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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

#411

Post by pas »

iskander wrote: post #304
anchpop wrote: post #203

Earlier quoted context omitted.

> 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…

>If they outbid everyone who actually wanted to live there, who were they planning to sell to? :P The same set of people who would move their price points up after a few months and get larger mortgages. This worked for all of 2020 and most of 2021 and only the past quarter did it fail as a strategy. >Buying things you think are underpriced and reselling them is not frontrunning. (Ever since GME, a lot of people learn…

> They have unique information about demand for houses and even get to influence prices upward through Zestimates.

And that's the same shit booking.com tried to pull, that got them in trouble with the EU market authority. (If I remember correctly.)

The trading department should be separate from the affiliate department. Otherwise it's LIBOR scandal all over again. :|

> The same set of people who would move their price points up after a few months and get larger mortgages. This worked for all of 2020 and most of 2021 and only the past quarter did it fail as a strategy.

If they have a few months. Sitting on empty houses is not free.

Though the whole problem with Zillow seems to be that they disrupt the local markets, because due to their sheer volume they effectively corner each local market where they operate, which makes them able to set prices.

(But then why have they stopped? Probably they realized they'd need more money to do that effectively, or that they'd get a huge asswhoop eventually. Or that they were unable to hedge their risks.)

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

#412

Post by chiph »

woeirua wrote: post #7

This is kind of a big deal in the real estate sector. The only reason that Zillow would sell everything right now is if they believed that the carrying costs of the properties until they (eventually) sell would eat all of their profits. They must be seeing flashing red signs across the board that there's a slowdown in the market and that scenario is exactly what will play out if they don't exit quickly. There's no wa…

What I'm waiting on is for the Wall Street firms to decide that being a landlord isn't for them. Either because the margins aren't what were predicted, they don't want to be in the handyman business making repairs the tenants need, or because something else becomes trendy.

The aftermath when they decide to unwind their positions will be far-reaching. Probably not another 2008, but it'll certainly depress valuations across the country. Like you said, if you're buying now, buy because you need a nice place to live, not because you intend to flip.

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

#413

Post by ericmay »

LordDragonfang wrote: post #388
grayhatter wrote: post #383

Earlier quoted context omitted.

Oh boy, this jumps around a lot and very little is very deep so my answers will have to jump around a bit to make sure I didn't miss anything. > Are you asking why, in a system that its supporters claim is a meritocracy, who's made these assertions, and where? Not anywhere in the thread's I've read... > it wrong for it to be easier for the rich to get richer than for the poor to achieve parity, given equal merit? Is…

>I'm not trying to argue anything, I'd like like try and tease out arguments worth considering. Hacker News comments aren't this place for this. https://news.ycombinator.com/newsguidelines.html >Be kind. Don't be snarky. Have curious conversation; don't cross-examine. Please don't fulminate. Please don't sneer, including at the rest of the community. >Comments should get more thoughtful and substantive, not less, as…

If you’re going to quote “the rules” would you mind following them as well?

> Be kind. Don't be snarky. Have curious conversation;

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

#414

Post by grepfru_it »

hbarka wrote: post #353
mavhc wrote: post #346

Earlier quoted context omitted.

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.

Throttles have only become drive by wire over the last 15 years, prior to that it was cable actuated and was instantaneous. Like a lawnmower. One could argue carburetor cars were even (a fraction of a second) more responsive.

Also if you WOT a modern car you get the instant response without the ecu calculating pedal angle, comparing to accelerator history, humidity factors etc etc but kiss fuel efficiency bye bye. There are mods and tunes that reprogram the fuel map to cut out this processing time

I also drive a big turbo family sedan and am used to saying 2 Mississippi before the engine pulls at full boar

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

#415

Post by pas »

jnwatson wrote: post #258
maxsilver wrote: post #190

Earlier quoted context omitted.

> 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…

There are several TV shows that show house flippers. You think that's immoral? For each property, they engage in two transactions for which all parties involved are willing participants. How is that immoral?

Willingness is not necessarily, informed consent, and even that might be due to exogenous probabilistic predetermination.

So if we go by Rawlsian concepts: if it's not fair, it's immoral. If the market maker makes too much, then it's economic rent (due to rent-seeking behavior), which a lot of people consider immoral.

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

#416

Post by dogman144 »

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

Framing Zillow v residential buyers as some efficient market where Zillow is competing like anyone else and not only that, providing critical liquidity via DMM capabilities (designated market maker) is absurd on multiple levels.

DMMs operate on exchanges with membership licenses and a galaxy of exchange regulations, especially around price moves. Zillow and the open real estate market has none of that. Similarly, a DMM would not outbid and market capture the way Zillow does. Another one you wouldn’t see on an exchange with DMMs is the army of debt financing behind Zillow vs what’s behind retail purchasers. Explaining beyond that how framing Zillow as a DMM is a cherrypicked approach with no basis in real estate market reality is not worth the time. It’s really a nothingburger of an approach that comes off as a quote from a Rand book.

At its core, a DMM provides liquidity. Zillow buying real estate, taking it off the market for a month to renovate and flip at a higher price, is not that.

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

#417

Post by lathiat »

grepfru_it wrote: post #414
hbarka wrote: post #353

Earlier quoted context omitted.

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.

Throttles have only become drive by wire over the last 15 years, prior to that it was cable actuated and was instantaneous. Like a lawnmower. One could argue carburetor cars were even (a fraction of a second) more responsive. Also if you WOT a modern car you get the instant response without the ecu calculating pedal angle, comparing to accelerator history, humidity factors etc etc but kiss fuel efficiency bye bye. Th…

Though drive-by-wire throttles absolutely do modify and potentially hold back your throttle input for reasons of both economy, comfort and enforced driveline sympathy, there is also an inherent response difference between petrol and electric engines and also slop in the driveline system. That difference varies on the engine and transmission type.

Unfortunately I cannot find an easy good reference on what exactly that difference is quantifiably. Also many of the Electric cars right now are higher end even sporty vehicles, and more likely to have a throttle mapping that is more direct.

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

#418

Post by hallway_monitor »

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.

That's what I thought too until I started practicing this. Probably 75% of the time no one comes into the lane. It takes some practice to find the correct gap size.

Besides saving your clutch, you can do this type of brake-early maneuver at stoplights. Decelerating early and coasting at a lower speed means you don't have to stop and can increase your gas mileage significantly.

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

#419

Post by deelowe »

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…

Come on. You talk about SV types not knowing what they are doing and then offer this up as an explanation?

Real estate is going up in value for the following reasons:

- Almost 2 decades of QE and cheap loans

- More people working from home

- Boomers leaving the workforce and cashing in their retirement

- People leaving high cost of living areas

- Foreign investment

There is no conspiracy. As these things pull back, and they will in the next 5+ years, things will soften. What Zillow was trying to do is something a bit different but it doesn't matter because they ultimately failed.

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

#420

Post by raducu »

anchpop wrote: post #251
whimsicalism wrote: post #249

Earlier quoted context omitted.

> If they outbid everyone who actually wanted to live there, who were they planning to sell to? :P I mean, exactly - they lost $550 million. Didn't stop them from burning massive capital reserves to outbid tons of people and fuck up the market a bit for them on a bad bet.

So they basically gave $550 million to UMC homeowners by overpaying for houses, while making it slightly harder for other UMC wanna-be homeowners to buy homes for a couple months. Not the worst outcome I can imagine

Is it 100% guaranteee the $550 million won't be a bailout of some sorts?
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