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Zillow seeks to sell 7k homes for $2.8B after flipping halt

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Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#591

Post by tjr225 »

duped wrote: post #476
tjr225 wrote: post #222

Earlier quoted context omitted.

Look at any moderately sized midwest cities subreddit and you will find countless posts about rapidly rising housing costs.

I live in a moderately sized Midwestern city. We don't have a shortage of new construction or regressive zoning laws.

Well, that’s fantastic for you.

I’ve got friends in Kansas City whose 100k house is now worth 300k. Friends in Omaha buying new construction for 400k. Housing shortages in Grand Rapids, Michigan where I am from. If you’re immune to all of this, you must be in either a very magical, or very undesirable place. It must not be California, that’s for sure.

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#592

Post by dionidium »

greendude29 wrote: post #568
dionidium wrote: post #395

Earlier quoted context omitted.

I'll be the YIMBY broken record here. These institutional investors are suddenly interested in housing because decades of artificial constraints on new construction have created a situation where prices are rising quickly as demand outpaces supply. Don't believe me? Here's the SEC filing from one such investor: > We have selected locations with strong demand drivers, high barriers to entry and high rent-growth potent…

There is a global surge in housing prices. There are cities like Vancouver and Toronto where there has construction of 1000s of units has accelerated for decades, but the same crises exists. Are you sure you aren't just thinking within the box of the United States?

I don't accept the premise. Vancouver sure looks a lot different than it did 30 years ago, right? Well, certainly the peninsula/downtown does, but most of the city is still zoned for single-family housing:

http://www.datalabto.ca/wp-content/uploads/2019/07/thumb_nai...

Even Vancouver isn't building anywhere near what the demand would support. If people were allowed to build more housing in Vancouver, then they would. [0]

In general, people's intuition on this stuff isn't great, for a few different reasons:

1. Status quo bias. Any change tends to look like a lot of change. This is the, "I can see three cranes from where I'm standing, so we must be in a construction boom" fallacy.

2. Illusion that concentrated change indicates widespread change. People see a lot of development in one part of town and discount that such development is prohibited in 98% of the city. (This one definitely applies to Vancouver.)

3. Failure to account for proportionality. If somebody hears that a city added 5000 units, they'll probably think that's a lot. But is it? What if we're talking about a metro area with 10 million people? It's nothing. Big numbers can end up being small numbers when the scale is large enough.

3. Failure to account for growth in demand/population. We build fewer houses than we did 100 years ago, but we also have many times as many people! So even a static supply is bad, because you have to at least build enough to keep up with growth. And since some cities have seen a sustained surge in demand for the last 2 or 3 decades without enough construction, even seemingly large amounts of recent development might mean that you're still way behind.

[0] I'm aware that Vancouver has made some progress on this. I think they're going to start allowing more duplexes and more housing near SkyTrain stops. I don't follow Vancouver that closely, so I'll just note that I'm aware it's changing.

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#593

Post by seanmcdirmid »

dionidium wrote: post #592
greendude29 wrote: post #568

Earlier quoted context omitted.

There is a global surge in housing prices. There are cities like Vancouver and Toronto where there has construction of 1000s of units has accelerated for decades, but the same crises exists. Are you sure you aren't just thinking within the box of the United States?

I don't accept the premise. Vancouver sure looks a lot different than it did 30 years ago, right? Well, certainly the peninsula/downtown does, but most of the city is still zoned for single-family housing: http://www.datalabto.ca/wp-content/uploads/2019/07/thumb_nai... Even Vancouver isn't building anywhere near what the demand would support. If people were allowed to build more housing in Vancouver, then they would.…

Vancouver is the 4th densest city in North America (> 250k people). They have plenty of multi-story condos/apartment buildings, they also had these 30 years ago (as a kid growing up in Seattle, I would always marvel at how dense Vancouver was compared to our city in the south). So while sure, Vancouver could become even more dense until speculators had enough of the market (same thing happened in the late 1980s during the Japanese bubble, Vancouver got burned for it in the 90s), they are already doing plenty well comparatively.

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#594

Post by nwomack »

pdonis wrote: post #545
wolverine876 wrote: post #539

Earlier quoted context omitted.

> The Fed has essentially trapped us in a system where the likes of blackrock get access to essentially free Fed printing press money right of the rollers that they then use to buy up real assets at inflated prices, which only drives up the inflation that thereby also drives up the value of previous purchases at near zero rate interest. It's a trendy thing to say, especially in certain political circles, but could yo…

> could you substantiate it with something from a serious, non-partisan economist? The fact that printed money is fueling the housing market does not require an economist to see; it is obvious from comparing two simple observations: (1) Americans expect to be able to get 30 year mortgages at rates around 3%. (2) Americans expect to be able to invest their retirement savings in stocks and bonds with a long term rate o…

Yes I agree with this. In fact, having already done this math myself I am basically maxed out in house loans, i even took a cash out loan on my rental and dumped it into the stock market… I have already made an absolute killing doing this. Unfortunately I am not that smart and like you say, everybody else can come to this same conclusion. It will not end well.

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#595

Post by dionidium »

seanmcdirmid wrote: post #593
dionidium wrote: post #592

Earlier quoted context omitted.

I don't accept the premise. Vancouver sure looks a lot different than it did 30 years ago, right? Well, certainly the peninsula/downtown does, but most of the city is still zoned for single-family housing: http://www.datalabto.ca/wp-content/uploads/2019/07/thumb_nai... Even Vancouver isn't building anywhere near what the demand would support. If people were allowed to build more housing in Vancouver, then they would.…

Vancouver is the 4th densest city in North America (> 250k people). They have plenty of multi-story condos/apartment buildings, they also had these 30 years ago (as a kid growing up in Seattle, I would always marvel at how dense Vancouver was compared to our city in the south). So while sure, Vancouver could become even more dense until speculators had enough of the market (same thing happened in the late 1980s durin…

I'm I guess what you would call a supply and demand absolutist. There's no "correct" amount of development or "optimal" level of density (wrt prices, I mean; obviously people have preferences). If you let demand outpace supply, then you should expect the available market-rate housing to increase in price. (And that's true even if you think your city is building a lot, or if you think it's already really dense, or if you think it already has a lot of people and big buildings, and so on.)

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#596

Post by xenadu02 »

adam_arthur wrote: post #445
delfinom wrote: post #438

Earlier quoted context omitted.

This is the end game of the baby boomers and economy really. Collectively everyone is hoarding onto property for their nest egg, investment funds get piles of their money from 401ks and pensions as well to invest into areas like real estate. A large chunk of retirement is now predicated on maintaining or increasing property values. The fed is now so fucked it can't even raise rates without immediately causing propert…

The solution is simple. Raise rates and let asset prices normalize, regardless of the consequences. There will be pain in the short term, but you're creating opportunity for future generations. Policy right now is all about pulling prosperity from the future into the present. IE higher valuation multiples today enrich current asset holders, but leave little growth for future asset holders It used to be that the Fed w…

> The solution is simple. Raise rates and let asset prices normalize, regardless of the consequences.

This is the exact policy adopted by the Fed in 1929: purge the bad out of the system. Let the failing banks go bankrupt. That turned what was a recession into a full-blown deflationary credit crunch.

All the high-and-mighty theory and bloviating may not mean much in the face of 25% unemployment, wages falling 50%, and 15%+ contraction of global GDP.

I agree there needs to be moral hazard to investing and interest rates are to low... but be careful what you wish for.

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#597

Post by pdonis »

zzzzzzzza wrote: post #580
pdonis wrote: post #545

Earlier quoted context omitted.

> could you substantiate it with something from a serious, non-partisan economist? The fact that printed money is fueling the housing market does not require an economist to see; it is obvious from comparing two simple observations: (1) Americans expect to be able to get 30 year mortgages at rates around 3%. (2) Americans expect to be able to invest their retirement savings in stocks and bonds with a long term rate o…

the money being lent is bank money.. not printed by the fed but by your local bank.

Your local bank can only "print" the money because that amount of money is in its account at the Fed. It's the Fed that's actually creating the money.

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#598

Post by davidw »

seanmcdirmid wrote: post #571
davidw wrote: post #557

Earlier quoted context omitted.

Demand certainly contributes to rising prices if supply lags. Houston does a much better job than other places of adding supply, and part of that is their 'zoning-lite' approach.

I don't know. If Houston is the poster child for the zoning-lite approach, a lot of people won't be interested in going in that direction. Or to say, if zoning creates a problem with affordability and the lack of zoning creates a problem quality of life, it doesn't sound like getting rid of zoning is a no brainer.

I'm not really sure where that article gets its data, but the actual price of homes in Houston is low despite a lot of people moving there and the economy thriving. Seems relevant.

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#599

Post by dd36 »

pdonis wrote: post #597
zzzzzzzza wrote: post #580

Earlier quoted context omitted.

the money being lent is bank money.. not printed by the fed but by your local bank.

Your local bank can only "print" the money because that amount of money is in its account at the Fed. It's the Fed that's actually creating the money.

Few banks get anywhere close to their reserve ratio.

Re: Zillow seeks to sell 7k homes for $2.8B after flipping halt

#600

Post by seanmcdirmid »

dionidium wrote: post #595
seanmcdirmid wrote: post #593

Earlier quoted context omitted.

Vancouver is the 4th densest city in North America (> 250k people). They have plenty of multi-story condos/apartment buildings, they also had these 30 years ago (as a kid growing up in Seattle, I would always marvel at how dense Vancouver was compared to our city in the south). So while sure, Vancouver could become even more dense until speculators had enough of the market (same thing happened in the late 1980s durin…

I'm I guess what you would call a supply and demand absolutist. There's no "correct" amount of development or "optimal" level of density (wrt prices, I mean; obviously people have preferences ). If you let demand outpace supply, then you should expect the available market-rate housing to increase in price. (And that's true even if you think your city is building a lot, or if you think it's already really dense, or if…

There are limits to how many people land can carry. Vancouver builds up onto a mountain, which is crazy. Yes, for some price, we could terrace the mountain or even remove it.

Vancouver is a boom bust town for real estate, now it is in a boom, it will bust eventually, just like it has many times before. There is just too much speculation going on to represent stable demand.

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