Real Estate Crash thread

[Benny Profane]

Bears repeating:

"To lose $1.42 billion by flipping houses in the hottest, most inflated, most liquid housing market ever takes a real genius."

[liv2ski]

You make me laugh Benny, but right???

[Benny Profane]

And, finally, we have concrete evidence why this market is so stupidly expensive and inflated further during a plague. (Remember, thanks to your tax dollars and the Fed bailing out our financial system in 08, house prices never have been higher) No, it wasn't "work from home", and it certainly wasn't higher wages suddenly, it was a large corporation (at least one we know of) doing stupid shit with other people's money trying to corner a market in a business it had no clue how to conduct itself in. Internet real estate listing and advertising is not real estate sales. The quants fuck up again. Hopefully they're the division Zillow is banishing from headquarters. Try to put that on your resume.

[4matic]

From the work I did it appeared Zillow bought most of their flips at the mid low end. I doubt it affected the high end too much.

If they are writing down losses and clearing inventory it might not have much affect on next years selling market.

[altasnob]

Benny, you really think the 10,000 or so homes Zillow bought and sold had that much effect on the national real estate market? They are not that big of a company, only 6,400 employees (before the 25% who are about to get canned). Like Facebook, Zillow and Redfin will continue to make money selling and using your data when you view homes and post them on the TGRz.

Zillow was founded by former Microsoft executives who founded Expedia.

[Dantheman]

Benny, you really think the 10,000 or so homes Zillow bought and sold had that much effect on the national real estate market? They are not that big of a company, only 6,400 employees (before the 25% who are about to get canned). Like Facebook, Zillow and Redfin will continue to make money selling and using your data when you view homes and post them on the TGRz.

Zillow was founded by former Microsoft executives who founded Expedia.

But how many PE firms and such were/are also out there buying up homes?

[Benny Profane]

But how many PE firms and such were/are also out there buying up homes?

Right. Zillow wasn't the only one. PE has been in on the home buying and renting market since 08. But they don't have to report to us quarterly, if at all. And haven't I heard more than once that Black rock is one of the nation's biggest landlords after their binge?

House of cards is getting higher. It was never allowed to fall to mean after the crash.

[Name Redacted]

Bears repeating:

"To lose $1.42 billion by flipping houses in the hottest, most inflated, most liquid housing market ever takes a real genius."

Exactly. I mean, you have all the data, and even a way to nudge the market in your favor by your zestimates, and you are in the hottest RE market in history where even regular folks are turning huge profits, and STILL manage to fuck it all up hudge. Pretty darn impressive, I was wondering if there was a way that it was some kind of shirt sale strategy but I guess not so far.

[Benny Profane]

https://www.denverpost.com/2021/11/0...ues-cool-down/

[altasnob]

Zillow (and Redfin) are getting painted as the bad guy here. But to me, the real estate industry, with their bloated commissions and endless middle men, needs some tech disruption. If not Zillow and Redfin, who?

I've posted these stats before: the U.S. has roughly 140 million housing units. Of those 140 million units, about 80 million are stand-alone single-family homes. Of those 80 million, about 15 million are rental properties. Of those 15 million single-family rentals, institutional investors own about 300,000; most of the rest are owned by individual landlords. Of that 300,000, BlackRock owns about 80,000.

I think there are way more evil entities out there than Zillow and the 10,000 homes they bought.

[dunfree]

Zillow wanted to be a market maker without making the market more efficient. Fuck ‘em.

[Benny Profane]

Hubris of the quants.

[Name Redacted]

I don’t think Zillow is evil. I use the app and website every day religiously/addictively. They should just stick with data and maybe create an online marketplace to perform transactions w/o an agent for less commission. They fucked up with just a shitty strategy getting over leveraged into a market it sounds like to me.

[Benny Profane]

Zillow (and Redfin) are getting painted as the bad guy here. But to me, the real estate industry, with their bloated commissions and endless middle men, needs some tech disruption. If not Zillow and Redfin, who?

I've posted these stats before: the U.S. has roughly 140 million housing units. Of those 140 million units, about 80 million are stand-alone single-family homes. Of those 80 million, about 15 million are rental properties. Of those 15 million single-family rentals, institutional investors own about 300,000; most of the rest are owned by individual landlords. Of that 300,000, BlackRock owns about 80,000.

I think there are way more evil entities out there than Zillow and the 10,000 homes they bought.

Why did you write off non "stand alone single family homes"? As you state, that's nearly half of all units. Many are not rentals. Many are condos and co-ops, especially in urban areas. They're in the market, too.

[altasnob]

I don't have the number of single family homes, or non-single family homes, owned by institutional investors for flipping (not rental) purposes. Just pointing out that BlackRock is in a way better position to manipulate the housing market to their advantage than Zillow. Zillow and Redfin are just like other disruptive tech startups who struggle to make profit.

The stats I posted come from this:

BlackRock Is Not Ruining the U.S. Housing Market. The real villain isn’t a faceless Wall Street Goliath; it’s your neighbors and local governments stopping the construction of new units.

https://www.theatlantic.com/ideas/ar...market/619224/

[ötzi]

The only thing I have against Zillow is how shitty of a job they did buying homes. I mean, they have the data. Look at it. Build an algorithm that actually works before you hire people and take investors' money. I don't have a penny in it and never have, but their ineptness pisses me off anyways.

edit: I lied, I also hate how shitty their website is. Zillow is just shitty at what they do.

[Benny Profane]

I don't have the number of single family homes, or non-single family homes, owned by institutional investors for flipping (not rental) purposes. Just pointing out that BlackRock is in a way better position to manipulate the housing market to their advantage than Zillow. Zillow and Redfin are just like other disruptive tech startups who struggle to make profit.

The stats I posted come from this:

BlackRock Is Not Ruining the U.S. Housing Market. The real villain isn’t a faceless Wall Street Goliath; it’s your neighbors and local governments stopping the construction of new units.

https://www.theatlantic.com/ideas/ar...market/619224/

Oh great. At the same time that world leaders are meeting to attempt some sort of movement against climate change, a writer tells us that the world's second biggest polluter needs even more homes (I assume stand alone single family homes), which are pretty much easily the single biggest cause of our carbon output, now that we've sent all of our industry offshore. Nowhere in the world is there anywhere near this kind of housing market, which of course needs hundreds of millions of cars and trucks and far flung corporate parks and shopping malls to survive. And he thinks the solution is more, more. Right.

Here's my take. Most of this housing is owned by Boomers. They built the market and are dying off in it. Patience, or, if we start building willy nilly, we'll have millions of homes on the market in a decade or two that may actually be an over supply, with all the municipal funding problems that will bring. Suburban ghettos. But, if we are going to build, multi unit projects built near shopping. Enough already.

[altasnob]

I think the writer is advocating for more multi-family near transit, not single family housing. Take a desirable market like Seattle. Currently, there are 4 million people in the Seattle metro area. By 2050, that population is forecasted to increase to 5.8 million. Where are all those extra 1.8 million people going to live if we do not build more housing?

[ötzi]

@Benny: I was totally on board with that thesis until the pandemic. Now I dunno. The move towards revival of urban cores and the ghetto-ization (ghettifaction? I can't think of a word) of at least the outer 'burbs was strong but all of sudden. no. Which way it goes from here is anyone's guess.

[Toadman]

I think the writer is advocating for more multi-family near transit, not single family housing. Take a desirable market like Seattle. Currently, there are 4 million people in the Seattle metro area. By 2050, that population is forecasted to increase to 5.8 million. Where are all those extra 1.8 million people going to live if we do not build more housing?

Who says you have to build housing for these people? Don't build it and they won't come. Or alternatively the uber liberals can just relax zoning codes and build up. It's not like Bellevue has enough skyscrapers yet. Developers wet dream building a few dozen 100 story condos on the shores of Lake WA. $$$$$

[altasnob]

Who says you have to build housing for these people? Don't build it and they won't come.

San Francisco already tried that experiment. It didn't work. Moreover, it just made the lucky home owners in the Bay Area rich so they can go inflate housing prices in all other Western markets.

[Bobcat Sig]

Zillow (and Redfin) are getting painted as the bad guy here. But to me, the real estate industry, with their bloated commissions and endless middle men, needs some tech disruption. If not Zillow and Redfin, who?

It's not often I agree here, but this bears repeating... even if it will anger fellow mags in the real estate industry. The amount of people and entities that take a cut from real estate transactions is criminal. Everyone gets a taste, apparently.

[old_newguy]

The only thing I have against Zillow is how shitty of a job they did buying homes. I mean, they have the data. Look at it. Build an algorithm that actually works before you hire people and take investors' money. I don't have a penny in it and never have, but their ineptness pisses me off anyways.

edit: I lied, I also hate how shitty their website is. Zillow is just shitty at what they do.

Sort of mind blowing they weren’t validating their model with independent appraisals.

(LOL, who am I kidding, even if they were those guys just justify the sales price, they don’t actually come up with a real value.)

[dunfree]

It's not often I agree here, but this bears repeating... even if it will anger fellow mags in the real estate industry. The amount of people and entities that take a cut from real estate transactions is criminal. Everyone gets a taste, apparently.

real estate, construction and health care are the job suckers. Why do you hate the usa?

[4matic]

But how many PE firms and such were/are also out there buying up homes?

Blackstone et al were not buying to quick flip.