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How Zillow's homebuying scheme lost $881M

fullstackeconomics.com

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

#471

Post by jgod »

noasaservice wrote: post #311

And a solution is exponential taxation for properties not being lived in by the buyer. I'm done and tired of vulture capitalists and all sorts trying to make bank on where to live. I'm sick of landlords looking for shitty almost-passive income while I build them equity. Fuck'em all. I want this "industry" to die in a pit of firey death.

Can start with people who aren't citizens (overseas "investors"), and then people who may be citizens, but don't have the country as their primary residence. And then beyond a certain number / distance (discourage absentee landlords).

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

#472

Post by karlkatzke »

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.

What’s funny is how much property values and rent have risen in the US in 2020 to 2022, when population growth has been flat due to Covid. (Population has increased 1 million in that time, from 331.5 million to 332.5 million.) obviously, newborns aren’t buying houses, but the excess deaths (not to mention early retirements requiring around the clock care) were entirely due to Covid and should have opened up a number of properties for first time homebuyers.

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

#473

Post by boondaburrah »

jasd wrote: post #448
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.

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.

There are plenty of cities worldwide where building up has worked. Regardless, if buying a town home or single-family has become out of reach, it's far better to have /something/ to live in rather than be forced to fight the market for a small box in a high-rise that you still can't afford.

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

#474

Post by wyago »

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.

Likewise, why would you suppose that market forces are running their course?

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

#475

Post by wyago »

999900000999 wrote: post #237
BirdieNZ wrote: post #231

Earlier quoted context omitted.

> 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? You can do this in Japan. Why shouldn't you be able to do this?

Japan doesn't have nearly as many cars per capita. Regards you can't just ignore zoning laws because you feel like it.

It's a bit strange to give Japan's lower cars per capita as a rationale for this, when surely the reason there are fewer cars per capita is because people have access to their daily necessities without a car because of more permissive zoning.

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

#476

Post by sib301 »

phlowbieuq wrote: post #362
encoderer wrote: post #21

I was at Zillow for many years and left in 2020. On the tech side the pivot into iBuying was absolutely bonkers. The message from senior leadership was basically: I have no idea what your teams should be working on but it’s definitely not what they are currently working on so stop that and figure something else out. This has nothing directly to do with their market failure but they probably are driven by the same lea…

i wish we lived in the same area and could have an OTR conversation about this. believe it or not, the new "strategy" now that ZO is all shut down is even less well-defined and more pie-in-the-sky than ZO ever was.

Please share!

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

#477

Post by qiskit »

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.

> If the population rises and we refuse to build more houses, the existing ones will get more expensive no matter what.

Mix in low interest rates and you get a major property bubble. Population growth and low interest rates are the two major predictors of housing price increases.

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

#478

Post by refurb »

giraffe_lady wrote: post #398
endisneigh wrote: post #370

Earlier quoted context omitted.

Yes? Do you think the house magically takes care of itself?

This comment made me see red, seriously the maddest I've been in weeks. You couldn't have known that and I'm not upset at you. _I_ take care of the house in this situation. The landlord doesn't shovel snow or mow grass, I do. They do carry some of the burden specifically in taxes and liability, yes I know. I also know the maintenance responsibilities aren't inherently and legally mine, and so I can be blamed for ente…

If the roof need replacing do you replace it? How about if the sewer line collapses?

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

#479

Post by WindyLakeReturn »

davidw wrote: post #447
gregable wrote: post #209

Earlier quoted context omitted.

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.

Could this be a side effect of efficiency? Much more efficient for the investors to push for the ideas that lead to local homeowners showing up to protest than to protest themselves.

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

#480

Post by quesera »

giraffe_lady wrote: post #364
endisneigh wrote: post #352

Earlier quoted context omitted.

Should doctors work for free? Should farmers?

Do landlords labor?

> Do landlords labor?

Yes they absolutely do. Sometimes quite a lot, and often invisibly to tenants.

But other landlords suck, yes definitely. Just like some business owners neglect their customers, and some parents neglect their children.

The problem is that the RE market is so distorted right now that it's difficult to select a new equivalent housing provider at a reasonable price. This is also what enables the bad landlords in the first place.

The blame for that situation is very well-distributed. The best response as a buyer might be to seek out other markets.

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