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

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

#521

Post by chii » Sat, Mar 19, 2022, 6:06 AM UTC

jjav wrote: post #322

paxys wrote: post #221

Earlier quoted context omitted.

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 r…

> 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. Hoarding medicine isn't a trend and even so, this market correction doesn't happen. Look at all the medicines with insanely high prices because there won't be any competition.

Some medicines are high price because of market intervention by gov't (or regulatory capture) - like epi-pens. Some medicines are high priced because noone really needs it, and the few remaining bear the brunt of the cost (or society subsidize the cost via taxation).

How come aspirin or penicillin isn't expensive? They are more commonly used, and so if the hoarding method works, it would've been even more profitable!

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

#522

Post by [deleted] » Sat, Mar 19, 2022, 6:06 AM UTC

dangrossman wrote: post #417

lubesGordi wrote: post #157

Earlier quoted context omitted.

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…

> no one is buying a house with cash in their bank, not even rich people That's how I bought my house, and I earn less as a solopreneur than many FAANG employees in this community. My "cash offer" came with the standard proof of funds: a piece of paper the local Wells Fargo branch printed for me on their letterhead that said I have an $X balance as of that date, where $X was greater than the price I was offering for…

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

#523

Post by Ma8ee » Sat, Mar 19, 2022, 6:11 AM UTC

kortilla wrote: post #516

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.

In the US we are nowhere near land being a concern. That’s a cop-out.

The relevant metric is land within a reasonable commute to an attractive city centre.

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

#524

Post by chii » Sat, Mar 19, 2022, 6:13 AM 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…

the air rights are a bit of a red herring, because if the people in the city chooses to, they can easily abolish air rights, and allow buildings that previously sold their air rights to build it again!

And a couple of tall buildings in manhattan isn't gonna be making any difference. The difference would come from building denser everywhere.

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

#525

Post by [deleted] » Sat, Mar 19, 2022, 6:15 AM UTC

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?

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

#526

Post by chii » Sat, Mar 19, 2022, 6:18 AM UTC

sonofhans wrote: post #405

giraffe_lady wrote: post #252

Earlier quoted context omitted.

Cites are not fungible, I hate that this always comes up. I have relationships here going back to my childhood, I sometimes visit the grave of the person I am named for, I spend every sunday afternoon cooking and eating with the 97-year-old who took me in and nursed me back to health decades ago. If I move to another city these things aren't coming with. Now you can dismiss these things as inherently less meaningful…

I love your comment, and this way of thinking. > A necessity of life has become a competitive investment vehicle, and the people most hurt by this are told that it is good and correct and they should accept it by wildly upending their lives for no personal benefit. I agree also with your other comments that this view is fundamentally inhuman. So many people in this thread are responding with, “Don’t like it? Move!” T…

> Society is us. We have chosen social policy which turns the fundaments of life into investment strategies for the over-propertied. We can choose differently.

no we cannot, because it's not a choice. It's an effect. A different "choice" to have a desirable effect of your choosing is both hard, and can (and will, i bet) have undesirable consequences. A choice for example, could be to switch to a command economy instead, but i bet that would create housing projects that noone wants to live in.

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

#527

Post by markdown » Sat, Mar 19, 2022, 6:19 AM UTC

midhhhthrow wrote: post #513

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.

The problem isn’t finite land. It’s finite voters and the politicians that represent them. In CA, the most crowded state, There are more acres than people! And somehow we still have a housing shortage. You can go out into the middle of nowhere in CA and find houses huddled together 2 feet from another behind a giant wall, like some kind of nazi concentration camp for houses. And the sadest part is that there’s tons o…

LVT would fix that almost immediately.

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

#528

Post by chii » Sat, Mar 19, 2022, 6:21 AM UTC

pyuser583 wrote: post #458

giraffe_lady wrote: post #252

Earlier quoted context omitted.

Cites are not fungible, I hate that this always comes up. I have relationships here going back to my childhood, I sometimes visit the grave of the person I am named for, I spend every sunday afternoon cooking and eating with the 97-year-old who took me in and nursed me back to health decades ago. If I move to another city these things aren't coming with. Now you can dismiss these things as inherently less meaningful…

Thank you! This comes up a lot when people argue in favor reforming how real estate is taxed. When real estate isn’t for sale, it’s “value” is synthetic. I wouldn’t actually sell my house for less than 400% what similar homes are worth. For some people that means the value is 400% that of similar homes. Thankfully the real estate tax folks don’t see it that way.

I actually want tax valuation to work like an offer - the tax man can choose to purchase your home for the valuation you use for taxation (you don't pay the tax in that case), or accept the tax payment.

if you value your house too high, you'd pay more tax than you'd need of course, but guarantee that it isn't going to be immediately bought up by the tax man. If you value it too low, you're risking a sale. So the ideal is to value it at market price - where the tax man will have no incentive to actually buy it out.

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

#529

Post by bruce511 » Sat, Mar 19, 2022, 6:23 AM UTC

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…

A side effect of tenent friendly laws is that owners get more and more picky about who they rent to in the first place. It's cheaper to have a place empty for a few months than to take a risk on a potentially bad tenant.

Ultimately this is creating a class of people who can't rent. Their track record is poor - or if not them specifically they are in a group with a poor track record.

Not surprisingly this mostly affects the poorest and most vulnerable - those with the least job security - those with health/work issues and so on.

This overlaps with the group least likely to actually be able to purchase a home to begin with.

This issue will not be solved with free-market economics. Either one accepts the need for some layer of free social housing, or one accepts that a decent chunk of society will be homeless.

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

#530

Post by chii » Sat, Mar 19, 2022, 6:27 AM UTC

Firmwarrior wrote: post #345

anchpop wrote: post #291

Earlier quoted context omitted.

As a widget maker, I'm pro widget-users even though I technically have an adversarial relationship with them. In particular, I'm pro widget-users because without them I would be without money and without me they would be without widgets, so we're both supporting each other against the harsh forces of nature that would leave us all destitute if we didn't work together.

> without me they would be without widgets It seems like it'd be obvious, but landlords don't actually produce land or provide housing. They roll in and take housing using their superior resources, then charge rent to access it. In an ideal market, every renter would have the option of being a landlord just like every car lessor has the option of being a car owner. We just need enough housing supply to make investing…

> landlords don't actually produce land or provide housing

of course they do - they provide it by being part of the capital flow, which starts at construction. It might not be the same person, but it's a chain of financing that lead to the landlord purchasing the property.

Superior resources is just another name for capital. And you need capital to fund the construction. The landlord is just the last chain on this funding, and without them, the builders would not build (for who would be buying?).

Shelter is a cost. Everybody pays it, whether you own your own building or renting.

> every renter would have the option of being a landlord

they do if they had the capital. No one is stopping anyone from making a bid for a property - unlike back in the old days where people who were slaves were not entitled to own property as a right. The fact that some people have more capital and is willing to bid higher is how the current free market system works to allocate capital.