Earlier quoted context omitted.
And so are money lenders, correct?
Of course.
Car rentals?
Tool rentals?
Camera equipment rentals?
Leeches, all of them?
Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff
321–330 of 476 posts
Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff
#322Earlier quoted context omitted.
Yes, yes they did. The vertical part of the hockey stick is EVERYWHERE. Homework: go on zillow and find the most depressing row house in urban Detroit/Cleveland/wherever with enough pricing history to have a graph. You will see that exact same line shape. Literally everything has doubled since around 2014. Completely bombed out crackhouses were a 300-500% ROI in that period. You couldn't lose money even if you set th…
> Everything has gone up massively and for seemingly no reason. The reason is quite obvious. Just like bond values and yields are inversely correlated, mortgage rates and home values are inversely correlated. Here is a chart of the 30Y mortgage rate, it should explain everything. https://fred.stlouisfed.org/series/MORTGAGE30US
Yes but it's a little more complicated than just rates. It's a multitude of factors including perceived worth, available cash, financing rules, supply, new construction costs, etc.
People need to be willing to sign their lives away to pay off houses, otherwise rates would also be strongly tied to the price of everything from cars to toothpaste (they are very loosely, but those things don't cost 3x what they did in 2014).
Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff
#323Earlier quoted context omitted.
So you can say the same about money lenders, right?
Lending money endures risk. Landlords do have some risk but in the current supply side limited housing market the risk is drastically lower than the typical returns. e.g the bond market is probably a lot closer to the market equilibrium than the housing market. There are no NIMBYs in the bond market.
So if a landlord owns property in a low income (higher risk) area, then it's ok?
Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff
#324Crazy. 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.
There was a Kaggle Competition in case you missed it. At least here you can see what kind of features they are using and what models people employed. See https://www.kaggle.com/c/zillow-prize-1
Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff
#325Anyone whose main income is from other peoples rent has an incredible amount of explaining to do if they want to claim that they are anything but a useless leech.
Being a landlord actually involves a lot of work and risk. If it were free money, everyone would do it and it wouldn’t be free money anymore. I don’t have the nerve or free to be a landlord myself, but I’m sure I own some small parts property management companies via the index funds I own shares in.
Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff
#326Good 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…
> buying a "portfolio" of houses, they can live out their lives without contributing society in any way A lot of people want this. Its basic human nature ... take or construct the path of least resistance. Its just that most people cannot do this and only top 1% can. The whole FIRE movement makes ppl aspire for the day when they can live on passive income from the savings/investments. https://en.wikipedia.org/wiki/FI…
I think FIRE is mainly about not needing to work anymore. Passive or investment income isn’t the goal, just an (important) way to be done working earlier. E.g., in a hypothetical world where you only had interest-free savings accounts, you could still retire early, you’d just need to save more first.
Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff
#327What I really want to know is if the housing and real estate market's are so hot, why do REITs offer such terrible returns? How can hot housing areas have appreciation of >15% while REITs offer ~4% returns?
A cursory glance at what assets REITs own would help you answer that question.
Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff
#328Earlier quoted context omitted.
Very much like the $5000 books on Amazon where the algorithms are anticipating flipping an existing listing. Congrats on winning this round! The next step might be interesting which would be to go back and re-purchase the Condo once the price corrects to the 'real' price and bank the difference. I have read this article and the one before it and it sounds very much like some folks who fell in love with their own idea…
I knew about the brake wave back in 1980, as I could see it on I405 on my way home from work. Due to a curve in the highway, I could see about 3 miles ahead. The wave heading towards me was pretty obvious. I found I could "break" the wave by letting a gap grow in front of me that would absorb the wave, and I wouldn't have to brake to a stop (and so my clutch would last longer). It never occurred to me to write a pape…
A good example of why allowing for stress tolerance can make a system more efficient in the long run.
Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff
#329Earlier quoted context omitted.
> Market makers make a profit by buying things and then reselling them for slightly more. When a lower middle class guy in your town does this, he’s called a scalper and seen as a villain. When rich elites do this with life essentials, they’re market makers doing a useful service.
Scalpers don't provide liquidity, market makers do
Why don’t scalpers provide liquidity?
If Alice has season tickets to a basketball team, and Bob buys some of them to scalp later, isn’t he adding liquidity?
I know nothing.
Re: Zillow to stop flipping homes, loses more than $550M, lays off 25% of staff
#330Earlier quoted context omitted.
Zillow basically bought homes, repainted them, then sold them. Why is this so villainous?
I take issue with the cheap flips. This type of flipping is really only possible in a hot market where inspection contingencies are regularly waved. Cheap flips are basically robbing the community by lowering the quality of the housing stock and leaving future owners with higher maintenance costs. In a more balanced market, these houses would either drop in price or linger on the market until the owner did worthwhile…
It's actually even worse; a fresh coat of paint can truly hide actual problems. I've had that experience house shopping myself. I tended to shy away from places that smelled like paint, even though often they're painted for "good" reasons.
Hell, just last weekend I read a home inspection that specifically cited inability to assess interior and exterior wall cracking due to recent paint.