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How Zillow's homebuying scheme lost $881M

fullstackeconomics.com

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

#511

Post by xyzzyz »

jasd wrote: post #448
pj_mukh wrote: post #427

Earlier quoted context omitted.

Land is a finite resource but housing units are not. Once America gets over it’s love affair with single family homes, we could undercut most speculators by just building up.

In the last 2 years condo prices in the Seattle area have stayed flat while everyone is desperate to buy townhomes and single families that are becoming out of reach for most. That makes me wonder if building up will actually fix the issue.

Yeah, most condos in Seattle are in downtown area, and downtown Seattle really went to shit over past few years. Places are closed down, crazy homeless harass you on every intersection, and trash and tents are everywhere. No wonder few want to live there, keeping pressure on prices relatively low.

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

#512

Post by conradev »

tshaddox wrote: post #188
paxys wrote: post #40

Earlier quoted context omitted.

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.

> 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…

The problem is that you can charge rent on a house but not on medicine.

The problem in the market is that buying real estate is the economically rational thing to do, because you get great returns on that capital, just like owning some amount of stock.

The problem is primarily the structure of the market, and not the actions of individuals within it. We need a land value tax, and we need to make it easy to build new homes.

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

#513

Post by midhhhthrow »

3np wrote: post #401
paxys wrote: post #221

Earlier quoted context omitted.

Thing is if people start hoarding medicine then new companies can pop up and fill in the gap, or existing ones can increase production, making the whole thing pointless to do. Same goes for every other "necessary to life" product. Temporary disruptions will be handled by the market in the long term, and in the worst case government can step in and regulate. Housing is probably the only sector where all the laws and r…

This is missing the point that land is a finite resource and homes aren't fungible. It doesn't help most Californians that more homes can be built in rural Arkansas.

The problem isn’t finite land. It’s finite voters and the politicians that represent them. In CA, the most crowded state, There are more acres than people! And somehow we still have a housing shortage.

You can go out into the middle of nowhere in CA and find houses huddled together 2 feet from another behind a giant wall, like some kind of nazi concentration camp for houses. And the sadest part is that there’s tons of land in every direction you look and people are forced to commute vast distances.

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

#514

Post by kortilla »

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,…

> entire neighborhoods converted to short term rentals now in some areas where they're still legal. Hearing that really depressed me.

Why? It makes me happy that more people get to enjoy a desirable area rather than using the law to keep them out.

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

#515

Post by bastawhiz »

judge2020 wrote: post #29
bastawhiz wrote: post #6

I recently bought a home. We toured a Zillow home, and I can understand what they were going for and where they failed. We were able to pull up to the driveway, book a tour for that minute, and walk in the front door. It was almost a magical experience compared to the process of finding and going to showings. The listings were clear and thorough. The experience was extremely compelling. The downside: the homes were a…

> The downside If this wasn’t another house in the same neighborhood then the differentiator most certainly wasn’t Zillow or their pricing.

It was within about five minutes drive

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

#516

Post by kortilla »

3np wrote: post #401
paxys wrote: post #221

Earlier quoted context omitted.

Thing is if people start hoarding medicine then new companies can pop up and fill in the gap, or existing ones can increase production, making the whole thing pointless to do. Same goes for every other "necessary to life" product. Temporary disruptions will be handled by the market in the long term, and in the worst case government can step in and regulate. Housing is probably the only sector where all the laws and r…

This is missing the point that land is a finite resource and homes aren't fungible. It doesn't help most Californians that more homes can be built in rural Arkansas.

In the US we are nowhere near land being a concern. That’s a cop-out.

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

#517

Post by bastawhiz »

TomVDB wrote: post #369
bastawhiz wrote: post #6

I recently bought a home. We toured a Zillow home, and I can understand what they were going for and where they failed. We were able to pull up to the driveway, book a tour for that minute, and walk in the front door. It was almost a magical experience compared to the process of finding and going to showings. The listings were clear and thorough. The experience was extremely compelling. The downside: the homes were a…

I’m surprised you have an issue with arranging visits to open houses? Open RedFin, check the houses for sale, go to the open house when there is one? That’s at least how it works in the Bay Area. We never had to schedule or book anything, and only after seeing a house we liked, we asked our agent to check it out and submit an offer.

The house I bought was listed for two weeks. They had one day of showings. The following day they stopped accepting offers. Maybe it's different in the Bay, but here in Raleigh houses are available to tour for essentially eight hours.

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

#518

Post by bastawhiz »

awb wrote: post #161
bastawhiz wrote: post #6

I recently bought a home. We toured a Zillow home, and I can understand what they were going for and where they failed. We were able to pull up to the driveway, book a tour for that minute, and walk in the front door. It was almost a magical experience compared to the process of finding and going to showings. The listings were clear and thorough. The experience was extremely compelling. The downside: the homes were a…

> the homes were absurdly overpriced That’s saying a lot for a red hot real estate market. I still get updates from Zillow every month saying my home increased 5% in value in the last 30 days and up 30% over the last 12 months. Something is wildly off with their algorithm.

The agent I was working with showed me two houses on the same block that were much more modern and had sold for less within the previous few months. The Zillow house in question had been on the market for almost four months and was in far worse shape.

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

#519

Post by bastawhiz »

hammock wrote: post #365
bastawhiz wrote: post #6

I recently bought a home. We toured a Zillow home, and I can understand what they were going for and where they failed. We were able to pull up to the driveway, book a tour for that minute, and walk in the front door. It was almost a magical experience compared to the process of finding and going to showings. The listings were clear and thorough. The experience was extremely compelling. The downside: the homes were a…

Sounds nice. Where do you live?

Raleigh NC! Nice weather, friendly people, adorable housing, good food. The only complaint I have is that you need to drive literally everywhere.

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

#520

Post by chii »

tmp_anon_22 wrote: post #439
pj_mukh wrote: post #427

Earlier quoted context omitted.

Land is a finite resource but housing units are not. Once America gets over it’s love affair with single family homes, we could undercut most speculators by just building up.

Single Family homes have the benefit of more autonomy where as building up means you're living on-top of your neighbor, its not binary but we should acknowledge the clear QoL tradeoffs of condensed living. Maybe its inevitable and necessary to force more people into condensed housing, maybe the societal benefits really outweigh the tradeoffs.

> clear QoL tradeoffs of condensed living.

and that's why single family homes should be more expensive, because it is better. People continue to bid it up, because they still believe that the price is worth and hasn't reached a ceiling yet.

In asian hubs like hong kong or shanghai, they've reached a certain ceiling on land, and so building up is now what most people could buy and so they do that. The cities in countries like canada, australia and the west coast of the US, it hasn't reached that point due to large available land mass, and people prefer commute (or WFH now!) over living densely.

Of course, regulation plays a part - i think there's unnecessarily large amount of red tape in making taller denser buildings, as well as a lobby of existing owners who don't want it near themselves.

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