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How Zillow's homebuying scheme lost $881M

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

#491

Post by oldsecondhand »

Zircom wrote: post #450
beezle wrote: post #442

Earlier quoted context omitted.

Was told by local sherrif who handled judgment related asset seizures as well as foreclosure sales that in our state the original owner can do as they wish, even after a court ordered foreclosure sale, until they day they are required/made to vacate. He had seen all kinds of wanton destruction by the outgoing former owners simply out of spite with repair bills likely in the 10s of thousands, if not more.

That's a little different than a tenant who is renting wrecking someone else's property though, as the sheriff said in the case of foreclosures it's still their property up until the forced vacate date and they can technically do whatever they want and can't be sued for the damages, whereas tenants can but in most cases it's simply not worth it because the people you're suing usually don't have any assets or positive…

Legally different but still grudge and destruction with no or negligible chance of recourse.

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

#492

Post by esalman »

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.

Is the claim that not enough houses are being built or have been built backed up by data? Real estate investors don't seem to have much problem finding homes to turn into rentals.

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

#493

Post by epistasis »

jen20 wrote: post #488
epistasis wrote: post #487

Earlier quoted context omitted.

This comment and analogy fundamentally misunderstands the problem here, though: > the value of homes seems to be almost entirely divorced from the fact that people need homes to live in. The value of homes is so high precisely because people need somewhere to live, desperately. The price is not disconnected from need, it's entirely because of need. And it's not that wealthy people are buying and hoarding homes. There…

> And it's not that wealthy people are buying and hoarding homes. This is exactly what buy to let landlords are doing.

If they are renting them out, the homes are not being hoarded, they are being lived in.

The real problem isn't a problem of vacant units, it's a problem of unbuilt units.

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

#494

Post by garbagetime »

ipaddr wrote: post #261
dlp211 wrote: post #160

Earlier quoted context omitted.

Why is this being downvoted. It's completely correct. The value of a home purchase is not just the building, but the land it sits on. OP got a bigger, more modern house, with a larger yard for less, but it's meaningless until we understand the market circumstances of both homes for sale. It could be that Zillow is overpriced here, or it could be that Zillow is properly priced, we have no idea from the information pro…

You missed better location

Better location =/= more valuable location

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

#495

Post by [deleted] »

gregable wrote: post #209
tshaddox wrote: post #188

Earlier quoted context omitted.

> If the population rises and we refuse to build more houses Building more houses is generally good too, but it's a bit of a cop-out to blame the whole situation on that. Totally independent of supply concerns, I would argue that it's not great that in so many areas the value of homes seems to be almost entirely divorced from the fact that people need homes to live in . Imagine if a bunch of very wealthy people just…

Yes, and this would really be awful in the short term, but in the medium term medicine companies would just spin up more production until the "very wealthy people" demand has been met and medicine becomes available again at some reasonable price. The fact that this is very likely prevents most of the speculation in the first place. The difference with real estate is that the owners get to determine production levels,…

[deleted]

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

#496

Post by jijji »

its easy to lose money if you're buying at retail and then selling at retail... there is really no money to be made in that scenario. I buy and remodel and either sell or rent the houses I aquire, but I do this at drastically reduced rates below retail. IMHO its the only way to buy. Every property I invest in has a problem, which is why the price is so low, alot of times its 10x below retail because of this. The top reasons why a house might have a problem is 1) the owners died and taxes were never paid, 2) the bank (or an individual) foreclosed on it reducing the price, 3) there are leins from the county or federal government that are making the house not sellable or worth nothing as a result, 4) the house has permit or code enforcement issues that the owner cannot resolve on their own ... Anyway, the best way to buy property is this way, and one rule I learned from attending auctions in person along time ago (its mostly online now) was that once the bidding goes above a third of its retail value, I'm out... Because sometimes you may have to invest 10-40k to make a house back to normal, and so paying even half its retail value just makes no sense.

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

#497

Post by davidw »

WindyLakeReturn wrote: post #479
davidw wrote: post #447

Earlier quoted context omitted.

> The difference with real estate is that the owners get to determine production levels, via local zoning laws. I'm part of a local YIMBY group, and show up to hearings to try and get housing built, write letters, etc... I have never, ever seen 'investors' write in or speak at these things. It's all our neighbors who show up and scream about not building homes.

Could this be a side effect of efficiency? Much more efficient for the investors to push for the ideas that lead to local homeowners showing up to protest than to protest themselves.

Investors don't have a voice locally. They don't write letters to the editor or post on Nextdoor. Pretty much all they have to do is sit back and reap the benefits of angry neighbors doing all the dirty work of preventing homes from being built. It's a pretty sweet gig. They even say this stuff straight up in their SEC filings.

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

#498

Post by BeetleB »

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,…

> It's honestly quite scary how I'm in the top 2% of income earners in my generation and yet I could barely afford to buy a small place in a semi-desirable area.

Top 5% puts you at over $300K/year. Top 2% is much higher.

Even a top 5% person can easily afford a house in any semi-desirable city. LA, Bay Area are not semi-desirable. They are highly desirable.

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

#499

Post by AlwaysRock »

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.

Sure building more houses help but many houses sit empty. There are other problems.

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

#500

Post by hackernewds »

phlowbieuq wrote: post #362
encoderer wrote: post #21

I was at Zillow for many years and left in 2020. On the tech side the pivot into iBuying was absolutely bonkers. The message from senior leadership was basically: I have no idea what your teams should be working on but it’s definitely not what they are currently working on so stop that and figure something else out. This has nothing directly to do with their market failure but they probably are driven by the same lea…

i wish we lived in the same area and could have an OTR conversation about this. believe it or not, the new "strategy" now that ZO is all shut down is even less well-defined and more pie-in-the-sky than ZO ever was.

what is ZO?
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