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Anecdotally: Zillow quoted a number for a house that I was selling right at the peak of all this, pending inspection. They couldn't come around and look at it though for about 6 weeks. By that time the market had turned and they said they weren't interested.
When was the peak in your view? What market is this? Thanks
This is completely subjective of course.
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…
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…
I think that is a little myopic.
Older buyers that are downsizing can make an excess profit in that situation. Although perhaps if excess numbers are downsizing to the same retirement homes, then maybe the retirement home owners win instead.
Also if you have a second investment property, you are definitely winning.
Finally, as house prices go up, you do end up with more equity (perhaps way more equity because a mortgage is geared lending). More equity can make a huge difference if you have any economic shocks, or if you care about passing on your equity to your children. Let’s say you have 10% equity in a $500k home, which then appreciates to $1M. If you die, you now have 550k equity, which is 11% house deposits for 5 children, or 27% deposits for each of two children. Not a bad trick.
I think a better way to think about it is that you need to own 1 house. If you don’t own a house, then you are shorting the housing market. If you own 2 then you are long the housing market. If you are a couple with kids, then you need to consider the chance of divorce (owning 1 home each is conservative, owning 1 home together is risky), and consider how much you want to give to your kids. Due to moral hazard I can’t see how you could insure against the risk of divorce.
We recently went through buying a Zillow owned house in Phoenix AZ and response and attitude from the selling agent and zillow was pathetic. They took 3 full days to send the signed contract after they told us we our offer was accepted. Couldn't get the inspection done within first 9 days(inspection contingency is 10 days) of signing the contract and only got a response when we said we were going to cancel escrow. Go…
Earlier quoted context omitted.
Because they would outbid people who actually want to live in those homes, essentially front-running the middle class to earn a massive profit.
So if the previous owners moved out and then repainted the house and sold it for 20% additional value, would they be villains too? Or is it okay because they're "middle class" and Zillow's shareholders presumably are just yacht-owning billionaires?
Earlier quoted context omitted.
According to this article[1], large investment companies accounted to 16.1% of all single family home sales in the US in Q2. I'm not an analyst. But, I would think that would be plenty of extra demand to influence the price?
Investment companies are far less likely to lead a speculative bubble than retail buyers. They are professional investors who go through a valuation process. They have also always been part of the market.
Earlier quoted context omitted.
Because they would outbid people who actually want to live in those homes, essentially front-running the middle class to earn a massive profit.
> Because they would outbid people who actually want to live in those homes If they outbid everyone who actually wanted to live there, who were they planning to sell to? :P Buying things you think are underpriced and reselling them is not frontrunning. (Ever since GME, a lot of people learned the word frontrunning and started using it in every possible situation.) Zillow's plan was to act as a market maker. Market ma…
I mean, exactly - they lost $550 million. Didn't stop them from burning massive capital reserves to outbid tons of people and fuck up the market a bit for them on a bad bet.
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 suspect the 'AI software' running these companies is using linear regression to predict housing prices and one of the inputs is the price of similar houses nearby.