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How Zillow's homebuying scheme lost $881M

fullstackeconomics.com

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Re: How Zillow's homebuying scheme lost $881M

#271

Post by imilk »

brk wrote: post #4
avgDev wrote: post #3

Earlier quoted context omitted.

Odd. My house is valued at $330k on zillow, would sell for $420K+ in a few days.

Mine is pretty accurate ($2.5M), based on recent sales and a couple of solicitations from realtor friends. FWIW, we have had a high frequency of home sales in the past year, so that might help. I just looked up my previous house (sold 5 years ago), and Zillow is saying $740K, which I am pretty sure is massively overvalued, however the street it is on, and general area, have a fairly low turnover, so less recent data.

Mine is pretty accurate as well ($44.8M), based on recent mentions in Architectural Digest and a couple of solicitations from fellow G650 owners.

Re: How Zillow's homebuying scheme lost $881M

#272

Post by afterburner »

lotsofpulp wrote: post #253
afterburner wrote: post #247

Earlier quoted context omitted.

Zillow could lie about regional home values and blame it on their "secret sauce".

Why would anyone trust Zillow’s opinions over anyone else’s opinion? Everyone has access to the same historical sales data that the market actually cleared at. In fact, it is has never been easier for the average person to research historical sales information. They can filter the parameters of the house they are interested in the area they are interested and find all the previous sales data, all while sitting on the…

People tell outrageous lies on Facebook all the time and they seem to work.

Deception works (especially subtle deception), and laziness is a thing.

Also, Zillow's current value estimates are about "current" values, not past values.

Re: How Zillow's homebuying scheme lost $881M

#273

Post by iso1631 »

c-linkage wrote: post #269
paxys wrote: post #40

Earlier quoted context omitted.

One can blame Airbnb, Zillow or whoever else, but the truth is that speculation in real estate and vacation towns have both been a thing for a very long time. If the population rises and we refuse to build more houses, the existing ones will get more expensive no matter what. The solution is out there in front of us but everyone prefers to dance around it.

Change the word "house" to "car" and I think the problem becomes not-so obvious. It's often bemoaned that personal cars are a waste of money and space: they sit idle most of the time, we have to build parking lots to accommodate them and that takes space. It would be so much better if we could just hire cars on demand! But this doesn't scale because the demand is not spread out during the day -- absent carpooling, yo…

> But this doesn't scale because the demand is not spread out during the day -- absent carpooling, you still need one car per person twice a day, meaning the supposed savings don't exist.

Very rare for my neighbour to be using her car at the same time I use my car. Not every car driver commutes 5 days a week 9-5.

I work from home, have done for years, my neighbour is retired.

I guarantee in my village there will be at least 10 unused cars at any point during the year, probably nearer 50. There certainly aren't that many empty houses

Re: How Zillow's homebuying scheme lost $881M

#274

Post by schrijver »

cellis wrote: post #97
mentalpiracy wrote: post #79

Earlier quoted context omitted.

Why should we use this as an example? You’re talking about people who are throwing away money by leaving assets idle - and implying that they obviously don’t know how to operate in this market.

As a potential landlord who is doing this very thing right now, it isn't really "throwing money away", because of asset appreciation. If you get stuck with a bad tenant it's way more hassle than if you had just let it sit and AirBnB'd it every once in a while. Especially for properties where the rent is less than the appreciation per month.

How do you feel about the ethical aspect? Now the home is not useful, except as an investment to you, but if you sold it there’s lots of ways you could make money instead (and in ways that provide value to others!). And the place would be someone’s home. Seems weird to let it be stay empty like that.

Re: How Zillow's homebuying scheme lost $881M

#275

Post by KptMarchewa »

programmarchy wrote: post #120
KptMarchewa wrote: post #70

Earlier quoted context omitted.

>local regulations state that I am not allowed to live with more than 2 people unrelated to me What? Where is that? It sounds insane and extreme overreach. How can somebody regulate with whom consenting adults choose to live?

If you have a family home, you probably don’t want 8 college students moving into the house next door to you. This was a restriction in my college town. As a student, I didn’t like it, but as a homeowner with a family, I completely understand.

Most people in the world live and raise families in the conditions where they don't control what happens behind the floor, walls and ceilings. This seems like very strong entitlement.

Re: How Zillow's homebuying scheme lost $881M

#276

Post by rednerrus »

paxys wrote: post #40
thr0wawayf00 wrote: post #9

The scary thing is that it's easy to see how something how like this could drive a market boom and bust cycle. I'm imagining a scenario where two iBuyer companies try to outbid each other algorithmically, driving the prices further and further out of reach of people who are looking for a primary home. Tangentially related, I talked to a friend who works on geospatial data for one of the big vacation rental companies,…

One can blame Airbnb, Zillow or whoever else, but the truth is that speculation in real estate and vacation towns have both been a thing for a very long time. If the population rises and we refuse to build more houses, the existing ones will get more expensive no matter what. The solution is out there in front of us but everyone prefers to dance around it.

We lost four years of housing growth because of the recession.

Re: How Zillow's homebuying scheme lost $881M

#277

Post by KptMarchewa »

londons_explore wrote: post #81
KptMarchewa wrote: post #70

Earlier quoted context omitted.

>local regulations state that I am not allowed to live with more than 2 people unrelated to me What? Where is that? It sounds insane and extreme overreach. How can somebody regulate with whom consenting adults choose to live?

Regulations like this are common. Usually you need to get a special license, have home inspections annually, pay various fees, etc. if you want to do so.

Regulations where you'd specify minimum floor size, or rooms per person make sense for me. It's about straight up saying you can't live with people without state sanctioning the relationship.

Re: How Zillow's homebuying scheme lost $881M

#278

Post by dyu »

karpierz wrote: post #179
lubesGordi wrote: post #157

Earlier quoted context omitted.

I'm under the impression that 'cash offer' just means that whoever is buying has already secured their financing. That means there's almost no risk of the deal falling through and the sale can go from contingent to pending immediately. This is better for the buyer because they sell faster. Senior software eng at microsoft can pull this off no problem (no one is buying a house with cash in their bank, not even rich pe…

It means that they aren't using a mortgage to buy it. If there's a mortgage involved, then the offer becomes contingent on the bank's due diligence which can cause the deal to fall through in a variety of ways. For example: the bank will only loan you money up to the appraised value of the home, which is done after the deal is signed (banks won't send an appraiser to every house you make an offer on). If the appraise…

While it is true cash offers in the strict sense mean real cash, it may also mean no-contingency offers. You can go through mortgage underwriting first and commit to pay the gap between appraised value and deal value, and can make a no-contingency offer with minimum risk. Or, if you are willing to lose your deposit (usually 3-5%) you can also make a no-contingency offer to be more attractive.

Re: How Zillow's homebuying scheme lost $881M

#279

Post by iso1631 »

schrijver wrote: post #250
tristor wrote: post #129

Earlier quoted context omitted.

> prefer to keep their condos/houses empty rather than rent them out at market rate because of 100% tenant friendly city and state laws. Someone can move in and refuse to pay rent, refuse to leave, use your house as a drug den, destroy your property and lots more, and you can do nothing about it. I'm in this situation right now. The only way I'll rent it out is if I personally know the tenant and their personal chara…

This is so alien to me. Why don’t you sell the place? Staying the owner of this place makes it so that you can’t spend your money tied up in this house, and this house can’t provide its roof to someone. Seems like both of you loose.

Presumably value appreciating more than selling it and investing in other assets that are as safe.

Re: How Zillow's homebuying scheme lost $881M

#280

Post by tshaddox »

giraffe_lady wrote: post #252
jsnk wrote: post #224

Earlier quoted context omitted.

This analogy is quite lacking. You should also mention that this medicine rich people are collecting also has dozens of other alternative medicines with hundreds of thousands in volume because other cities exist. Also you should mention that some of these rich people are not rich people at all, but working class people who's lived in a location for decades which has become a desirable location in recent years thanks…

Cites are not fungible, I hate that this always comes up. I have relationships here going back to my childhood, I sometimes visit the grave of the person I am named for, I spend every sunday afternoon cooking and eating with the 97-year-old who took me in and nursed me back to health decades ago. If I move to another city these things aren't coming with. Now you can dismiss these things as inherently less meaningful…

> Cites are not fungible, I hate that this always comes up.

Yep. Why should we tell people "cities are fungible, just go live somewhere else so we can buy all the collectible homes here" instead of "cities are fungible, just go buy collectible homes somewhere else so we can live here"?

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