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

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

#561

Post by sobkas » Sat, Mar 19, 2022, 10:52 AM UTC

jjav wrote: post #340

giraffe_lady wrote: post #260

Earlier quoted context omitted.

Landlords have chosen to enter an inherently adversarial relationship with the goal of profiting from the other party. I'm not entirely unsympathetic to their personal pains here, but I don't believe "pro tenant" has a useful meaning except in a context where you need to support them in opposition to some force or entity. And that entity is landlords.

> Landlords have chosen to enter an inherently adversarial relationship with the goal of profiting from the other party. There isn't any reason for it to be adversarial, it's certainly not inherently so. Only if one or both sides want to make it adversarial. It is supposed to be a win-win scenario. Some people prefer to rent instead of buying, so they need a supply of rentals and the owner needs someone to live there…

> > Landlords have chosen to enter an inherently adversarial relationship with the goal of profiting from the other party.

> There isn't any reason for it to be adversarial, it's certainly not inherently so. Only if one or both sides want to make it adversarial.

Landlords compete with their potential tenants for houses to buy. When landlord driven price increase, it prices out people from buying a home/flat, but they still need a roof over their heads. So they rent. This gives landlords cash needed to buy more houses/flats. This also keep rents up as landlords pay more for buildings. So tenants are less likely to accumulate cash for loans/something else. From small owners to big corporations it is a vicious cycle.

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

#562

Post by samwillis » Sat, Mar 19, 2022, 10:56 AM UTC

With the articles reference to second had car sales it interesting to compare to British Car Auctions (BCA) here in the UK. They have something like a 60% market share on second had sales, they are completely dominant as the central “trading house” for second hand sales. Most second hand car forecourts are buying a significant portion of their cars from a BCA auction.

The other thing they have which compares to what Zillow were doing is webuyanycar.com. It is literally what it says, you get a quote from their site to value it, go to their location and they buy your car. When I did it I was there for just 7 minutes, easiest car sale ever! And they payed be nearly 1k more than anyone else.

They are truly the market makers with this system, ensuring a steady stream of cars into their auctions. Have full visibility in real time of the pricing on both sides and are only holding the cars for about one week.

Some argue that they were a major contributing factor to the used car price inflation last year (on top of the issues with new car availability).

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

#563

Post by moonchrome » Sat, Mar 19, 2022, 10:59 AM UTC

bastawhiz wrote: post #517

TomVDB wrote: post #369

Earlier quoted context omitted.

I’m surprised you have an issue with arranging visits to open houses? Open RedFin, check the houses for sale, go to the open house when there is one? That’s at least how it works in the Bay Area. We never had to schedule or book anything, and only after seeing a house we liked, we asked our agent to check it out and submit an offer.

The house I bought was listed for two weeks. They had one day of showings. The following day they stopped accepting offers. Maybe it's different in the Bay, but here in Raleigh houses are available to tour for essentially eight hours.

The alternative being to ask above market the house so it sits on the market for longer ? I don't understand what Zillow changes in this story ? (I'm genuinely curious - not from US)

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

#564

Post by jxm262 » Sat, Mar 19, 2022, 11:05 AM UTC

adam_arthur wrote: post #310

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.

Number of housing units to households is the same as year 2000. 1.1:1 So the undersupply story is a myth. There has been a recent pull forward in demand that ate through all active listings though.

Im genuinely curious to read more on this. Know of a source for that number or some resources I can try to research on the topic? I just mostly see people reaching for conclusions but see very little data to back it up.

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

#565

Post by sobkas » Sat, Mar 19, 2022, 11:06 AM UTC

endisneigh wrote: post #420

giraffe_lady wrote: post #398

Earlier quoted context omitted.

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 you honestly believe being a landlord is such a slam dunk you should take out a mortgage, buy a property somewhere in United States (there are places as cheap as $50K) and rake in the cash. There are landlords who absolutely take care of all of the maintenance - and of course there are landlords who are absentee landlords as well. To say a landlord inherently doesn't do anything is the most ridiculous thing I've r…

> If you honestly believe being a landlord is such a slam dunk you should take out a mortgage, buy a property somewhere in United States (there are places as cheap as $50K) and rake in the cash.

I'm sorry, but I am not sociopathic enough to profit from other people misfortune (not being able to to buy a roof over their heads). Not everything is about making as much money as you can squeeze from other people.

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

#566

Post by qeternity » Sat, Mar 19, 2022, 11:18 AM UTC

ohgodplsno wrote: post #557

qeternity wrote: post #553

Earlier quoted context omitted.

The reality that almost never gets brought up is that the other side of the coin is that these are natural pressures that are probably healthy. We know that any given habitat, like the Earth, has finite resources and has some upper bound to supporting life. This is how those pressures manifest. We can’t just keep growing the population and have everything be affordable. Surging food, energy and housing prices are the…

People not being able to own homes is not "healthy". Having to pay 50% of your salary to landlords is not "healthy". It is concentration of wealth, it is the very definition of precarity. Unless your hope is to see a collapse of societies, things go really bad when people can't afford fundamental needs.

You replied without understanding my comment. Let me pose the question back to you: if everyone can comfortably afford food, housing and basic necessities, what is going to cause population growth to level off?

Your characterization of bad things happening is exactly my point - you’re just failing to understand that I’m saying that’s the healthy part.

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

#567

Post by BucketsMcG » Sat, Mar 19, 2022, 11:28 AM 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.

As far as I'm concerned the quality-of-life tradeoff heavily favours higher-density housing.

I live in an apartment block and so does everybody else for miles around. Our building, like almost every other around here, tops out at seven storeys. It's very solidly constructed, so there's little to no noise from neighbours, not that they make much noise to begin with as they're a pretty considerate bunch.

The downside to this way of living is almost nonexistent, but the upside is massive. Instead of everybody having their own plot of land that's too small to do anything really interesting with, and which they have to maintain themselves, we have a communal garden. When that's not enough, there are no less than four parks within two minutes' walk.

Because this higher density of living is able to sustain more amenities, everything you could possibly ever need is, at most, a short bike ride away. And I do mean everything. Bars, restaurants, shops, medical facilities, swimming pools, a velodrome, a planetarium...

I've no need of a car because it's all on my doorstep. If I do need to travel, public transport's great.

You can keep your "autonomy", I'll be too busy reaping the benefits of living among other people to worry about that.

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

#568

Post by lotsofpulp » Sat, Mar 19, 2022, 11:32 AM UTC

samwillis wrote: post #562

With the articles reference to second had car sales it interesting to compare to British Car Auctions (BCA) here in the UK. They have something like a 60% market share on second had sales, they are completely dominant as the central “trading house” for second hand sales. Most second hand car forecourts are buying a significant portion of their cars from a BCA auction. The other thing they have which compares to what…

> Some argue that they were a major contributing factor to the used car price inflation last year (on top of the issues with new cad availability).

And they would be wrong. Market makers do not get to set prices, supply and demand does.

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

#569

Post by daniel-cussen » Sat, Mar 19, 2022, 11:38 AM 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.

And commensurately there's a tight relationship between the percentage of income spent on rent (often cited as a third, it used to be less than half that), and the percentage of people on the street.

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

#570

Post by andrepd » Sat, Mar 19, 2022, 11:40 AM UTC

paxys wrote: post #221

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…

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…

>Temporary disruptions will be handled by the market in the long term

This is the sort of gospel/dogma that free market absolutists like to propagate, but plainly reality proves this wrong. Markets are a tool, but not a universally useful one.