Zillow seeks to sell 7k homes for $2.8B after flipping halt • Hacker News Board

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#161

Post by bcrosby95 » Tue, Nov 02, 2021, 3:31 PM UTC

long_time_gone wrote: post #135

cletus wrote: post #97

Earlier quoted context omitted.

> We really don't have any direct, past precedent for this type of situation Yeah, we do. Massive housing speculation in the mid-2000s. > The fact that Zillow failed on their initial attempt does not imply that this can't work I'm reminded of Gamestop here. Around the time $GME first spiked and then fell you saw lots of people trying to encourage everyone to hold. What this ignored is that someone would be left holdi…

> But I also firmly believe that the prisoner's dilemma and human psychology will limit the impact of institutional real estate buying just as in any other market. Possibly. Real estate is different than most other markets for a few reasons. Favorable tax treatment, sheer market size, high barriers to entry, and being at the bottom of the hierarchy of needs. I'm worried if this isn't the inevitable path of concentrat…

> Stocks have grown too over-valued? Move to housing, a gigantic market that people require to survive.

This is kinda what happened in the 00's housing bubble. Tech crashed and people looked at housing as the next big investment. It feels like we just have groups of people going from bubble to bubble.

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#162

Post by Kalium » Tue, Nov 02, 2021, 3:31 PM UTC

HWR_14 wrote: post #156

Kalium wrote: post #56

Earlier quoted context omitted.

> The schadenfreude is real for me seeing this. A company like Zillow getting into flipping seems questionable to me. The customers are no longer aligned with the company on goals with something like this. It's like when the realtor offers to buy your house... they obviously feel like they can make more than you, when they're supposed to represent you! I've personally dealt with selling real estate within the past ca…

Where do you live that it takes "months upon months" to close a sale? Usually the complaint is that the market moves so fast people have to make risky snap purchasing decisions.

A national average is about two months, from what I can find, depending greatly on where you are and what you're selling. That standard deviation can be quite a pain. It's certainly challenging to plan around an unknown and potentially unbounded number of months. The ability to make that into a known number might thus be valuable to some people in some situations.

You're absolutely right, of course. There's no shortage of stories about markets moving fast! That said, it's been my personal experience that people don't generally share their stories about a house or condo moving slow. Perhaps complaints and stories might not be an ideal guide to reality in this instance?

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#163

Post by whimsicalism » Tue, Nov 02, 2021, 3:32 PM UTC

nradov wrote: post #149

whimsicalism wrote: post #79

Earlier quoted context omitted.

Yes, that - plus the rapid reversal of white flight to the suburbs among young people in the last 10-15 years (more of an east coast phenomena). It is both a demand and supply problem, but short of creating a Hukou system I don't see any solution but building.

Another solution would be encouraging economic development in other areas instead of cramming increasing numbers of people into a small number of geographically constrained cities.

I think these returns to scale/density are somewhat intrinsic.

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#164

Post by ineedasername » Tue, Nov 02, 2021, 3:33 PM UTC

jdavis703 wrote: post #14

ineedasername wrote: post #7

Earlier quoted context omitted.

Unfortunately, at an average price of about $400,000 most of them are not going to be affordable for a typical young first-time buyer.

$400k seems very affordable. I could easily buy a house today if that’s what FHA-grade (i.e. something more than a burned out shack) housing went for. In my county the median house goes for over $1 million.

Affordable for you (and any US-based millennial with a strong education & job in the tech sector or other high skilled labor) is very different than affordable for the typical millennial, especially ones born in the last 1/3 of that generation that haven't had as much time to work up the salary scale a bit.

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#165

Post by jackorange » Tue, Nov 02, 2021, 3:33 PM UTC

UncleMeat wrote: post #160

jackorange wrote: post #118

Earlier quoted context omitted.

If you can accept technology changes over time (goodbye horse and carriage), and that society changes over time (hello LGBTQI rights), why is it unreasonable to accept the price you pay for goods will change? Naturally, its a given that's not the only change. The materials to build have changed, transporting them has changed, wages have changed. Prices are not going to be the same.

This is backwards. If society gets more expensive because we no longer oppress certain groups in the same ways, then it should have been the case that people from these groups were the ones getting cheap housing in the past since they were “buying” a shitty social experience. But that’s not the case. It was straight white families who got cheap housing while at the same time holding minorities back.

I presented a broad example that society is changing. I did not associate a variation in pricing due to the oppression or lack thereof of certain groups.

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#166

Post by batshit_beaver » Tue, Nov 02, 2021, 3:33 PM UTC

whimsicalism wrote: post #114

jackorange wrote: post #106

Earlier quoted context omitted.

I think this is a fallacy perpetuated by unrealistic ideals. I bought a house for 175K at 24. I only make 50K a year. I don't have a college degree. Lot of people saying buying houses is hard, unrealistic, or impractical want to buy mansions with a 10 second commute to their workplace in silicon valley but the reality is most people are not living like that. Wage workers are still buying houses no problem in what are…

My ideal is for real housing prices to remain somewhat steady - ie. I don't like that I have to pay much more than inflation to get a house compared to what my parents pay. It'd be nice to be able to afford a house where I grew up without having to tie a ridiculous amount of my net worth up in this one very pricey illiquid asset, even if I could get the mortgage.

We have 1) inflation and 2) population growth. Given the limited amount of resources, land, and labor, why on earth would house prices remain steady?

You'd need at least one of these factors to be reversed, or demand for standalone housing to go down for cultural or economic reasons, before you see long term downward trends.

In general though I agree with the poster above that the affordability "crisis" is really an expectations crisis. Everyone wants to live in a nice neighborhood with great schools that is close to the top employers, but there's simply not enough space, so this results in high competition and therefore prices. For some reason nobody wants to move to the rust belt where houses are nice and cheap. People don't want houses, they want the BEST houses.

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#167

Post by TomMckenny » Tue, Nov 02, 2021, 3:33 PM UTC

drnonsense42 wrote: post #67

cletus wrote: post #15

This is a good example of the fallacy of youth: buying too far into hype and being all "the sky is falling" with negative news. It wasn't long ago that we were reading how Zillow et al were going to buy up all the housing stock and keep millenials and Zoomers homeless forever. The people saying this have obviously never gone through a "bust" cycle. This is unsurprising as we've now been in the longest bull market in…

I disagree strongly with this sentiment. Clearly Zillow is not going to buy all the houses in America and turn us into serfs overnight - that is an absurd strawman. What? Zillow is far from the only actor here trying to enter this space. It's quite ridiculous to claim, as you are, that industrial-scale home speculation is doomed to fail since there are boom and bust cycles and therefore we don't need to worry. That's…

> We really don't have any direct, past precedent for this type of situation.

Unfortunately we do have precedent. Through all of history almost no one owed their own home. It was by extraordinary government intervention in the 20th century through loan programs, incentives and building, and impediments to speculation, that made it uniquely happen in our era.

As the government steps back from continuous intervention favoring individual home ownership and low to nonprofit housing, the more profitable rental economy will re assert itself: it is always more profitable to own a property to rent out then to live in it and the market will reflect that if left to itself.

Price fluctuations (eg 2008) do not change the fact that land price increases have far outpaced wages for decades. So yes, it is rational to be very concerned.

And note that Zillow is not selling these 7k properties to would be homeowners but to investors.

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#168

Post by tablespoon » Tue, Nov 02, 2021, 3:33 PM UTC

sokoloff wrote: post #107

secondaryacct wrote: post #85

Earlier quoted context omitted.

Let them buy overpriced useless houses, if they buy too many we'll vote them out or we'll take the homes back by force. Everything is a balance and the only way to make money long term is to be undeniably useful to a majority of people. Anything below that bar will die down in shame, infamy or violence.

What does “vote them out” mean in this context?

> What does “vote them out” mean in this context?

I suppose it could mean voting in people to write a law that makes it exceedingly unattractive for institutional investors to buy single family homes. You could probably even do such a thing "neutrally" since people really only need one home and if you own more than two you're almost certainly investing in some way. Apply some onerous tax on each unit owned above 100, and all these investors will flee the market.

Edit: IIRC, the companies that buy up all these single family homes are large corporations. I'm pretty sure you could write a law like I described that they wouldn't try to use some cheeky corporate shell game to try to bypass (e.g. in their tax filings require them to declare how many single family homes they're the beneficiary owner of, regardless of any intermediary shell companies/special purpose entities, and tax them for that). Require the auditors to sign off of on the number. If they lie, everyone's subject to even more onerous civil and criminal penalties (e.g. blow them up like Enron). Large corporations will stretch the law as far as they can, but it's rare for them to deliberately venture into fraud and other kinds of illegality (for the pedants out there, note I said rare not never). The systemic issues can be solved if they're made to comply, even if some relatively small fish still don't

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#169

Post by toolz » Tue, Nov 02, 2021, 3:34 PM UTC

lotsofpulp wrote: post #137

drnonsense42 wrote: post #127

Earlier quoted context omitted.

Real estate speculation has likely been around for thousands of years; it’s certainly not new. But, do you see any difference between A. individuals in the mid-2000s speculating on real estate based on individual whims and taking out mortgages they should not and B. large corporations with access to massive datasets previously unavailable, teams of PhDs trained to work on this, equipped with game-changing modeling ca…

A sounds like it would lead to increased chances of people overpaying and overextending themselves, and B sounds like it would lead to more accurate pricing.

I agree B) isn't being employed by only malicious companies. We're talking about a huge market and tons of competition. It would take a lot of effort to keep honest companies from making money also bringing prices down if there was artificial price inflation.

I've definitely not studied the market extensively, but it seems rather intuitive to me that if you artificially give everyone access to the best loans in any market, you'll see prices continue to inflate until everyone in the housing market is educated and capable on benefiting from the subsidized loans.

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#170

Post by Aunche » Tue, Nov 02, 2021, 3:34 PM UTC

drnonsense42 wrote: post #67

cletus wrote: post #15

This is a good example of the fallacy of youth: buying too far into hype and being all "the sky is falling" with negative news. It wasn't long ago that we were reading how Zillow et al were going to buy up all the housing stock and keep millenials and Zoomers homeless forever. The people saying this have obviously never gone through a "bust" cycle. This is unsurprising as we've now been in the longest bull market in…

I disagree strongly with this sentiment. Clearly Zillow is not going to buy all the houses in America and turn us into serfs overnight - that is an absurd strawman. What? Zillow is far from the only actor here trying to enter this space. It's quite ridiculous to claim, as you are, that industrial-scale home speculation is doomed to fail since there are boom and bust cycles and therefore we don't need to worry. That's…

You can't squeeze more money than the market is willing to pay. If private equity tries to corner the housing market, more people would decide to live with their roommates and family while developers will happily sell them overpriced homes and they pay property taxes.