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

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

#571

Post by bawolff » Sat, Mar 19, 2022, 11:45 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…

Scarcity doesn't go away just because we wish it would.

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

#572

Post by darkerside » Sat, Mar 19, 2022, 11:46 AM UTC

tshaddox wrote: post #188

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.

> 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…

This happens all the time every day. Those rich people are pharmacies like CVS and Walgreens. They buy the medicine, stock it in smaller doses at an elevated price. It's really not that different from investors buying a property and offering it for short term rental so that people can enjoy it in small doses.

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

#573

Post by darkerside » Sat, Mar 19, 2022, 11:47 AM UTC

andrepd wrote: post #570

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…

>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.

Not so plain to the rest of us. Can you explain what makes this so evident?

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

#574

Post by bawolff » Sat, Mar 19, 2022, 11:47 AM UTC

Teknoman117 wrote: post #318

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.

The first house I lived at in California was part 2 of that - previous owners destroyed the place during a foreclosure, so we got what was previously an $800k house for $400k in a short sale by a bank. Took ~$50k to fix up because we were willing to do the work ourselves over about a year. It was disgusting . Glass and other obstructions flushed down the pipes, literal feces on the walls, holes everywhere, missing pa…

Damn. Props to you but i would rather be 400k poorer instead of doing that.

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

#575

Post by darkerside » Sat, Mar 19, 2022, 11:48 AM UTC

zamfi wrote: post #459

jasd wrote: post #448

Earlier quoted context omitted.

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.

That condo prices are staying flat is fantastic news. Now we just need to build condos that are appropriate for all stages of life -- not just young singlehood and coupledom. Building up will not solve the "not enough SFH/townhomes" problem, but it will fix the homeownership problem. And it may help with the former, if there are enough current SFH/townhome owners who would prefer a really nice condo close to work/dow…

> Now we just need to build condos that are appropriate for all stages of life -- not just young singlehood and coupledom.

Can you share some ideas about what this would look like?

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

#576

Post by bawolff » Sat, Mar 19, 2022, 11:56 AM UTC

sobkas wrote: post #561

jjav wrote: post #340

Earlier quoted context omitted.

> 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…

So you're saying that in a capitalistic society, people with capital do better? Colour me shocked.

The landlord also takes on risk and responsibility here. Like any business, if they do a shitty job they go broke. If they do a good job, they make bank and expand their business.

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

#577

Post by darkerside » Sat, Mar 19, 2022, 11:57 AM UTC

I wonder Zillow could do market making without the actually buying and selling that introduce so much of the risk. Gather into from prospective buyers about what they're looking for and identify houses that are a good fit and serve them up to the buyers. Not sure how to monetize, but this is essentially cannibalizing realtors, which is always where I thought their business model was going in the first place.

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

#578

Post by briHass » Sat, Mar 19, 2022, 12:00 PM UTC

mistrial9 wrote: post #298

tshaddox wrote: post #286

Earlier quoted context omitted.

Okay, but how deep is the appetite for buying medicine as collectibles? What if doubling the production of medicine just means that now the wealthiest 2% collects all the medicine instead of the wealthiest 1%? Not to mention, how long will it take to ramp up all this medicine production?

no, no - this is a real-estate Zillow thread BUT.. search for "pharma bros" and you will see this is not a fanciful example

Yeah, but much like housing shortages, the classic cases of 'pharma bros' (Shkreli, et. al) is due in large part to the government. He, specifically, was able to jack prices because his company owned the patents (gov issued and controlled) and manufacturing license (gov issued) to rare but important drugs.

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

#579

Post by adam_arthur » Sat, Mar 19, 2022, 12:09 PM UTC

jxm262 wrote: post #564

adam_arthur wrote: post #310

Earlier quoted context omitted.

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.

All the relevant data is on FRED

https://fred.stlouisfed.org/series/TTLHH

https://fred.stlouisfed.org/series/ETOTALUSQ176N

https://fred.stlouisfed.org/series/UNDCONTSA

Homes actively under construction is about to hit an all time high, higher than the 70s peak

Plus consider demographics. Millennial hump has passed avg home buying age, and there are demographic headwinds going forward, unless immigration policy becomes more permissive. Of course demographic impact will take decade or more to play out.

By demographic headwinds, I mean fewer young people, e.g. Inverted population pyramid. See Japan or China for how this will play out

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

#580

Post by seattle_spring » Sat, Mar 19, 2022, 12:34 PM UTC

BucketsMcG wrote: post #567

tmp_anon_22 wrote: post #439

Earlier 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.

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 t…

> 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.

Neither of these things have been even remotely true in any apartment I've lived in the US, even ones billed "luxury". It's always been thin-walled garbage where I can hear every word of every conversation of my neighbors, who have typically felt that listening to music 24 hours a day and slamming down their boots while walking between rooms is the right thing to do.