Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

marketwatch.com

Post reply on HN
Print view View original

401–410 of 476 posts

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

#401

Post by imtringued »

oarabbus_ wrote: post #313
selcuka wrote: post #220

Earlier quoted context omitted.

If the current value of something is over a "fundamental ceiling" it means that it's already inflated. Why would an investor park their wealth in such an asset?

P/E ratios of much of the S&P500 would indicate prices/values far over the fundamental value, yet investors continue to flock to large-cap equities in droves.

It's a bubble but it's hard to fight it. US runs a trade deficit vs other nations meaning the trade surplus nations have too many dollars which they send into the financial markets of the US. They most likely buy international companies that have a presence in their own country.

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

#402

Post by SergeAx »

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…

Although I mostly agree with your point except it being unnecessary emotional, I want to bring your attention to the fact that for some people having enough money to buy a house means that they contributed to the society and was rewarded with this wealth for it.

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

#403

Post by ca01an »

anchpop wrote: post #203
iskander wrote: post #159

Earlier quoted context omitted.

Because they would outbid people who actually want to live in those homes, essentially front-running the middle class to earn a massive profit.

> Because they would outbid people who actually want to live in those homes If they outbid everyone who actually wanted to live there, who were they planning to sell to? :P Buying things you think are underpriced and reselling them is not frontrunning. (Ever since GME, a lot of people learned the word frontrunning and started using it in every possible situation.) Zillow's plan was to act as a market maker. Market ma…

How does this benefit purchasers in any way? Did you mean to say it benefits the seller?

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

#404

Post by maest »

hoseja wrote: post #395
WalterBright wrote: post #275

Earlier quoted context omitted.

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…

>letting a gap grow in front of me How do you prevent someone from just filling the gap? If it's large enough to absorb the wave, someone will fill it just out of spite.

I sometimes do what the gp said - let a gap grow in front of me if I'm in stop-and-drive traffic and get annoyed when someone selfishly rushes to fill the gap in front of me only to have to break 60 seconds later.

On further reflection, that's not necessarily selfishness, more that they don't understand what I am trying to do, but there's no way to communicate complex information car to car on a highway.

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

#405

Post by maest »

lordnacho wrote: post #364
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 spent a lot of time doing quant models for financial products. Two lessons: - It's easy to get wrong. If you see a lot of opportunity all the time, it's your model that's wrong, not the market. Very trivial things can mess up your model, like not understanding what the input data means. - Good trades are hard to get, common rule of thumb that your boss will tell you. Someone selling a house too cheaply? Either ther…

> arbitrage bot from Bitstamp to MtGox once

The issue with that arbitrage is that it was always one-sided. If you're arbing 2 equivalent markets (e.g. name trading on two different US exchanges), you'd expect to buy and sell on both markets in equal amounts, on average.

Bitstamp vs Mt Gox arb required traders to always buy BTC on Mt Gox and sell on Bitstamp (which is a strong indicator of cp risk). This makes inventory management very difficult - especially towards the end of Mt Gox where fund withdrawal times were of the order of months.

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

#406

Post by withinboredom »

moconnor wrote: post #343
withinboredom wrote: post #212

Earlier quoted context omitted.

I worked on software that did algorithmic pricing. It was a race to the bottom because some bozo wanted to be on the first page of sellers. So they’d price it one penny under the lowest price. The next seller would match it. Before you knew it, the product was worth dollars or cents. We also had people do it on purpose (we called it price bombing), but that was easy to negate since we filtered out competitors with lo…

Why does pricing competitively to appear in the front page earn the label “bozo”? Should they prioritise the effects on the market ahead of their own profits or goals? It sounds like a really interesting story that’s missing a few steps due to space - it’d make a great blog post in detail!

There has to be a floor. This is the point where no one is making any money, ever. You can sell below the floor when you’re just trying to make some inventory space because the things you can replace that space with is more profitable. But “bozos” were people who would irrationally price one penny less, even below the floor. Once a couple of them got in the same listing, the value of the item would drop pretty slowly over the course of days or weeks. Especially if their inventory was in the 10-40 range (yeah, we had a way to guess other people’s inventory) and the velocity of the item was 1-2 per week. With the value of the item dropping by a penny every day, we could work out how long we had. Sometimes we would just outright buy their entire inventory just to get rid of them and get the price under control for high value items. People pricing competitively above the floor was fun to write software for. It was the irrational actors that could seriously damage things for everyone.

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

#407

Post by withinboredom »

mavhc wrote: post #348
withinboredom wrote: post #212

Earlier quoted context omitted.

I worked on software that did algorithmic pricing. It was a race to the bottom because some bozo wanted to be on the first page of sellers. So they’d price it one penny under the lowest price. The next seller would match it. Before you knew it, the product was worth dollars or cents. We also had people do it on purpose (we called it price bombing), but that was easy to negate since we filtered out competitors with lo…

Now most used books on Amazon cost 1 cent, with $10 shipping costs, because that's the default sort

They make a killing on that shipping too, you’re paying retail rates for shipping, but you better believe they have contracts with DHL, USPS, etc. that is well below retail cost.

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

#408

Post by oars »

rflrob wrote: post #100
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…

My favorite story of algorithmic pricing gone mad was discovered by a postdoc in my grad school lab, leading to an out of print book being listed on Amazon for over $23 million: https://www.michaeleisen.org/blog/?p=358

This is great. Thanks for posting.

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

#409

Post by Valakas_ »

devnull3 wrote: post #253
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…

> 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…

The thing with FIRE movement is more about escaping being forced to work soul sucking jobs, commuting, management, mindless boring tasks.... And it's not always easy to change fields, or change company, move city, ....

People that I know that are already FIREd or plan to don't actually intend not to work. They want to, but on things they actually enjoy. If there was UBI the FIRE movement would go significantly down because one of it's main goals would be achieved by default. Right now the only way to get those goals is with passive income from investments.

We have this one life, and wasting it is not the way to go. FIRE people don't want the riches or hoarding insanes amount of money for power trips with their buddies. Most are very frugal in fact, that's the only way to achieve FIRE in the firs place. They just want the freedom from forced work. That is the essence of the FIRE movement.

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

#410

Post by Valakas_ »

AussieWog93 wrote: post #136
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…

In defense of Zillow, they weren't looking to buy a "portfolio" of houses - they bought as many as they sold, and didn't have any net negative effect on housing supply. Yes, they're profiting off of a bad situation, but they're not the cause of it. Bev from the local council's planning department, as well as Michael Caton's horrific propaganda piece, has done more damage than every flipper combined.

Would there be a bad situation if there was nobody profitting from it? Maybe there is a root cause, but Zillow is certainly one cause why this is so bad. Not the root one, but a cause still.
Post reply on HN