How Zillow's homebuying scheme lost $881M • Hacker News Board

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

#441

Post by dionidium » Fri, Mar 18, 2022, 11:30 PM UTC

Retric wrote: post #440

dionidium wrote: post #431

Earlier quoted context omitted.

There's no evidence for this claim. It's a popular thing to say, so I think it must feel true for a lot of people, but there's no evidence for it and simple arithmetic suggests that it's a red herring. The fact is that vacancies in NYC are historically very low and reached new all-time lows in Manhattan at the end of last year. People love the "investors and billionaires are buying up the market" story because it sug…

That’s an odd takeaway from an article speaking of a 22+ rent from increase due to COVID bounce-back. Ultra short term trends aren’t particularly relevant compared to long term trends. One clear the example of the outsized impact is these buildings bought up air rights from multiple properties. So, they reduced the legally available space. When the city makes space for ~100,000 apartments and actually gets less than…

What we're seeing is a return to the long-term trend. Vacancies in Manhattan have hovered around 2% for a long time.

See: https://www.millersamuel.com/files/2022/02/Feb22QNSrent-nyVA...

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

#442

Post by beezle » Fri, Mar 18, 2022, 11:36 PM UTC

Zircom wrote: post #263

dataflow wrote: post #202

Earlier quoted context omitted.

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

Some people don't take kindly to being kicked out, even if they're in the wrong, and there's not a lot you can do to stop them from causing hundreds of thousands in damages while you go through the process of evicting them.

Was told by local sherrif who handled judgment related asset seizures as well as foreclosure sales that in our state the original owner can do as they wish, even after a court ordered foreclosure sale, until they day they are required/made to vacate. He had seen all kinds of wanton destruction by the outgoing former owners simply out of spite with repair bills likely in the 10s of thousands, if not more.

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

#443

Post by jfoster » Fri, Mar 18, 2022, 11:40 PM UTC

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.

The problem is adversarial. If real estate were more affordable, what of those who have invested in it?

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

#444

Post by davidw » Fri, Mar 18, 2022, 11:40 PM UTC

tmp_anon_22 wrote: post #439

pj_mukh wrote: post #427

Earlier quoted context omitted.

Land is a finite resource but housing units are not. Once America gets over it’s love affair with single family homes, we could undercut most speculators by just building up.

Single Family homes have the benefit of more autonomy where as building up means you're living on-top of your neighbor, its not binary but we should acknowledge the clear QoL tradeoffs of condensed living. Maybe its inevitable and necessary to force more people into condensed housing, maybe the societal benefits really outweigh the tradeoffs.

No one's "forcing" anything. Legalize the housing, and if no one wants it, it won't be built. The problem is that it's not legal in so many places.

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

#445

Post by philjohn » Fri, Mar 18, 2022, 11:41 PM UTC

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…

And that's why I live in Rugby.

Large 5 bed detached house in a quiet cul-de-sac, good sized garden, ample parking on the driveway for 4 cars if needed, and well under £1m.

Train to London Euston takes 49 minutes and whilst the season ticket isn't cheap (nearly £10k) you're still coming out ahead with the lower cost of living.

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

#446

Post by tunap » Fri, Mar 18, 2022, 11:41 PM UTC

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.

"...the truth is that speculation in real estate and vacation towns have both been a thing for a very long time."

Eh, in the US, it was limited by the Glass-Steagal protections enacted after the speculators ruined the world economy almost 100 years ago. We can thank the 'Modernisation Acts' of 1999/2000 and QE for the economic rollercoaster in the US(so goes the world?) for the last 20 years in housing, energy & metals.

https://en.wikipedia.org/wiki/Glass_Steagal

https://en.wikipedia.org/wiki/Gramm%E2%80%93Leach%E2%80%93Bl...

https://en.wikipedia.org/wiki/Commodity_Futures_Modernizatio...

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

#447

Post by davidw » Fri, Mar 18, 2022, 11:42 PM UTC

gregable wrote: post #209

tshaddox wrote: post #188

Earlier quoted context omitted.

> 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,…

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

I'm part of a local YIMBY group, and show up to hearings to try and get housing built, write letters, etc...

I have never, ever seen 'investors' write in or speak at these things. It's all our neighbors who show up and scream about not building homes.

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

#448

Post by jasd » Fri, Mar 18, 2022, 11:45 PM UTC

pj_mukh wrote: post #427

3np wrote: post #401

Earlier quoted context omitted.

This is missing the point that land is a finite resource and homes aren't fungible. It doesn't help most Californians that more homes can be built in rural Arkansas.

Land is a finite resource but housing units are not. Once America gets over it’s love affair with single family homes, we could undercut most speculators by just building up.

In the last 2 years condo prices in the Seattle area have stayed flat while everyone is desperate to buy townhomes and single families that are becoming out of reach for most. That makes me wonder if building up will actually fix the issue.

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

#449

Post by [deleted] » Fri, Mar 18, 2022, 11:48 PM UTC

tmp_anon_22 wrote: post #439

pj_mukh wrote: post #427

Earlier quoted context omitted.

Land is a finite resource but housing units are not. Once America gets over it’s love affair with single family homes, we could undercut most speculators by just building up.

Single Family homes have the benefit of more autonomy where as building up means you're living on-top of your neighbor, its not binary but we should acknowledge the clear QoL tradeoffs of condensed living. Maybe its inevitable and necessary to force more people into condensed housing, maybe the societal benefits really outweigh the tradeoffs.

[deleted]

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

#450

Post by Zircom » Fri, Mar 18, 2022, 11:53 PM UTC

beezle wrote: post #442

Zircom wrote: post #263

Earlier quoted context omitted.

Some people don't take kindly to being kicked out, even if they're in the wrong, and there's not a lot you can do to stop them from causing hundreds of thousands in damages while you go through the process of evicting them.

Was told by local sherrif who handled judgment related asset seizures as well as foreclosure sales that in our state the original owner can do as they wish, even after a court ordered foreclosure sale, until they day they are required/made to vacate. He had seen all kinds of wanton destruction by the outgoing former owners simply out of spite with repair bills likely in the 10s of thousands, if not more.

That's a little different than a tenant who is renting wrecking someone else's property though, as the sheriff said in the case of foreclosures it's still their property up until the forced vacate date and they can technically do whatever they want and can't be sued for the damages, whereas tenants can but in most cases it's simply not worth it because the people you're suing usually don't have any assets or positive net worth in the first place.