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Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff

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Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff

#171

Post by engineer_22 »

wpietri wrote: post #97
andromeda-brain wrote: post #64

Earlier quoted context omitted.

I’d be more inclined to believe this if it wasn’t painfully obvious how much Z was overpaying for homes in the last half year, especially when all the other iBuyers saw the market slow down and reduced their offers accordingly. Seems much more likely that we can take them at face value and Zillow’s forecasts were just bad. Zillow hasn’t ever bought and sold homes (until now). That’s not their business.

Like 25 years ago I was writing software for financial traders back when trading was mostly done in open-outcry pits. What we had was very skilled human experts, so our systems were all basically supportive. Some larger rival, famous for their technology, thought they could do better by giving traders Newton-esque handheld computers that would receive new information via infrared networking. Then you didn't need smar…

Won't be the last time

Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff

#172

Post by JasonFruit »

lindseymysse wrote: post #140
muttantt wrote: post #11

Crazy. I recently sold a condo to Opendoor for significantly more than I would have even thought to list it for. When I negotiated with Opendoor after their initial offer, I pointed out a recently sold condo (days before, in similar condition, layout and finishes) in the same complex that sold for much higher than Opendoor offered. Within hours Opendoor came back matching that same selling price. The kicker? It was a…

I wonder how much of our economy, that alternately humming along and collapsing around us, is simply algorithms talking to eachother? How much economic movement is being generated by arbitrage ( https://www.ecomcrew.com/amazon-arbitrage/ ) ? How much online traffic is generated by advertising bots interacting with each-other? How much are housing prices being juiced by algorithms? I think the environmental crisis is…

Can you elaborate on what makes you think environmental factors are affecting the supply chain?

Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff

#173

Post by bduerst »

rflrob wrote: post #100
muttantt wrote: post #11

Crazy. I recently sold a condo to Opendoor for significantly more than I would have even thought to list it for. When I negotiated with Opendoor after their initial offer, I pointed out a recently sold condo (days before, in similar condition, layout and finishes) in the same complex that sold for much higher than Opendoor offered. Within hours Opendoor came back matching that same selling price. The kicker? It was a…

My favorite story of algorithmic pricing gone mad was discovered by a postdoc in my grad school lab, leading to an out of print book being listed on Amazon for over $23 million: https://www.michaeleisen.org/blog/?p=358

Whenever I see items like that, all I can think is embezzlement or tax evasion - but then again you'd think they would do that on less unique items (like $1200 for playstations).

Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff

#174

Post by arcticfox »

AussieWog93 wrote: post #136
enlyth wrote: post #113

Good riddance, I hope this company burns to the ground The software developers working for this company knowingly tried to make algorithms to flip and profit off of something that should be a human right Replacing carpets and painting walls, trying to flip for a 20% profit, the people running Z must be geniuses As a millennial looking at 2 bedroom flats selling for £575k (780k usd, not far from a million dollars) in…

In defense of Zillow, they weren't looking to buy a "portfolio" of houses - they bought as many as they sold, and didn't have any net negative effect on housing supply. Yes, they're profiting off of a bad situation, but they're not the cause of it. Bev from the local council's planning department, as well as Michael Caton's horrific propaganda piece, has done more damage than every flipper combined.

> Yes, they're profiting off of a bad situation

That seems like it was the idea but amusingly, per this article, not exactly the right word for what they were doing

Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff

#175

Post by DavidPeiffer »

stingrae wrote: post #120
pezzana wrote: post #34

> ‘We’ve determined the unpredictability in forecasting home prices far exceeds what we anticipated and continuing to scale Zillow Offers would result in too much earnings and balance-sheet volatility,’ CEO tells investors. That's quite a statement. The head of a company with a privileged view of the US residential real estate sector says that the market is "unpredictable." Not the good kind of unpredictable where yo…

When I use Zillow and check the Zestimate, for various properties, it seems to be super far off. If they used it for speculative property purchases, I can imagine that would go terribly wrong.

If you're interested in the method they use to calculate the Zestimate, one of their data scientists did an interview back in 2017 (before the home buying started) that talked about the factors involved.

https://dataskeptic.com/blog/episodes/2017/zillow-zestimate

Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff

#176

Post by missedthecue »

Factorium wrote: post #157
missedthecue wrote: post #142

Earlier quoted context omitted.

BlackRock manages the assets of pensions and 401ks. They are literally in the business of making returns for the middle class.

The Fed hired Blackrock to manage the QE program. They are basically in charge of printing US dollars and buying their own assets. And we think crypto is bad... We should just end the Fed and replace it with a giant algorithm, with crowdsourced and transparent consumer price data. Maybe a few humans to keep the lights on, and to figure out how a 4K TV is better 'value' than a 1080p TV, etc.

BlackRock was hired to run the feds open market bond operations. BlackRock are experts at buying bonds off the open market which is why they were hired.

BlackRock does not have control over the money supply.

Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff

#177

Post by bobthepanda »

sytelus wrote: post #137

TLDR; According to CEO they tried to estimate current price vs price 6 months down after a flip and their estimates had been way off. When house doesn't sell at higher price, it creates inventory, monthly loss on rent value and volatility in balance sheet which is not good for a public company. So basically their algorithms had a lot of noise and scale wasn't still large enough to smooth it out for balance sheet. Thi…

Zillow was at least a huge contributor to buyers needing to do the 10-20% over asking and waiving everything, so I wouldn't necessarily call that an indication of market health.

Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff

#178

Post by cyanydeez »

muttantt wrote: post #11

Crazy. I recently sold a condo to Opendoor for significantly more than I would have even thought to list it for. When I negotiated with Opendoor after their initial offer, I pointed out a recently sold condo (days before, in similar condition, layout and finishes) in the same complex that sold for much higher than Opendoor offered. Within hours Opendoor came back matching that same selling price. The kicker? It was a…

this is yahoo 2: electric marketing dot com bust.

it was purely about marketing driving up its own value via poorly considered metrics that invariably included positive reenforcement loops. eg, yahoo sells an ad for a company which sells ads on yahoo.

Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff

#179

Post by CaveTech »

iskander wrote: post #159
acchow wrote: post #147

Earlier quoted context omitted.

Zillow basically bought homes, repainted them, then sold them. Why is this so villainous?

Because they would outbid people who actually want to live in those homes, essentially front-running the middle class to earn a massive profit.

Except that massive profit is a ... massive loss.

Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff

#180

Post by AussieWog93 »

enlyth wrote: post #164
AussieWog93 wrote: post #136

Earlier quoted context omitted.

In defense of Zillow, they weren't looking to buy a "portfolio" of houses - they bought as many as they sold, and didn't have any net negative effect on housing supply. Yes, they're profiting off of a bad situation, but they're not the cause of it. Bev from the local council's planning department, as well as Michael Caton's horrific propaganda piece, has done more damage than every flipper combined.

I'm not saying Z is the cause of the crisis, it's more like them trying to capitalize on it. How bad you view this is based on your political quadrant, so fair enough to those who don't think it's a problem. What I'm trying to bring attention to is that our generation is frustrated, we are priced out of owning a home unless we have some massive help from our parents or inheritance, and being repeatedly told that we w…

>What I'm trying to bring attention to is that our generation is frustrated, we are priced out of owning a home unless we have some massive help from our parents or inheritance, and being repeatedly told that we will own nothing and it is for our own good is demoralizing.

I don't disagree with you, and I'm in the same boat personally (young family currently renting, looks like we'll be able to afford a house but only because one of our businesses has taken off in a massive way).

I just feel like we as a generation, when expressing our frustration, obsess over who has what rather than the systemic obsctacles getting in the way of us gaining a stake in society.

Screaming at people who have more than us is cathartic, but ultimately achieves nothing. We need to refocus our efforts towards solutions that are achievable and impactful.

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