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

#251

Post by HarryHirsch » Tue, Nov 02, 2021, 4:27 PM UTC

Aunche wrote: post #170

drnonsense42 wrote: post #67

Earlier quoted context omitted.

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.

more people would decide to live with their roommates and family

And we made fun of Soviet Russia, where people would live with roommates and family because their government was so dysfunctional that it couldn't even arrange shelter for its citizens, a basic necessity for life.

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

#252

Post by jackorange » Tue, Nov 02, 2021, 4:27 PM UTC

whimsicalism wrote: post #236

refurb wrote: post #217

Earlier quoted context omitted.

Real estate is local. Your expectations aren’t reasonable unless housing can be built as quickly as demand rises.

So why can't we not block building housing?

I don't know where it's being blocked in your view but to use my earlier example of silicon valley, maybe there is a limitation of geographic space, resources in relation to population, and zoning considerations. Maybe silicon valley workers could sponsor the building of a floating land mass to add additional residential space unbound by traditional limitations.

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

#253

Post by mellavora » Tue, Nov 02, 2021, 4:28 PM UTC

djrogers wrote: post #21

wayoutthere wrote: post #8

Earlier quoted context omitted.

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...

Actually, yes there is. My brother has a senior position at HUD, they've been very concerned about this the last few years.

You won't hear this at the cabinet level, because those are all political appointees, but when you get down to the career people, they have grave concern over institutional buyers.

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

#254

Post by jdavis703 » Tue, Nov 02, 2021, 4:29 PM UTC

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…

Look at how short the last recession was in the US. It was 2 quarters, meeting the bare minimum definition of a recession. Since 2008 policy makers have shown a broad willingness to stimulate the economy at all costs. Barring a USA debt crisis or a change in the political climate, I’m skeptical the US will see a major recession any time soon.

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

#255

Post by game_the0ry » Tue, Nov 02, 2021, 4:29 PM UTC

Former real estate finance professional, here.

If you were hoping this was a sign of the real estate market falling and perhaps its your chance to get a bargain, think again.

> The company is seeking roughly $2.8 billion for the houses, which are being pitched to institutional investors, according to people familiar with the matter.

Institutional investors (Blackstone, Blackrock, Colony, et al) will be being in bulk, in cash, and at a steep discount before they even hit the market. Zillow's loss will be the institutional investor's gain. Of course, they will happily rent to you since that is the the plan all along - own all the assets, and every generation after X gets to rent [1].

I wish this would anger people more, but enough home owners will benefit from this dynamic - it will likely keep home prices elevated for longer, and set up an ugly conflict between those who do not have (and aspire to have) homes and those who currently own homes.

[1] https://www.ocregister.com/2021/09/30/in-a-hot-market-compan...

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

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Post by lotsofpulp » Tue, Nov 02, 2021, 4:30 PM UTC

long_time_gone wrote: post #221

lotsofpulp wrote: post #137

Earlier quoted context omitted.

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.

You are right that the pricing is more accurate. But it is more accurate for a company trying to increase their own revenue, not someone trying to own and occupy a house (most Americans, based on home ownership rates). The calculations used are entirely different and so is the capital available. In the world without this type of behavior, that pricing difference could be captured by an actual homeowner over the life…

> But it is more accurate for a company trying to increase their own revenue, not someone trying to own and occupy a house (most Americans, based on home ownership rates).

Also for the house seller (prior to the company), who is getting paid a more accurate, higher price.

And a price is accurate all the same for buyer and seller, since there exists a range with the minimum price the seller wants to receive and a maximum price the buyer wants to pay. The smaller this range, the more accurate the price.

With more data and more accurate projections, it may be possible for current owners to capture more of the gain that may have happened down the road.

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

#257

Post by scotuswroteus » Tue, Nov 02, 2021, 4:30 PM UTC

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 think I agree with your ultimate conclusion, but that's not a fallacy it's an ageist trope, and also you're mistaking whoever generates oversimplified clickbait for the youth. I want to emphasize this: the youth do not control what the real estate media is urging various news outlets to say.

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

#258

Post by thebean11 » Tue, Nov 02, 2021, 4:32 PM UTC

KaiserPro wrote: post #192

VRay wrote: post #174

Earlier quoted context omitted.

those hedge funds don't have access to enough money to move the market that much $2.6 billion is chump change to a medium-sized city with a few hundred thousand residents, much less the US at large We just need to remove zoning restrictions so that market forces can bring houses back down to being an affordable, depreciating asset. https://www.worksinprogress.co/issue/the-housing-theory-of-e...

> $2.6 billion is chump change For the entire US yes. For new york city, that's just under ~3% of total sales. Given how fundamentally illiquid residential housing market is, thats more than enough to push prices up/down as the player sees fit.

I bet it's even an even bigger part of the pie if you exclude $10m+ homes. My hunch is that the middle and low end of the market is more attractive because they are easier to rent.

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

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Post by IG_Semmelweiss » Tue, Nov 02, 2021, 4:33 PM UTC

chasebank wrote: post #214

harryh wrote: post #75

Earlier quoted context omitted.

Decades of under-building due to restrictive zoning laws will do that.

While I don't disagree, there have to be multiple forces at play here. Take a town like Boise. They have very lenient zoning / building req's. If it was just zoning, their property market wouldn't be so out of whack. In addition to zoning, speculative investing, low interest rates, housing authorities, rent control, the list goes on and on. IMO, CA prop 13 is just as guilty as restrictive zoning. We'll never get to s…

I don't disagree that there are other factors at play.

The last part about Prop 13 seems like a bit of a cheap shot. CA is anything but a natural market.

CA government set that poison pill to ensure it must listen to its constituents and remain as "natural" as possible. Now we find they can't enact meaningful reform around zoning, building requirements, parking, or making the city more welcoming to trades, etc.

Why should old taxpayers carry the water for ineffectual govt ?

CA: "We refuse to make the changes needed to let more people in at a reasonable cost. We will instead take more money from one group, so that they leave and we can fleecce someone else ! "

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

#260

Post by rsj_hn » Tue, Nov 02, 2021, 4:34 PM UTC

HarryHirsch wrote: post #251

Aunche wrote: post #170

Earlier quoted context omitted.

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.

more people would decide to live with their roommates and family And we made fun of Soviet Russia, where people would live with roommates and family because their government was so dysfunctional that it couldn't even arrange shelter for its citizens, a basic necessity for life.

U.S. has a 65% home ownership rate.

Not everyone can afford a Bentley or a condo in Manhattan. That is not some terrible injustice that needs to be fixed. Living within your means and buying a place where you can afford to live is also an alternate approach. Or you can moan about capitalism and how unfair life is.