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How Zillow's homebuying scheme lost $881M

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

#221

Post by paxys »

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…

Thing is if people start hoarding medicine then new companies can pop up and fill in the gap, or existing ones can increase production, making the whole thing pointless to do. Same goes for every other "necessary to life" product. Temporary disruptions will be handled by the market in the long term, and in the worst case government can step in and regulate. Housing is probably the only sector where all the laws and regulations work the other way – to actively stop you from building more of something that everyone needs.

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

#222

Post by projektfu »

harikb wrote: post #35
dpierce9 wrote: post #13

Anecdote on the estimates. We bought a house for X and renovated it. The day before we listed it both Zillow and Redfin estimate had an estimate around the purchase price X. When we listed it for 2X, both companies changed their estimate to be close to the listing. However, Redfin changed the entire price history as well showing a gentle slope. Zillow preserved their previous history and showed a spike.

+1 I have always been annoyed by Redfin's rewrite of history. At least have the decency to show two lines (original prediction for last year and how it turned out to be).

I am guessing they don't save the price history as snapshots. They have the current estimate, and then they walk it back in time from the market averages.

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

#223

Post by escapedmoose »

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…

We took the same approach with our house, and the results were marvelous. Major props to our realtor for seeing the potential hidden in those god-awful listing photos.

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

#224

Post by jsnk »

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…

This analogy is quite lacking.

You should also mention that this medicine rich people are collecting also has dozens of other alternative medicines with hundreds of thousands in volume because other cities exist.

Also you should mention that some of these rich people are not rich people at all, but working class people who's lived in a location for decades which has become a desirable location in recent years thanks to some other people who generated wealth in the area.

Also you forgot to bring up the local government ran by some of these rich people who are blocking any measure to increase the supply of the medicine in the area. This certainly can crash the entrenched medicine cartel in the city, but some of these cities are North Korean style de facto one party system where no other opposition may challenge the status quo.

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

#225

Post by cyberpunk »

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,…

Yep. You should see the situation in beautiful yet remote places like the Isle of Skye in Scotland or the Outer Hebrides. If you have some land, it's a no brainer to build a holiday rental. A pre-fab will cost you maybe 120k (after the land) and it's k/week or more during peak season to rent it out.

Of course, it means prices are going insane. A complete wreck of a house we were interested in buying and turning into an actual home which I thought would be worth max 200k went for 450, cash, from a buyer who never even saw it.

They'll tear it down, stick a new house on it, and make their investment back in 5 years.

Meanwhile, all the locals kids, go away and don't come back. What is there for them there anymore? Not a lot.

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

#226

Post by bduerst »

mywittyname wrote: post #174
JKCalhoun wrote: post #68

Earlier quoted context omitted.

Not sure why the article goes to such lengths to legitimize "Corporate flipping", calling it iBuying or whatever. No matter what terminology you use, buyers without cash-in-hand are getting screwed.

> No matter what terminology you use, buyers without cash-in-hand are getting screwed. "Cash is king" is a common phrase in real estate for good reason. In pretty much all instances, a cash buyer has a leg up over everyone else. In a liquidity crunch, cash buyers get discounts because people can't get loans; in hot markets, they get discounts because they can wave contingencies; in cool markets, they get discounts be…

This hasn't always been the case with real estate though. The market used to be much more accessible, and tech bubbles overlapping into it are just further destroying it.

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

#227

Post by wpietri »

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.

Agreed, but there are big structural barriers. We generally want necessary goods to have stable or decreasing prices over time. But in America, we encourage home ownership as an investment. For many, their biggest investment. That creates a big constituency who want housing prices to go up. But we also want people, especially those just starting out, to have affordable housing.

We can't have housing be both affordable and a good long-term investment. We need to pick. And given increasing prices and how 65% of Americans are howmeowners, I think we already did.

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

#228

Post by mywittyname »

ffwszgf wrote: post #190
kevin_thibedeau wrote: post #87

Earlier quoted context omitted.

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.

Isn’t luxury the only thing that’s even allowed to be built in most NIMBY cities? Try building large “market-rate” housing in Palo Alto and see what happens (even within the confines of their already ridiculous zoning laws).

It's luxury almost everywhere.

The only place cheaper housing is being built are in developments on the far outer suburbs of flyover cities. But even those builders are having trouble with supplies and labor.

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

#229

Post by dijonman2 »

MiroF wrote: post #143
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…

> 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". No place in the US actually has the latter unless you've been letting them squat for half a decade or something, the issue is court delays and landlord's wanting to make their lot out to be worse than it is.

It’s very difficult to evict folks in Colorado, according to someone I know who buys and rents homes for a living.

I think most landlords are pro tenant until they find someone who knows how to work the system. It costs them so much that they are skiddish to all renters.

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

#230

Post by projektfu »

devoutsalsa wrote: post #193
sokoloff wrote: post #48

Earlier quoted context omitted.

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.

I will buy your put on an overpriced house!
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