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How Zillow's homebuying scheme lost $881M

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

#201

Post by bloqs »

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,…

Fundamentally, NIMBYism and dysfunctional thinking drives this, homes cannot both be affordable and a sure good investment as a matter of definition

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

#202

Post by dataflow »

TimPC wrote: post #125
Teknoman117 wrote: post #71

Earlier quoted context omitted.

> 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. This is one of those things that really just confuses me. It's like no one could agree on happy medium between "landlord can eject you whenever they want for whatever reason" and "no one can make you leave, ever, for any reason". And to whoever downvoted yo…

These laws are hard to get actually correct. The major problem is court delays. There is a very high bar for kicking someone out before they get their day in court about whether it is fair to do so. This seems eminently reasonable but there is also a severe shortage of judicial services that result in court dates over a year out to resolve such issues. In that year of time, it's quite possible for a tenant with maybe…

How does one accumulate $500K in damages and debt in 1 year? That's like $41k/month.

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

#203

Post by georgeecollins »

thebean11 wrote: post #66
a1pulley wrote: post #62

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 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…

> 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.

>> it shouldn't happen if market forces are allowed to run their course.

Apparently you haven't met my neighbors.

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

#204

Post by 999900000999 »

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?

Let's take this to the extreme, do you think you have a right to set up a commercial kitchen in your home, and set up patio furniture for random people to show up and order take out?

Don't you see an issue of every single person decides to do this in your neighborhood, traffic being the first thing.

The other issue too, is most people are renting out apartments, and then Airbnbing them. Like, at that point it's not your property, you're just granted temporary permission to use it. Likewise, most condo boards don't want you to use your property as an Airbnb.

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

#206

Post by mywittyname »

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…

It means they have cash in a bank account ready to go. Maybe they took out a loan against other assets to obtain the cash, but a "cash offer" is literally the person is handing over a cashier's check at closing.

This means there is 0% chance of the deal falling through. Not almost no risk, none at all. Failure to follow through with the deal would be breach of contract and the buyer is liable for damages, up-to-and-including, being forced to hand over the money for the house.

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

#207

Post by closeparen »

MiroF wrote: post #149
registeredcorn wrote: post #144

Earlier quoted context omitted.

>landlord can eject you whenever they want for whatever reason I don't understand. Why aren't landlords able to do this? Isn't it seen as immoral to steal property from an owner?

> Why aren't landlords able to do this? Isn't it seen as immoral to steal property from an owner? Well, for one, the government should enforce contract neutrally - so if you sign a contract leasing your property, you can't unilaterally break this without cause. Second, we as a society have an interest in giving people time to move their stuff out and find a new place to live.

That's just a lease. Leases have fixed terms. When the lease is up either side can give 30 days notice that they will not be renewing. That is true even in places with minimal to no tenant protection laws.

In a tenant protection environment, the tenant has the option to cancel when the lease ends, but the landlord does not. Regardless of where you are in the contract cycle, the landlord's only way to end the contract is through an eviction, and he will have to prove in court that the situation meets one of the lawful bases for eviction.

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

#209

Post by gregable »

tshaddox wrote: post #188
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.

> If the population rises and we refuse to build more houses Building more houses is generally good too, but it's a bit of a cop-out to blame the whole situation on that. Totally independent of supply concerns, I would argue that it's not great that in so many areas the value of homes seems to be almost entirely divorced from the fact that people need homes to live in . Imagine if a bunch of very wealthy people just…

Yes, and this would really be awful in the short term, but in the medium term medicine companies would just spin up more production until the "very wealthy people" demand has been met and medicine becomes available again at some reasonable price.

The fact that this is very likely prevents most of the speculation in the first place.

The difference with real estate is that the owners get to determine production levels, via local zoning laws.

Sure, there is some natural scarcity: Land cannot be created, but in most cases artificial scarcity is the issue.

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

#210

Post by a1pulley »

ryandrake wrote: post #123
a1pulley wrote: post #62

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 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…

> > 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…

To be fair, it's doable as a senior or staff engineer at a big company earning 300 to 500k/yr. I'm (lucky enough to be) in that range and qualified for a $1.5M loan. Combined with 500k for a down payment, you can see how those $2M houses are technically affordable. For now.

Income data always lags reality by a couple of years: in my experience, a lot of people have a lot more money than you'd think. The winners of the eight purchases I've attempted have been young dual income professional families.

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