Earlier quoted context omitted.
You missed better location
Better location =/= more valuable location
why not?
How Zillow's homebuying scheme lost $881M
501–510 of 684 posts
Re: How Zillow's homebuying scheme lost $881M
#502The 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. Top 5% puts you at over $300K/year. Top 2% is much higher. Even a top 5% person can easily afford a house in any semi-desirable city. LA, Bay Area are not semi-desirable. They are highly desirable.
They did say in their generation which could basically mean anything at that point
Re: How Zillow's homebuying scheme lost $881M
#503I am especially annoyed at Zillow SF holding "Data Science" meetups in San Francisco at the penthouse place, while advertising for TWO data science positions.. meanwhile, frat guys are at the golf course by the dozens, across three states. The people that they hired at that time, probably built this setup exactly as required by the frat guys. Happy banking Zillow!
There's some poetry in older banks claiming they're pivoting to being tech companies (i.e. Capital One) while some tech companies are heading straight towards being banks.
It was surprising to me to learn that airlines are basically banks
https://www.reddit.com/r/urbanplanning/comments/rgkne9/how_a...
Re: How Zillow's homebuying scheme lost $881M
#504Earlier quoted context omitted.
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...
Which shows how important a seemingly small number of long term unoccupied apartments are.
Another way of looking at 2% vacancy is over 20 years an apartment is vacant less than 5 months. People move, die, go to prison etc, so there is some inherent friction represented in a 98% occupancy rate. Dropping to 1% long term takes more than just higher demand it would require increases in transaction efficiency.
Re: How Zillow's homebuying scheme lost $881M
#505Earlier 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.
There's even lower hanging fruit than that. I have a 6 bedroom house, but local regulations state that I am not allowed to live with more than 2 people unrelated to me. Plenty of parking, tons of people looking for housing, but legally I am forced to keep 3 bedrooms empty.
But what does enforcement look like?
Re: How Zillow's homebuying scheme lost $881M
#506Earlier quoted context omitted.
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.
what is ZO?
Zillow Offers. The name of the iBuying service the company provided. (Former Zillow myself, as of a couple of weeks ago.)
Re: How Zillow's homebuying scheme lost $881M
#507Earlier quoted context omitted.
AB1482 is statewide and covers most rental stock. Units built in the last 15 years are exempt. Single family homes are exempt, but only if explicitly included in the lease (plenty of landlords got bit by this in 2020 - no notice to tenant, automatically covered by rent control/eviction control). This is both rent control and eviction protection. You cant be evicted without “just cause” - all leases automatically roll…
It only applies to homes owned by a corporation, you are incorrect that most properties are not exempt.
Most properties aren't exempt.
Any multi-family older than 15 years falls under rent control and eviction control. Considering how little housing is built in CA, that's a huge number of housing units.
When it comes to single family homes, you are correct that they are eligible to be exempt if they aren't owned by a corporation. However, landlords had to give notice back in 2020 to current tenants for that property to be exempt. Notice can't be retro-active, so a wide swath of single family homes that were rented at the time are under rent and eviction control now.
Of course if the tenant leaves, there is an opportunity for the property to be exempt again.
That said, if you don't think the screws will slowly be tightened on AB1482, you're out of your mind. Just like in the major cities they'll be a bunch of "updates" to the law to the point San Francisco style rent control is state wide.
Re: How Zillow's homebuying scheme lost $881M
#508Earlier quoted context omitted.
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.
The invisible hand is sometimes a fist.
Re: How Zillow's homebuying scheme lost $881M
#509Earlier quoted context omitted.
In areas where home prices are high, the vast majority of homes have people living in them. So the idea that home prices are inflated by people buying homes and not doing anything with them seems a bit suspect to me. Additionally it kind of strains belief that people are buying homes, paying property tax, etc. just because they like collecting them the way a kid likes collecting pokemon cards. More likely they'd buy…
> In areas where home prices are high, the vast majority of homes have people living in them. When the very rich park wealth in real estate, it is precisely in the ares where prices are highest. Not much point in parking wealth in a cheap house in the midwest. https://nypost.com/2021/08/05/nearly-half-of-luxury-units-em...
If the rich are parking their wealth in real estate, you can take their wealth via property taxes. Many of the places with this problem choose to have low taxes on real estate, which is part of what makes it such a good investment and drives the price up.
Re: How Zillow's homebuying scheme lost $881M
#510Some twitter threads from Zillow insiders I saw around this referenced a couple things: * the pricing algorithm was good, but the business leadership got hungry and kept overriding it with higher offers in the hunger to do more business. * they were trying to do so much business that they couldn't source the labor need to flip - painting, landscaping etc. They were so backlogged they were just sitting on houses they…
When you hire at a growth rate the workers will find work to do whether or not it helps your business. In this case I could see a bunch of home buyers being hired and justifying their jobs.