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

bloomberg.com

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

#21

Post by djrogers »

wayoutthere wrote: post #8
webinvest wrote: post #5

7k millennials will be happy to buy them up at affordable prices.

There is plenty of idle money in the investment world that needs places to go, unfortunately. Homebuyers are still being priced out by institutional investors looking to be long-term landlords. The market consensus right now is that inflation is here to stay for the next decade and bond prices aren’t adjusting accordingly, so there’s a flood of cash into all asset classes to try to hedge.

> Homebuyers are still being priced out by institutional investors looking to be long-term landlords.

There’s really no evidence that this is the cause of any of the housing bubble. Sure, it makes a good twitter thread, but institutional investors make up a tiny percentage (1%ish) of single family rentals…

[1] https://www.vox.com/22524829/wall-street-housing-market-blac...

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

#22

Post by jdavis703 »

justinph wrote: post #13
zip1234 wrote: post #10

Earlier quoted context omitted.

They are not the problem with residential real estate prices. The real problem is people that prevent additional housing from being built.

Zillow's attempt at flipping was certainly not helping. Even if it doesn't improve things, at least it is not hurting anymore. The trend of big companies buying single family homes and attempting to flip them is demonstrably bad for individuals trying to purchase a home.

I don’t know what sort or homes Zillow buys, but I know locally a lot of flippers purchase homes that most banks wouldn’t lend to a regular consumer. Then they fix them up. These are hoarder homes, abandoned buildings, condemned housing, etc. In so far as they’re making homes more accessible to folks without contracting skills I don’t see a problem.

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

#25

Post by onion2k »

sremani wrote: post #11
wayoutthere wrote: post #6

Turns out that mass flipping houses doesn’t work when you can’t hire contractors to do the work for a price that makes your budget assumptions hold. I am disappointed that they’re looking to offload them to institutional investors rather than individuals. Housing should probably not be an investment vehicle, but here we are.

Projected population of US in 2050 is 458 million from the current 330 million. Given that underlying reality, housing is going to be an investment.

Assuming that the additional 128m people need about 50m - 70m new homes it would make sense that there's going to be a boom in supply of homes in the near future. Without the ability to control or limit that growth it could easily result in an oversupply, especially in any given geographic region, which would lead to a contraction in prices. Unless you're also able to predict where these new citizens will live I'd suggest real estate investing could be quite risky.

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

#27

Post by IAmGraydon »

When I heard that Zillow was buying in the middle of an extremely exuberant residential market, it surprised me and I thought they must know something I don’t. Surely they aren’t stupid enough buy and hold a fairly illiquid asset class during market all time highs. Guess I was wrong.

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

#28

Post by valeness »

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…

But didn't they sell the houses to investors and/or established landlords?

I'm not sure how this helps the youth or those otherwise disillusioned with the current housing market as that housing is still unavailable to them.

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

#29

Post by silisili »

wayoutthere wrote: post #8
webinvest wrote: post #5

7k millennials will be happy to buy them up at affordable prices.

There is plenty of idle money in the investment world that needs places to go, unfortunately. Homebuyers are still being priced out by institutional investors looking to be long-term landlords. The market consensus right now is that inflation is here to stay for the next decade and bond prices aren’t adjusting accordingly, so there’s a flood of cash into all asset classes to try to hedge.

Sorry if this is a stupid question/thought... but wouldn't a mass run to asset classes itself cause inflation? Like some self fulfilling prophecy?

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

#30

Post by ineedasername »

Sounds like they got in too close to the peak (not to mention delays & increased costs in refurb) and didn't factor increased carrying costs on the potential that these would sit on the market a bit longer if they wanted to sell at a higher premium.

A hard lesson for them that listing aggregation & analysis of the market is far different than direct investments & flipping. Flippers take a big risk and offset inevitable losses on some homes with the profits on others. And generally if they do well it has a lot to due with deeper knowledge of the subtleties in the local housing market & partnerships with realtors that have customers in the pipeline already. There's a lot more to it than what might appear on the outside to "tech disruptors", or anyone else who thinks it looks easy from the outside.

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