's point blank illegal to run a bed and breakfast out of your home. Now if you're my buddy, and you want to slide me $200 to crash at my house for a week that's fine, but if you add technology to it, it ends up destroying entire neighborhoods. Ride-sharing is a bit different, since I'd argue the reduction in d…

> That would have fixed much of this, it's point blank illegal to run a bed and breakfast out of your home. Why? It's your home, you can do anything in it. Why should you need a license to rent out your own home for a few days? Does it physically destroy neighborhoods or just your perception of it? If so, why should anyone care?

>Why? It's your home, you can do anything in it.

No, you aren't free to do "anything" in your home, including provide commercial services if not properly zoned and insured.

>Why should you need a license to rent out your own home for a few days?

This is not what's happening in many places. AirBnB went from "a place to crash" to an amateur hotelier platform.

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

#192

Post by mywittyname »

cuteboy19 wrote: post #177
999900000999 wrote: post #167

Earlier quoted context omitted.

Honest to God, the founders of Airbnb should have been sent to prison. That would have fixed much of this, it's point blank illegal to run a bed and breakfast out of your home. Now if you're my buddy, and you want to slide me $200 to crash at my house for a week that's fine, but if you add technology to it, it ends up destroying entire neighborhoods. Ride-sharing is a bit different, since I'd argue the reduction in d…

> That would have fixed much of this, it's point blank illegal to run a bed and breakfast out of your home. Why? It's your home, you can do anything in it. Why should you need a license to rent out your own home for a few days? Does it physically destroy neighborhoods or just your perception of it? If so, why should anyone care?

Because it's the law. Whether or not you agree with the law is irrelevant.

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

#193

Post by devoutsalsa »

sokoloff wrote: post #48
Invictus0 wrote: post #36

I wonder how this would have ended up if they just dealt in options instead of taking on the inventory. For those that don't know, a real estate option gives the holder the right to buy the property at a fixed price within a certain timeframe, in exchange for a premium. This would have been a much better way to learn the market than diving straight into home purchases.

Most people who are selling their house are doing so in order to buy another one. That is to say they need the money from the sale to close on their other house. Selling an option on a house you live in is a pretty terrible idea since if the market takes off, your option gets called, you're out of a house and into a market that's skyrocketing. I don't think there's enough benefit to sellers to make buying options fea…

Now I want to sell puts on over priced houses.

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

#194

Post by [deleted] »

Cederfjard wrote: post #163
MiroF wrote: post #136

Earlier quoted context omitted.

You're not a liberal if you're casually violating fair housing law :) Everyone wants to call themselves a liberal or progressive nowadays, it's bizarre. These things are about actions, not self-assigned labels.

Just curious as an outsider, what laws are she breaking by doing that?

[deleted]

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

#195

Post by thelock85 »

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.

That speculation is being scaled/super-charged through technology, and making the proposed solution to build more harder, in part because an increase in corporate landlording dilutes the political power of regular homeowners.

I'm really trying to think of reasons why a PE market maker that just bought a sub-division would want to build more and depress their future rents (unless the area has massive population growth).

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

#196

Post by PaulDavisThe1st »

lubesGordi wrote: post #157
ryandrake wrote: post #123

Earlier quoted context omitted.

> > 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 > I live in Los Angeles, where a "small place in semi-desirable area" gets listed for 1.5M and goes for nearly 2M. I'm somewhere in the top 5% of earners in California, but that $2M 1950s tract housing would be >50% of my post-tax income. I think the obvious answer here is that peo…

I'm under the impression that 'cash offer' just means that whoever is buying has already secured their financing. That means there's almost no risk of the deal falling through and the sale can go from contingent to pending immediately. This is better for the buyer because they sell faster. Senior software eng at microsoft can pull this off no problem (no one is buying a house with cash in their bank, not even rich pe…

Your impression is wrong. "Cash offer" means there is no 3rd party loan involved. Obviously, if someone's aunt is lending the buyer money, nobody is going to catch that. But "cash offer" absolutely does not mean "secured financing".

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

#197

Post by tshaddox »

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…

> A thought exercise: suppose that no new houses are ever built and that housing turnover is nearly zero. What happens to the price of housing in that limit? Market forces do not necessarily entitle the top n% of the income distribution to housing.

I don't think it's disturbing because "clearly the top 2% of income earners should be entitled to housing," but because clearly everyone needs housing, and if the top 2% of earners can't even afford it, that means it's even worse for everyone else.

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

#198

Post by kuboble »

cuteboy19 wrote: post #177
999900000999 wrote: post #167

Earlier quoted context omitted.

Honest to God, the founders of Airbnb should have been sent to prison. That would have fixed much of this, it's point blank illegal to run a bed and breakfast out of your home. Now if you're my buddy, and you want to slide me $200 to crash at my house for a week that's fine, but if you add technology to it, it ends up destroying entire neighborhoods. Ride-sharing is a bit different, since I'd argue the reduction in d…

> That would have fixed much of this, it's point blank illegal to run a bed and breakfast out of your home. Why? It's your home, you can do anything in it. Why should you need a license to rent out your own home for a few days? Does it physically destroy neighborhoods or just your perception of it? If so, why should anyone care?

It's because whatever you do in your house is affecting everyone around it. So you making little extra money is taking value away from everyone else in your neighborhood. The fact that you don't know anymore everyone in your block is hugely affecting safety and let alone extremes like your airbnb guests getting loud, throwing trash around, making parties etc.

In my area we have a legal agreement between all apartment owners that things like this are not accepted.

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

#199

Post by MiroF »

Cederfjard wrote: post #163
MiroF wrote: post #136

Earlier quoted context omitted.

You're not a liberal if you're casually violating fair housing law :) Everyone wants to call themselves a liberal or progressive nowadays, it's bizarre. These things are about actions, not self-assigned labels.

Just curious as an outsider, what laws are she breaking by doing that?

Civil Rights Act of 1968, Unruh Civil Rights Act, ... there are a few other California specific legal statutes around civil rights/housing discrimination.

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

#200

Post by PaulDavisThe1st »

lordnacho wrote: post #49
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,…

This has perplexed me as well. Here in the UK, the top 1% of incomes is £175K. Assuming the bank lets you borrow 5x, and you're married to someone with a more middling income, you can borrow ~£1M. Yet there's a ring around London where it's hard to see any family homes that are under £1M. I mean sure maybe they're sitting on equity or mom and dad are contributing, but by my estimation there are a huge number of peopl…

Hence the absurd govt-backed "buy-and-rent-to-buy" schemes that the UK has seen showing up over the last decade.
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