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

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

#351

Post by Apofis »

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…

So? Flip yourself then. Buy a 2 family unit, renovate it while you live in one of the units, and then flip when you're done. Repeat a second time. Now you're set. All of this is folded into your mortgage. If you're not a capitalist, you're not going to have a good time since no one is going to break your doors down to save you.

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

#352

Post by ashtonkem »

muttantt wrote: post #11

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 think it’s a bit like when Amazon bots would occasionally drive up the cost of some random book into the millions, except they managed to fool each other into actually buying the damned thing.

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

#353

Post by hbarka »

mavhc wrote: post #346
fspeech wrote: post #339

Earlier quoted context omitted.

"by letting a gap grow in front of me that would absorb the wave" would cause the freeway to carry fewer cars if everyone does it. My oldest one used to argue with me on this point when I asked him to keep a bigger gap from the car in the front for safety reasons.

Not if they all go faster. The human induced delay is the problem. Plus it causes accidents, which really slows down the system.

Ever since driving an electric car, I have come to believe that a gas-throttle car’s laggy response during stop and go traffic may be responsible for the elasticity of the delay propagation. From zero, a piston pumper goes through a complicated series of windups which seems like days compared to an electric motor.

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

#354

Post by sollewitt »

RNCTX wrote: post #269
trident5000 wrote: post #121

Earlier quoted context omitted.

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…

What is this green card prioritization mechanism you allude to?

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

#355

Post by ashtonkem »

qqqwerty wrote: post #72
muttantt wrote: post #11

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…

This is an interesting lesson in algo trading run wild. Roughly, 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. If Zillow was the only iBuyer in a particular market, then that ceiling would likely have held, as all other non-zillow sales would still be operating under the loan approval constr…

The iBuyers[0] are also capable of accidentally cornering a small market to weird consequences. When that happens, prices can temporarily spike and buyers can decide to defer their purchase/move until prices come down more.

This is particularly pernicious because while there is a ton of housing, very few actual units in a city are ever on the market at once, making it easier for a well capitalized buyer to corner. My small city (pop ~1mil) only has 638 units for sale according to Zillow, which is pretty small all considered.

0 - What an unfortunate name we’ve settled on. Reminds me of the era where every cheap infomercial product had to ape Apple naming conventions.

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

#356

Post by hbarka »

devnull3 wrote: post #250
AareyBaba wrote: post #16

Earlier quoted context omitted.

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.

lol ... this infact is the sample problem which Andrew Ng explains in his famous Machine Learning course on Coursera!

Wait, can you elaborate? I’m sincerely interested in going over that material.

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

#357

Post by ashtonkem »

copenja wrote: post #148
trident5000 wrote: post #121

Earlier quoted context omitted.

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…

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?

Perhaps. Unlike in 2008 though, those buyers aren’t typically hoping to sell those houses for a short term profit, most of those investors are hoping to turn them into rent income. This could easily distort prices, and have pernicious social effects, but might not be an asset bubble. After all, if those investors manage to actually charge enough rent to make a profit, is the asset really over priced then?

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

#358

Post by UncleEntity »

93po wrote: post #223
pcwalton wrote: post #202

Earlier quoted context omitted.

I don't consider it evil. When you buy a house, fix it up, and resell it, you're essentially providing a renovation service to whoever will buy it next. There's no meaningful difference between you renovating a house and selling it and an owner-occupant buying the house and renovating it themselves. In this case, Zillow bought houses too high and sold them too low. As a result, the market punished that irrational beh…

If there's no difference then there'd be no profit for Zillow and they wouldn't be doing this to begin with. Clearly there's a difference and it's morally bankrupt

Isn’t this whole issue based on the fact that there is no profit for Zillow and they are no longer going to be doing this?

Half a billion dollar loss seems like a pretty good indication that maybe…

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

#359

Post by Gatsky »

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…

Note that the free market has ultimately punished these companies. On the other hand, the unaccountable councils and politicians are the ones creating the problem due to zoning an supply issues. As such, I think the outrage is a bit misdirected (as it often is).

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

#360

Post by michalu »

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…

Since I don't own any properties I must have some loose screws in my head as apparently only 2 options are available. :)

It must be this then that leaks some questions in my thoughts.

What if the money you buy the properties with is a result of your contributions?

Is there a decent and accessible way to have funds to buy such properties while not having to contribute first?

Let's say I've spent 20 years working 12 hours a day contributing about 4x the average productivity - would it be ok to buy properties and continue not contributing or should I be forced to continue contributing?

What is the optimal path to reap rewards of my contributions? Having taxpayers pay that money to me in a form of retirement is one way, but what if I paid 10x more taxes as a result of my contributions should 10 other people pool their taxes to pay my retiremenet to make it fair? Or will I get the same as those who worked half what I did?

I remember my father told me that in communism there were two options as well, you either had to contribute how you were told or else you were a parasite and put to jail. Seemed fair to many.

In 1920s Russia they mostly genocided them - this is not considered fair these days.

I guess the reason it seemed fair to many is that there is truth to the simplistic formulation of your feelings.

The best definition of evil I've ever heard was - "all evil is perverted good, and it is that aspect of the good which it retains that makes it attractive to many people"

Anyway, writing this as someone "without a dog in the race" what about your dogs in the race - you mentioned you were looking at properties right now?

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