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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

#191

Post by ChuckMcM »

ChuckMcM wrote: post #160
iab wrote: post #131

Earlier quoted context omitted.

Traffic fascinated me - please post a link to that paper

I will see if I can find it, not all papers published in the 80's are online. (and I just looked the professor is emeritus at USC now but still around so I'll send him the question too)

Okay, so I'm pretty sure it was done by G.F. Newell (UC Berkeley) I haven't found the paper we discussed in '82 but he went on to publish a 3 part description of traffic dynamics called "A simplified theory of kinetic waves in highway traffic" and reading through the abstracts for those it covers the same territory we were discussing in the systems class I was taking at the time.

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

#193

Post by mym1990 »

analyst74 wrote: post #151
_fat_santa wrote: post #80

Earlier quoted context omitted.

Other commenters on this and the previous thread pointed out, sometimes with first-hand experience, that Zillow would vastly overpay them for their home. I think this is less to do with the housing market in general and more to do with their tech. Zillow's iBuyer program hit the scene like a bull in a china shop. The real story is that they rushed into this space, had underdeveloped algorithms, overpaid for homes, an…

Overpaying for a house is not a problem in an appreciating housing market. If you overpaid for a house, just wait for its actual market value to catch up and voila, no loss. The reason you fire-sale that house at loss, is because you believe market value is unlikely to catch up.

Nitpick but the reason you fire-sale that house at loss is because you don't believe the market will catch up in your beneficial timeline. The housing market historically has a pretty slow appreciation rate, but one that is fairly predictable. Maybe Z sees the incoming rate hikes as a high volatility event?

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

#195

Post by chii »

analyst74 wrote: post #151
_fat_santa wrote: post #80

Earlier quoted context omitted.

Other commenters on this and the previous thread pointed out, sometimes with first-hand experience, that Zillow would vastly overpay them for their home. I think this is less to do with the housing market in general and more to do with their tech. Zillow's iBuyer program hit the scene like a bull in a china shop. The real story is that they rushed into this space, had underdeveloped algorithms, overpaid for homes, an…

Overpaying for a house is not a problem in an appreciating housing market. If you overpaid for a house, just wait for its actual market value to catch up and voila, no loss. The reason you fire-sale that house at loss, is because you believe market value is unlikely to catch up.

> The reason you fire-sale that house at loss, is because you believe market value is unlikely to catch up.

it's a bit tautological - because the expectation of value not catching up is the definition of overpaying!

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

#196

Post by jeffbee »

matmatmatmat wrote: post #150
Eiriksmal wrote: post #93

Earlier quoted context omitted.

I don't know the exact percentage of properties not in Zillow but in the MLS, but it is a very small amount. Zillow changed the game when it came to us non-Realtors(R) having access to housing price data. So much so, that some housing economist types have noted what appear to be permanent changes in months of active inventory (eg https://www.piggington.com , who analyzes San Diego's market) I don't think it's hyperbo…

About that last point, Redfin has access to the regional MLSs. I imagine they have a more complete dataset. My understanding is that Zillow relies on realtors to add their listings, so that means, maybe-it-happens, maybe-it-doesn't, entry errors, maybe-it's-updated, maybe-it's not...

Redfin also seems to have dramatically better pricing models, a better presentation, and an altogether better product.

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

#197

Post by adamqureshi »

algo vs algo with boom and BUST cycle and the net effect people get fired. AI is NOT the holy grail. AI will not have ALL the answers , humans still have value and will continue to adapt to the new world order. Innovation should not come at the cost of people. We still need to survive reproduce spend time with our family / friends and put food on the table. And have a lil fun on the way. -2cents

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

#198

Post by iav »

bombcar wrote: post #17
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've been noticing lots of "new lower price" emails from Zillow; I think the market has cooled off - but how much of it being hot was this investor competition?

price reductions are seasonal in real estate. Peak new listings are around Super Bowl Sunday and Labor Day. There are very few price reductions in that period. The best quality homes at attractive prices sell first. By late October, the total number of listings on the market starts to decline, and price reductions become common.

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

#199

Post by throwaway2037 »

ChuckMcM wrote: post #191
ChuckMcM wrote: post #160

Earlier quoted context omitted.

I will see if I can find it, not all papers published in the 80's are online. (and I just looked the professor is emeritus at USC now but still around so I'll send him the question too)

Okay, so I'm pretty sure it was done by G.F. Newell (UC Berkeley) I haven't found the paper we discussed in '82 but he went on to publish a 3 part description of traffic dynamics called "A simplified theory of kinetic waves in highway traffic" and reading through the abstracts for those it covers the same territory we were discussing in the systems class I was taking at the time.

Does this help?

https://www.sciencedirect.com/science/article/abs/pii/019126...!

A simplified theory of kinematic waves in highway traffic, part I: General theory

Also:

https://www.sciencedirect.com/science/article/abs/pii/019126...!

A simplified theory of kinematic waves in highway traffic, part II: Queueing at freeway bottlenecks

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

#200

Post by pcwalton »

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.

The first part of this is correct; the second part isn't. Rather than earning a profit, Zillow's current situation is the result of the invisible hand of the market correcting its economically-irrational behavior.
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