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How Zillow's homebuying scheme lost $881M

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

#551

Post by IshKebab »

escapedmoose wrote: post #223
wcfields wrote: post #20

Earlier quoted context omitted.

If I can give any home buying tip from my experience of buying two houses it's been to look at places that are in "the middle". Both homes I've bought in SoCal have had some god-awful photos online, and the finish is new-ish, but done by someone in the 70s so it's new but tacky in a little-old-lady way. This ends up pricing the house too expensive to flippers, and not nice enough to sell compared to other houses beca…

We took the same approach with our house, and the results were marvelous. Major props to our realtor for seeing the potential hidden in those god-awful listing photos.

The American house buying process is seriously weird!

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

#552

Post by refurb »

xenadu02 wrote: post #395
jjav wrote: post #336

Earlier quoted context omitted.

> > "no one can make you leave, ever, for any reason". > No place in the US actually has the latter Not technically, no. But there are areas (e.g. San Francisco) where getting a non-paying tenant out is close enough to impossible that it might as well be.

AFAIK that's not actually true. There are some crazy edge cases but for the most part if a tenant stops paying rent you can absolutely evict them in SF. Most of the horror stories from landlords are attempts to evict for reasons besides non-payment - which SF does make somewhat difficult.

You'd be surprised. SF Rent Board will always seek the solution that keeps the tenant in their home.

So a tenant might stop paying rent, a few months later you get an eviction hearing, but then the tenant pays the rent this month and promises to pay the back rent. Your eviction has just been denied.

Tenant falls back on rent again, but made a good faith effort to pay some of the back rent. Eviction denied.

Finally, tenant stops paying entirely and doesn't respond to you. You stand a pretty good chance of getting an eviction then.

Meanwhile, over the past 12 months the tenant made 2 full rent payments and a couple thousand on the $18,000 in back rent owed. They get evicted and you get to clean up the mess.

So yes, it's not impossible to evict a tenant, but it's really damn hard (unless it's for something like violence or failure to pay and no response when rent is demanded).

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

#553

Post by qeternity »

tshaddox wrote: post #197
a1pulley wrote: post #62

Earlier quoted context omitted.

> 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. I can easily see myself not being able to compete in algorithmically dominated markets flush with venture cash in the future and I earn more than just about everybody I know today. A thought exercise: suppose that no new houses are ever built and that housin…

> A thought exercise: suppose that no new houses are ever built and that housing turnover is nearly zero. What happens to the price of housing in that limit? Market forces do not necessarily entitle the top n% of the income distribution to housing. I don't think it's disturbing because "clearly the top 2% of income earners should be entitled to housing," but because clearly everyone needs housing, and if the top 2% o…

The reality that almost never gets brought up is that the other side of the coin is that these are natural pressures that are probably healthy.

We know that any given habitat, like the Earth, has finite resources and has some upper bound to supporting life. This is how those pressures manifest. We can’t just keep growing the population and have everything be affordable. Surging food, energy and housing prices are the first feedback mechanism in this process.

If everybody can afford everything forever, we get infinite population growth.

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

#554

Post by runeks »

pge wrote: post #112
haroldp wrote: post #24

Earlier quoted context omitted.

> 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. But iBuyers are always low-balling. They are bidding under the asking price with an all-cash offer that they hope will make up in speed and ease what it lacks in price. > It's not that uncommon to see nearly entire neighborhoo…

Zillow wasn't pursuing the strategy of a traditional iBuyer, which as you note is to lowball. Zillow thought they were providing a service of market-making and didn't consider the risks (I still don't see why it wasn't obvious to them...). If they offered some discount from the Zestimate, that would have been a lot smarter, but it would have undermined their goal of making a market, as well as undermining the very co…

> if Zillow says my house is worth X, why are they offering me 80% of X?

Because they want to make money. Which they can’t by buying for X and then selling for X.

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

#555

Post by dlp211 »

hackernewds wrote: post #501
garbagetime wrote: post #494

Earlier quoted context omitted.

Better location =/= more valuable location

why not?

Because better is subjective. NYC has more crime, worst public schools, and smaller homes than a lot of suburbs, but I guarantee that NYC is more expensive.

It's an extreme example, but it's not the only example.

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

#556

Post by mupuff1234 »

cuteboy19 wrote: post #550
mupuff1234 wrote: post #547

Earlier quoted context omitted.

If you account for societal benefits and not just the owner's personal gain then I don't think they are the same. It's really just matter whether you view regulations as legitimate tool to curve/change behaviors that you think are detrimental to society.

Legislating morality has been an utter failure. And here you advocating for legislating not morality but your own personal feelings and experiences. I take an issue with the entitlement that other people should change their behavior to protect your housing prices

I disagree it has been an utter failure, first exmaple that comes to mind is lack of affordable health care in US compared to most western countries, and other less "controversial" examples: child labor and minimum age for marriage.

And no I'm not advocating for anything based on my own personal feelings, but if something is deemed as harmful to society, yes perhaps we need to pass legislation to minimize it.

But also all laws in some way or other are based on morals - who decided that stealing is wrong? Why isn't it just fair use of "free market" of force?

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

#557

Post by ohgodplsno »

qeternity wrote: post #553
tshaddox wrote: post #197

Earlier quoted context omitted.

> A thought exercise: suppose that no new houses are ever built and that housing turnover is nearly zero. What happens to the price of housing in that limit? Market forces do not necessarily entitle the top n% of the income distribution to housing. I don't think it's disturbing because "clearly the top 2% of income earners should be entitled to housing," but because clearly everyone needs housing, and if the top 2% o…

The reality that almost never gets brought up is that the other side of the coin is that these are natural pressures that are probably healthy. We know that any given habitat, like the Earth, has finite resources and has some upper bound to supporting life. This is how those pressures manifest. We can’t just keep growing the population and have everything be affordable. Surging food, energy and housing prices are the…

People not being able to own homes is not "healthy". Having to pay 50% of your salary to landlords is not "healthy". It is concentration of wealth, it is the very definition of precarity. Unless your hope is to see a collapse of societies, things go really bad when people can't afford fundamental needs.

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

#558

Post by a_r41 »

cole-k wrote: post #541
diamondlovesyou wrote: post #531

Earlier quoted context omitted.

There isn't exactly a large market for homes at that price point. Plus at that price, a thorough DD is an order. So not unexpected that your home's value would be accurate.

What's "a thorough DD"? I assume it's building on the previous joke but I don't recognize the abbreviation.

Due diligence.

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

#559

Post by screenbreakout »

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,…

But in a way if the rental prices were to stay reasonable (say it was a non profit running the schtick) isn't a great way for as many people as possible to share a limited ressource? Maybe property is like golden handcuffs, nice but locks you down...again it's more a western thing as we in the east tend to buy cash down... Though I would like to see some company buying out the inner city ground floor space of some of the banks or insurances that ghostify my town and inject some fun rental people instead

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

#560

Post by taurath »

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…

We need to make primary residences extremely more advantageous tax-wise, and punish investment properties.
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