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

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

#261

Post by AussieWog93 » Wed, Nov 03, 2021, 3:07 AM UTC

mistrial9 wrote: post #201

AussieWog93 wrote: post #180

Earlier quoted context omitted.

>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…

the reward for your pacifist approach is that you now rent, with a young family.

Please re-read my comment.

I never advocated for a "pacifist approach", but if we want housing to be affordable we need to pick the right battles.

Advocating for things like tax reform, financial restrictions which limit the utility of residential property as an investment vehicle, incentives for empty nesters to downsize, less restrictions on property development, or even high-speed rail between metro areas and regional hubs will all put downwards pressure on property prices.

Misdirected frustration, unfortunately, will not.

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

#262

Post by somewhat_drunk » Wed, Nov 03, 2021, 3:13 AM UTC

anchpop wrote: post #252

dogman144 wrote: post #214

Earlier quoted context omitted.

Lol at trying to explain these practices as some sort of Randian perfectly functioning market.

I find I'm most likely to be right when people are responding to me with thought-terminating buzzwords rather than actual arguments

Chalk up another point for that rule.

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

#263

Post by zapataband1 » Wed, Nov 03, 2021, 3:14 AM UTC

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…

I agree with you 100% except I don't think that people trying to buy some houses to maintain and rent out are the problem. Mainly these huge corporations, esp. things like Tesla, and Arms corporations, that for decades have leeched from the middle class and gov contracts. Our gov is captured, dems can't keep a positive rating after trump because they wont pass anything meaningful.

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

#264

Post by speby » Wed, Nov 03, 2021, 3:21 AM UTC

If you want to know what happened, who was involved, watch for various high-profile exists from Zillow over the next little while (and including, but not only, the higher-level layoffs that will be included in the short-term 25% workforce reduction).

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

#265

Post by gruez » Wed, Nov 03, 2021, 3:23 AM UTC

_vertigo wrote: post #237

yanderekko wrote: post #183

Earlier quoted context omitted.

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?

I think there’s a difference between a company with enormous amounts of capital buying a bunch of houses to flip, intentionally trying to drive a trend of increasing home prices to profit, and a single homeowner improving a single house and profiting primarily because of the improvements and not because he’s driving the market up massively..

>intentionally trying to drive a trend of increasing home prices to profit

was that their goal? it's possible to be a market maker without cornering/manipulating the market. see: market makers on stock markets.

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

#266

Post by gruez » Wed, Nov 03, 2021, 3:29 AM UTC

maxsilver wrote: post #190

lokar wrote: post #141

Earlier quoted context omitted.

They were trying to act as a market maker, providing liquidity for a price. Nothing wrong with that.

> Nothing wrong with that. Zillow was literally scalping housing , a basic human need that all people must buy. That's generally considered very immoral by most reasonable people. And they didn't just do it once or twice, they did it at ridiculous scale (tens of thousands of homes sold last quarter, was a sale to a scalper to artificially drive up all housing prices). Most reasonable people would consider this behavi…

>Zillow was literally scalping housing [...]. That's generally considered very immoral by most reasonable people.

sorry, what were they doing?

    Scalping may also refer to: 

    Scalping (trading), in trading securities and commodities either a fraudulent form of market manipulation or a legitimate form of arbitrage

    Ticket resale, the resale of tickets to a public event such as a concert or sporting event

https://en.wikipedia.org/wiki/Scalping_(disambiguation)

The arbitrage definition under "Scalping (trading)" (ie. making money off the bid/ask spread) doesn't seem very immoral to me. I don't think they were buying houses in an area, then recommending people to buy it, so it doesn't fall under the fraudulent definition. The "ticket resale" definition doesn't really fit, because zillow isn't really acquiring houses at below market value. They're buying houses from the same market as everyone else.

>a basic human need that all people must buy

you need to buy housing, not necessarily a house. They're not the same thing. You need to buy food to survive, but you don't necessarily to buy a farm.

>tens of thousands of homes sold last quarter, was a sale to a scalper to artificially drive up all housing prices

but the fact that they lost money suggests that they didn't drive up housing prices?

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

#267

Post by noitsnot » Wed, Nov 03, 2021, 3:31 AM UTC

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…

They were overpaying. Everyone knew it. Just outrageous quotes compared to even the other online companies buying up houses.

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

#268

Post by notatoad » Wed, Nov 03, 2021, 3:32 AM UTC

acchow wrote: post #147

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…

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

they bought homes and flipped them at a high enough volume as to artificially inflate the price of housing.

artificially driving up the prices of basic human needs is literally Bond villain behaviour.

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

#269

Post by RNCTX » Wed, Nov 03, 2021, 3:35 AM UTC

trident5000 wrote: post #121

derefr wrote: post #92

Earlier quoted context omitted.

> house prices have a fundamental ceiling, and it is determined by the size of the monthly payment that banks will allow the typical homebuyer to assume when approving a loan. In the more irrationally-hot markets, why assume that housing is even being purchased on a mortgage by your average home-buyer, rather than being purchased cash-in-hand by a private or corporate investor looking to park wealth they've already g…

Because the real estate sector is like 30-40 trillion. 2007 was the result of a massive infusion of debt by unsophisticated retail "investors" who bid prices up far higher than even their rental value. Lending standards dont allow this today. If big institutional money is going to cause a frenzy it would need to be irrational money managers that somehow clear their purchases through a panel and none of them say anyth…

> Because the real estate sector is like 30-40 trillion. 2007 was the result of a massive infusion of debt by unsophisticated retail "investors" who bid prices up far higher than even their rental value. Lending standards dont allow this today.

lol.

2007 was the end of a long road, paved by unsophisticated "money managers" and doubly unsophisticated "bank regulators" and even more unsophisticated "politicians" since WW2.

There are people buying houses for more than their rental value right now where I live. Because there's one crime-ridden trailer park maintained on the freeway nearby to make them all within a certain distance of a "disadvantaged zone" and thus every former manufacturing country factory boss looking to move to the US only has to lose $400-$500 dollars a month to buy his way to the top of the green card list.

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

#270

Post by grayhatter » Wed, Nov 03, 2021, 3:35 AM UTC

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…

> It's the rent seeking leeches of society that think that by buying a "portfolio" of houses, they can live out their lives without contributing society in any way

What implication am I supposed to take from this? Everyone has must contribute meaningfully to society or they're shit?

> Anyone arguing against this has either a dog in the race, or loose screws in the head

So if I don't already agree with you, I'm either lying for finical gain, or insane? Rough options... :(