roundhouse
Red Skull Member
- Joined
- Aug 7, 2020
- Member Number
- 2622
- Messages
- 31
I thought every business got tons of free PPP loans to pay rent and employees ???
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Real estate crisis coming?
- Thread starter montrose818
- Start date
rockota
white collar hillbilly
- Joined
- May 28, 2020
- Member Number
- 1642
- Messages
- 3,672
Atlas will shrug and the government will get the excuse they desire to nationalize everything... "because you can't trust rich people to keep their businesses afloat"
arse_sidewards
Contrary to everything
- Joined
- May 19, 2020
- Member Number
- 71
- Messages
- 8,107
The more obvious it becomes that you need to have "pulling a fraction of your money out of the market and using it to buy 2nd and 3rd properties as investment" kind of net worth to weather this shit the more in favor I am of letting the left run things into the ground ASAP. The faster we can get to the "shoot your way out of communism" step the better. Any wealth I amass in the meantime will likely become worthless so getting it over with ASAP seems like the best strategy.
gunracer1
Collector of fine junk
I'm thinking inflation is hitting so hard that the market will never correct.
Clemson13
Evernoob is a douchcanoe
Its nuts. I am 30 and could pay off my house now. Yay for positive net worth finally
However that wouldn't do my investments many favors, and if anything I want to figure out how to pull MORE debt. Currently house is at 2.7% on the second yr of a 30 yr mortgage.The inflation in housing prices and everything else is nuts. When i got out of school in 2014 I could grocery shop for myself for 70$ a week. Now I seem to be averaging 100 a week minimum. I dont think my eating habits changed at all.
Housing is stupid. I wished I had bought when i got my first job, kept that house and bout again when i did in 2019. My house went for 340k in 2019, and i paid over asking, but it was almost everything I wanted and at the exact same cost/ month as the house I had been renting including insurange, tax, and maintenance and is WAY nicer. Today, not even 2 years later zillow says its 420k. I wished i bought a house 2x as expensive now. It used to be i figured i could upgrade to a 800k house after 10 yrs or so and get the last few things i wanted like 42-48" range in kitchen etc and bigger master bathroom. Now? 800K might buy me that house today without another decade of inflation. I feel like i may never have the MILLIONS required to buy the middle class house on some land I want. Feels like the younger generations are just getting FUCKED by everything. (Not helped by all the young commies fucking up politics even worse)
I would love rentals, but travel for work so the maintenance aspect kills me.Ive got my REITs but they are a little harder to pull debt to buy compared to a house. I keep thinking about getting a 50k loan just to buy REITs with....then I think thats a fucking dumb idea.
Wilson
Newb
- Joined
- Nov 21, 2020
- Member Number
- 3068
- Messages
- 680
It reduces buying power. As much as some here like to think that everyone is paying cash for homes with stimulus or ppp money; most are still financing. It’s not any kind of a historical or significant number, but is almost a 2% hike over most of the last two years. The real number may be higher, but I think interest rates will be what ultimately levels off the real estate rise.
Clemson13
Evernoob is a douchcanoe
This is a big reason I struggle in dating. I would love a family, but a significant portion of candidates reject themselves by now having adequate plans for a successful business partnership in the relationship.
The last relationship just cratered. At 7 Mo it hot the point where I got the truth: she wanted to separate me from my family, have only her families manipulative influence, stay at home not working but doing her hobby of sewing dog clothes & cooking, be taken to events and out to dinner so she could look fancy, her 1940s POS was the only house ( ignore my larger 2010, nicer, 2x land, 2k shop house ), I shouldn't focus on having a substantial retirement at 55, I should have proposed at month 4, ohhhh yeah I was soooo cheap....
Edit: yes I'm bitter. Great 6 months followed by so much wtf
Last edited:
Clemson13
Evernoob is a douchcanoe
Fixed that for you
Clemson13
Evernoob is a douchcanoe
No kidding, why I would NEVER propose in less than a year. I got out my dating tracking/performance spreadsheet and put the relationship in as soon as it was over. After no flags for months she got 5- 6 flags from "the predatory female" in the final 3 weeks.Be happy it didn't cost you 1/2 your stuff to figure that out.
grapehead
Junior Woodchuck
Care to share this spreadsheet?
He meant newds, not *spreadsheet.
gunracer1
Collector of fine junk
damn, I met my wife and proposed in 4 moths or so. was married at 9 months. that was 33 years ago
aczlan
Good Morning!
I proposed at ~6 months and we were married at ~10 months, still going strong more than a dozen years later...
Aaron Z
DMG
Red Skull Member
- Joined
- May 20, 2020
- Member Number
- 495
- Messages
- 2,289
Somerset County near Mt Davis.
montrose818
Banned
i knew something is off
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Bloomberg
Zillow Seeks to Sell 7,000 Homes for $2.8 Billion After Flipping Halt
Patrick Clark, Sridhar Natarajan and Heather Perlberg
November 1, 2021, 2:29 pm
(Bloomberg) -- Zillow Group Inc. is looking to sell about 7,000 homes as it seeks to recover from a fumble in its high-tech home-flipping business.
Most Read from Bloomberg
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The company is seeking roughly $2.8 billion for the houses, which are being pitched to institutional investors, according to people familiar with the matter. Zillow will likely sell the properties to a multitude of buyers rather than packaging them in a single transaction, said the people, who asked not to be named because the matter is private.
A representative for Zillow didn’t immediately comment.
The move to offload homes comes as Zillow seeks to recover from an operational stumble that saw it buy too many houses, with many now being listed for less than it paid. The company typically offers smaller numbers of homes to single-family landlords, but the current sales effort is much larger than normal.
If successful, the sale would make a dramatic dent in Zillow’s inventory. The company acquired roughly 8,000 homes in the third quarter, according to an estimate by real estate tech strategist Mike DelPrete.
Zillow shares dropped 8.6% to $96.61 on Monday. The stock had slipped 22% this year through Friday after nearly tripling in 2020. The company is scheduled to report earnings on Tuesday.
Read more: Zillow’s Zeal to Outbid for Homes Backfires in Flipping Fumble
Zillow recently said it would stop making new offers in its home-flipping operation for the remainder of the year, though it continues to close on properties that were already under contract. The decision came after the company tweaked the algorithms that power the business to make higher offers, leaving it with a bevy of winning bids just as home-price appreciation cooled off a bit.
An analysis of 650 homes owned by Zillow showed that two-thirds were priced for less than the company bought them for, according to an Oct. 31 note from KeyBanc Capital Markets.
“I think they leaned into home-price appreciation at exactly the wrong moment,” said Ed Yruma, an analyst at KeyBanc.
Zillow put a record number of homes on the market in September, listing properties at the lowest markups since November 2018, according to research from YipitData. It also cut prices on nearly half of its U.S. listings in the third quarter, according to Yipit, signaling that its inventory was commanding prices lower than it expected.
Read more: Cerberus Leads Wall Street Landlords Finding Hidden Homes to Buy
Led by Chief Executive Officer Rich Barton, Zillow is best known for publishing real estate listings online and calculating estimated home values – called Zestimates – that let users keep track of how much their property is worth. The popularity of the company’s apps and websites fuels profits in Zillow’s online marketing business.
But more recently it has been buying and selling thousands of U.S. homes, practicing a new spin on home-flipping called iBuying that seeks to offer sellers a better way of selling a home.
Zillow invites owners to request an offer on their house and uses algorithms to generate a price. If an owner accepts, Zillow buys the property, makes light repairs and puts it back on the market.
The company bought more than 3,800 houses in the second quarter, making progress toward its stated goal of acquiring 5,000 homes a month by 2024. The increase in purchases left the company struggling to find workers to renovate the properties.
Read more: Wall Street’s Favorite Suburban Housing Bet Is Getting Crowded
Zillow and its chief iBuying competitors, Opendoor Technologies Inc. and Offerpad Solutions Inc., often sell homes to single-family landlords in the normal course of business. Investors bought roughly 9% of all homes Zillow sold in the first quarter of 2021, Bloomberg previously reported.
Investors have been buying single-family rental homes during the pandemic, chasing the inventory-starved housing market for properties they can buy and rent. That should help Zillow find buyers, said Rick Palacios, director of research at John Burns Real Estate Consulting.
“I bet Zillow can sell to single-family landlords at a profit given how hungry those groups are for inventory,” he said.
(Updates with quotes and context throughout.)
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©2021 Bloomberg L.P.
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Yahoo Finance
Ad
Bloomberg
Zillow Seeks to Sell 7,000 Homes for $2.8 Billion After Flipping Halt
Patrick Clark, Sridhar Natarajan and Heather Perlberg
November 1, 2021, 2:29 pm
(Bloomberg) -- Zillow Group Inc. is looking to sell about 7,000 homes as it seeks to recover from a fumble in its high-tech home-flipping business.
Most Read from Bloomberg
Into the Metaverse: Where Crypto, Gaming and Capitalism Collide
Can a New Mayor Fix Seattle’s Downtown?
Atlanta’s Crowded Election Pits Former Mayor Versus ‘Anyone But’
In Minneapolis Election, the Future of Policing Is at Stake
The Terrifying Rise of Haunted Tourism
The company is seeking roughly $2.8 billion for the houses, which are being pitched to institutional investors, according to people familiar with the matter. Zillow will likely sell the properties to a multitude of buyers rather than packaging them in a single transaction, said the people, who asked not to be named because the matter is private.
A representative for Zillow didn’t immediately comment.
The move to offload homes comes as Zillow seeks to recover from an operational stumble that saw it buy too many houses, with many now being listed for less than it paid. The company typically offers smaller numbers of homes to single-family landlords, but the current sales effort is much larger than normal.
If successful, the sale would make a dramatic dent in Zillow’s inventory. The company acquired roughly 8,000 homes in the third quarter, according to an estimate by real estate tech strategist Mike DelPrete.
Zillow shares dropped 8.6% to $96.61 on Monday. The stock had slipped 22% this year through Friday after nearly tripling in 2020. The company is scheduled to report earnings on Tuesday.
Read more: Zillow’s Zeal to Outbid for Homes Backfires in Flipping Fumble
Zillow recently said it would stop making new offers in its home-flipping operation for the remainder of the year, though it continues to close on properties that were already under contract. The decision came after the company tweaked the algorithms that power the business to make higher offers, leaving it with a bevy of winning bids just as home-price appreciation cooled off a bit.
An analysis of 650 homes owned by Zillow showed that two-thirds were priced for less than the company bought them for, according to an Oct. 31 note from KeyBanc Capital Markets.
“I think they leaned into home-price appreciation at exactly the wrong moment,” said Ed Yruma, an analyst at KeyBanc.
Zillow put a record number of homes on the market in September, listing properties at the lowest markups since November 2018, according to research from YipitData. It also cut prices on nearly half of its U.S. listings in the third quarter, according to Yipit, signaling that its inventory was commanding prices lower than it expected.
Read more: Cerberus Leads Wall Street Landlords Finding Hidden Homes to Buy
Led by Chief Executive Officer Rich Barton, Zillow is best known for publishing real estate listings online and calculating estimated home values – called Zestimates – that let users keep track of how much their property is worth. The popularity of the company’s apps and websites fuels profits in Zillow’s online marketing business.
But more recently it has been buying and selling thousands of U.S. homes, practicing a new spin on home-flipping called iBuying that seeks to offer sellers a better way of selling a home.
Zillow invites owners to request an offer on their house and uses algorithms to generate a price. If an owner accepts, Zillow buys the property, makes light repairs and puts it back on the market.
The company bought more than 3,800 houses in the second quarter, making progress toward its stated goal of acquiring 5,000 homes a month by 2024. The increase in purchases left the company struggling to find workers to renovate the properties.
Read more: Wall Street’s Favorite Suburban Housing Bet Is Getting Crowded
Zillow and its chief iBuying competitors, Opendoor Technologies Inc. and Offerpad Solutions Inc., often sell homes to single-family landlords in the normal course of business. Investors bought roughly 9% of all homes Zillow sold in the first quarter of 2021, Bloomberg previously reported.
Investors have been buying single-family rental homes during the pandemic, chasing the inventory-starved housing market for properties they can buy and rent. That should help Zillow find buyers, said Rick Palacios, director of research at John Burns Real Estate Consulting.
“I bet Zillow can sell to single-family landlords at a profit given how hungry those groups are for inventory,” he said.
(Updates with quotes and context throughout.)
Most Read from Bloomberg Businessweek
The Slip-and-Fall King Wants to Save You From Your Next Wipeout
Big Teacher Is Watching: How AI Spyware Took Over Schools
Australia Braces for Life After Covid Zero
Workers Press for Power in Rare Advance for U.S. Labor Movement
You Could Be Competing With Bots to Buy Gifts This Christmas
©2021 Bloomberg L.P.
View more on Yahoo Finance
Update privacy choices
Reactions
montrose818
Banned
Zillow ‘may have leaned into home acquisition at the wrong time,’ one analyst said.
Zillow’s unexpected announcement in October that it was temporarily pausing its home-buying activities raised many analysts’ eyebrows. Now, the company is reportedly offloading thousands of homes at a discount.
Some argue that more concerning trends could be on the way.
The company’s Zillow Offers division is what’s known as an “iBuyer” — it purchases and sells homes directly to consumers, typically renovating them in between.
Following a report in mid-October from Bloomberg, Zillow Z ZG confirmed that its Zillow Offers division would not be signing any additional new contracts to purchase homes through the end of 2021.
In explaining the move, Zillow said the company was facing a backlog of renovations and dealing with operational-capacity issues.
Now, though, Bloomberg is reporting that the company is selling off roughly 7,000 homes, looking to claw back $2.8 billion in the process. A separate report from KeyBanc analyst Edward Yruma found that two-thirds of the homes Zillow has listed for sale feature an asking price below what Zillow paid for the property, with the average discount being 4.5%.
“Zillow may have leaned into home acquisition at the wrong time,” Yruma wrote in a research note.
Zillow’s competitors continue to expand their operations
“We’re operating within a labor- and supply-constrained economy — inside a competitive real estate market, especially in the construction, renovation and closing spaces,” Jeremy Wacksman, Zillow’s chief operating officer, said when the company announced its home-buying pause.
He added that the pause would enable the company “to focus on sellers already under contract” and the company’s existing inventory of homes.
Other iBuyers did not follow suit. In fact, it’s just the opposite — most of Zillow’s competitors re-emphasized their expansion plans in response to the announcement of Zillow’s pause.
Most of Zillow’s competitors re-emphasized their expansion plans in response to the announcement.
In mid-October, Redfin
RDFN noted that its iBuying division, called RedfinNow, “continues to make offers” in all 29 markets it operates in, and the company plans to move ahead with its expansion plans.
Last month, Offerpad OPAD announced that it is launching in three markets in California in the first quarter of 2022: Riverside, San Bernardino and Sacramento.
“We look forward to taking our services and expertise to homeowners in California that want an easy, seamless real-estate experience,” Offerpad CEO and chairman Brian Bair said.
A spokesperson for Opendoor OPEN said that the company “is open for business and continues to scale and grow.” Meanwhile, Opendoor co-founder Keith Rabois said on Twitter
TWTR that Zillow’s claims regarding supply-chain bottlenecks were “just an excuse.”
Labor and material shortages
Some analysts and industry experts, however, noted that the pressures Zillow says it’s facing are very much real.
In a recent report, the National Association of Home Builders noted that construction companies are still facing major headwinds in completing construction of new homes, namely shortages of building materials and labor. Those same issues extend to renovation projects, as well.
“Labor shortages in the economy are real and likely resulting in bottlenecks along the chain,” analysts at Truist wrote in a research note. “In such a setup, the current pause lowers inventory risk to Zillow, in our view.”
Zillow’s place in the iBuying landscape is different from some of its competitors. Like Redfin, Zillow has other business lines it can depend on for revenue.
‘It may make sense for them to periodically de-emphasize the riskiest or most capital-intensive parts of their business.’
— Michael Greene, co-founder and CEO of ResiShares
“Because Zillow’s business model is much more focused on aggregating eyeballs across the spectrum of real-estate transactions, it may make sense for them to periodically de-emphasize the riskiest or most capital-intensive parts of their business, as opposed to those of their peers for whom that’s all they do,” said Michael Greene, co-founder and CEO of ResiShares, a residential real-estate investment company.
Other analysts were more circumspect about Zillow’s pause, especially in light of its recent success with iBuying.
Wedbush analyst Ygal Arounian downgraded Zillow shares to “neutral” from “outperform” in light of the pause on the company’s home-buying pursuits. Among his concerns are that rivals like Opendoor will continue to increase market share while Zillow takes a breather, making it harder for Zillow to bounce back.
“2022 was supposed to be the year where Zillow’s move to capture the transaction was going to take greater shape, with greater investments, and the bundled offering driving growth from iBuyer traffic to ‘partner leads’ and mortgage growth,” Arounian wrote in a note. “We think it’s hard to argue that that vision doesn’t take a step back.”
Concerns about home prices
Capacity constraints alone don’t explain everything, Stephens analyst John Campbell said. “We do think that there is likely more to the story so we’re surprised to see the positive reactions out of some of the other iBuyers,” he said in an email to MarketWatch after Zillow announced its pause.
One explanation is home prices. The past year has seen an explosion in home-price growth as home buyers seeking more space scrambled to compete for the little inventory in the market.
Investors, including iBuyers like Zillow, were caught in the melee.
The share of cash buyers — which includes iBuyers — has reached the highest level since 2013. And while some cash buyers can score a deal at or below a home’s asking price by nature of offering a simpler closing process, the fierce competition today means that many are paying a premium for the homes they’re getting.
An August report from independent real-estate analyst Mike DelPrete found that Zillow, Offerpad and Opendoor were all paying well above the value of homes to purchase them in 2021, whereas back in 2019 they typically purchased properties at a discount.
Today, iBuyers are spending more than homes are worth to purchase them, whereas in 2019 the median price they paid represented a discount.
For iBuyers, margins are very tight, especially once the cost of renovations is factored in. And the longer a company holds onto a home, the higher the risk.
“The activity we saw this summer was so unprecedented relative to the way real-estate typically moves, I can see why an iBuyer might want to take time to digest the signals coming out of the market now that it seems to have slightly more stable footing,” Greene said.
Data from real-estate company Attom Data Solutions found that the typical home-flip only attracted a 33.5% profit, which is the lowest since the first quarter of 2021.
“While flipping has not turned into a losing venture on deals that usually take around six months to turn around, the trends are showing signs of potentially heading in the other direction, which is likely affecting decisions by home-flipping businesses around the country,” said Todd Teta, chief product officer at Attom.
Zillow’s other business lines give it an even deeper perspective into the belly of the beast. It has a pulse on buyer demand and the direction of home prices.
Zillow’s other business lines give it an even deeper perspective into the belly of the beast — between their real-estate portal that buyers use to start their search and their Zillow Premier Agents division, Zillow has a pulse on buyer demand and the direction of home prices.
Some analysts reasoned that the company might not like what it’s seeing.
“Is it possible that Zillow is seeing something in their data…that maybe on the margin makes them a little bit nervous about holding inventory right now?” said Tom White, an internet research analyst with D.A. Davidson.
If Zillow indeed does expect home prices to cool — perhaps in response to rising mortgage rates — it could be taking a step back to let the market reach its equilibrium and avoid notching too many losses, particularly given the lengthy turnaround times on renovation projects today.
Could regulatory scrutiny be the cause?
Zillow’s home-buying operations aren’t popular with everyone. Last month, a series of videos on TikTok from a Nevada real-estate agent went viral, claiming that Zillow and its competitors were manipulating the housing market.
Those claims were quickly disputed by real-estate experts, since no iBuyer has enough market share to truly move the needle where home prices are concerned. But that doesn’t mean the companies are escaping scrutiny.
Zillow still faces an antitrust lawsuit from tech-based real-estate broker Real Estate Exchange (Rex) , and the Federal Trade Commission has reportedly reopened its review of Zillow’s acquisition of real-estate listings service ShowingTime.
“Zillow’s ShowingTime acquisition invited regulators under the hood and there’s been industry pushback tied to perceptions that iBuyers are inflating market prices for their own benefit, so could there be an external force triggering a pause?” Campbell said.
“Unfortunately for Zillow and iBuyer investors, in general, the answer to these questions might not rise to the surface until later this year and possibly into next year,” he added.
Zillow shares are down roughly 25% year-to-date, having taken a nose dive since the company confirmed the issues its home-buying division faced. Comparatively, the S&P 500 SPX is up 23% during the same timeframe, while the Nasdaq Composite is up 21% COMP .
Zillow’s unexpected announcement in October that it was temporarily pausing its home-buying activities raised many analysts’ eyebrows. Now, the company is reportedly offloading thousands of homes at a discount.
Some argue that more concerning trends could be on the way.
The company’s Zillow Offers division is what’s known as an “iBuyer” — it purchases and sells homes directly to consumers, typically renovating them in between.
Following a report in mid-October from Bloomberg, Zillow Z ZG confirmed that its Zillow Offers division would not be signing any additional new contracts to purchase homes through the end of 2021.
In explaining the move, Zillow said the company was facing a backlog of renovations and dealing with operational-capacity issues.
Now, though, Bloomberg is reporting that the company is selling off roughly 7,000 homes, looking to claw back $2.8 billion in the process. A separate report from KeyBanc analyst Edward Yruma found that two-thirds of the homes Zillow has listed for sale feature an asking price below what Zillow paid for the property, with the average discount being 4.5%.
“Zillow may have leaned into home acquisition at the wrong time,” Yruma wrote in a research note.
Zillow’s competitors continue to expand their operations
“We’re operating within a labor- and supply-constrained economy — inside a competitive real estate market, especially in the construction, renovation and closing spaces,” Jeremy Wacksman, Zillow’s chief operating officer, said when the company announced its home-buying pause.
He added that the pause would enable the company “to focus on sellers already under contract” and the company’s existing inventory of homes.
Other iBuyers did not follow suit. In fact, it’s just the opposite — most of Zillow’s competitors re-emphasized their expansion plans in response to the announcement of Zillow’s pause.
Most of Zillow’s competitors re-emphasized their expansion plans in response to the announcement.
In mid-October, Redfin
RDFN noted that its iBuying division, called RedfinNow, “continues to make offers” in all 29 markets it operates in, and the company plans to move ahead with its expansion plans.
Last month, Offerpad OPAD announced that it is launching in three markets in California in the first quarter of 2022: Riverside, San Bernardino and Sacramento.
“We look forward to taking our services and expertise to homeowners in California that want an easy, seamless real-estate experience,” Offerpad CEO and chairman Brian Bair said.
A spokesperson for Opendoor OPEN said that the company “is open for business and continues to scale and grow.” Meanwhile, Opendoor co-founder Keith Rabois said on Twitter
TWTR that Zillow’s claims regarding supply-chain bottlenecks were “just an excuse.”
Labor and material shortages
Some analysts and industry experts, however, noted that the pressures Zillow says it’s facing are very much real.
In a recent report, the National Association of Home Builders noted that construction companies are still facing major headwinds in completing construction of new homes, namely shortages of building materials and labor. Those same issues extend to renovation projects, as well.
“Labor shortages in the economy are real and likely resulting in bottlenecks along the chain,” analysts at Truist wrote in a research note. “In such a setup, the current pause lowers inventory risk to Zillow, in our view.”
Zillow’s place in the iBuying landscape is different from some of its competitors. Like Redfin, Zillow has other business lines it can depend on for revenue.
‘It may make sense for them to periodically de-emphasize the riskiest or most capital-intensive parts of their business.’
— Michael Greene, co-founder and CEO of ResiShares
“Because Zillow’s business model is much more focused on aggregating eyeballs across the spectrum of real-estate transactions, it may make sense for them to periodically de-emphasize the riskiest or most capital-intensive parts of their business, as opposed to those of their peers for whom that’s all they do,” said Michael Greene, co-founder and CEO of ResiShares, a residential real-estate investment company.
Other analysts were more circumspect about Zillow’s pause, especially in light of its recent success with iBuying.
Wedbush analyst Ygal Arounian downgraded Zillow shares to “neutral” from “outperform” in light of the pause on the company’s home-buying pursuits. Among his concerns are that rivals like Opendoor will continue to increase market share while Zillow takes a breather, making it harder for Zillow to bounce back.
“2022 was supposed to be the year where Zillow’s move to capture the transaction was going to take greater shape, with greater investments, and the bundled offering driving growth from iBuyer traffic to ‘partner leads’ and mortgage growth,” Arounian wrote in a note. “We think it’s hard to argue that that vision doesn’t take a step back.”
Concerns about home prices
Capacity constraints alone don’t explain everything, Stephens analyst John Campbell said. “We do think that there is likely more to the story so we’re surprised to see the positive reactions out of some of the other iBuyers,” he said in an email to MarketWatch after Zillow announced its pause.
One explanation is home prices. The past year has seen an explosion in home-price growth as home buyers seeking more space scrambled to compete for the little inventory in the market.
Investors, including iBuyers like Zillow, were caught in the melee.
The share of cash buyers — which includes iBuyers — has reached the highest level since 2013. And while some cash buyers can score a deal at or below a home’s asking price by nature of offering a simpler closing process, the fierce competition today means that many are paying a premium for the homes they’re getting.
An August report from independent real-estate analyst Mike DelPrete found that Zillow, Offerpad and Opendoor were all paying well above the value of homes to purchase them in 2021, whereas back in 2019 they typically purchased properties at a discount.
Today, iBuyers are spending more than homes are worth to purchase them, whereas in 2019 the median price they paid represented a discount.
For iBuyers, margins are very tight, especially once the cost of renovations is factored in. And the longer a company holds onto a home, the higher the risk.
“The activity we saw this summer was so unprecedented relative to the way real-estate typically moves, I can see why an iBuyer might want to take time to digest the signals coming out of the market now that it seems to have slightly more stable footing,” Greene said.
Data from real-estate company Attom Data Solutions found that the typical home-flip only attracted a 33.5% profit, which is the lowest since the first quarter of 2021.
“While flipping has not turned into a losing venture on deals that usually take around six months to turn around, the trends are showing signs of potentially heading in the other direction, which is likely affecting decisions by home-flipping businesses around the country,” said Todd Teta, chief product officer at Attom.
Zillow’s other business lines give it an even deeper perspective into the belly of the beast. It has a pulse on buyer demand and the direction of home prices.
Zillow’s other business lines give it an even deeper perspective into the belly of the beast — between their real-estate portal that buyers use to start their search and their Zillow Premier Agents division, Zillow has a pulse on buyer demand and the direction of home prices.
Some analysts reasoned that the company might not like what it’s seeing.
“Is it possible that Zillow is seeing something in their data…that maybe on the margin makes them a little bit nervous about holding inventory right now?” said Tom White, an internet research analyst with D.A. Davidson.
If Zillow indeed does expect home prices to cool — perhaps in response to rising mortgage rates — it could be taking a step back to let the market reach its equilibrium and avoid notching too many losses, particularly given the lengthy turnaround times on renovation projects today.
Could regulatory scrutiny be the cause?
Zillow’s home-buying operations aren’t popular with everyone. Last month, a series of videos on TikTok from a Nevada real-estate agent went viral, claiming that Zillow and its competitors were manipulating the housing market.
Those claims were quickly disputed by real-estate experts, since no iBuyer has enough market share to truly move the needle where home prices are concerned. But that doesn’t mean the companies are escaping scrutiny.
Zillow still faces an antitrust lawsuit from tech-based real-estate broker Real Estate Exchange (Rex) , and the Federal Trade Commission has reportedly reopened its review of Zillow’s acquisition of real-estate listings service ShowingTime.
“Zillow’s ShowingTime acquisition invited regulators under the hood and there’s been industry pushback tied to perceptions that iBuyers are inflating market prices for their own benefit, so could there be an external force triggering a pause?” Campbell said.
“Unfortunately for Zillow and iBuyer investors, in general, the answer to these questions might not rise to the surface until later this year and possibly into next year,” he added.
Zillow shares are down roughly 25% year-to-date, having taken a nose dive since the company confirmed the issues its home-buying division faced. Comparatively, the S&P 500 SPX is up 23% during the same timeframe, while the Nasdaq Composite is up 21% COMP .
DMG
Red Skull Member
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- May 20, 2020
- Member Number
- 495
- Messages
- 2,289
Its a 53‘ mobile home on 2.5 acres. has well, septic, electric. I need to fix the floors, they are wavy in a couple of spots due to pipes freezing underneath but useable as is. It is right by a little lake and the back property line is Forbes state forest. $80k
How far SxSE of PGH? PM if you want.
Stuck
In Hell
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- May 20, 2020
- Member Number
- 424
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- 1,810
Brad
Jackass
My grandparents were dating for 2 weeks before my grandfather proposed. They were married more than 50 years.
Clemson13
Evernoob is a douchcanoe
This kind of blows my mind. I'm glad it worked for all of you but those numbers are so short These days I feel like girls hide there Cray and are independent enough you have to find it out before they divorce you to get half your shit. I feel like my friends who kept dating their women from college another 5 yrs then marked might have been on point. Last 3, one went crazy at month 2, one went crazy at month 4, one went crazy at month 7.
At what point is it me not them?
I feel like a financial partner and friend should not be this hard to find. Good news I get a smudge pot and 48" finger break as presents to myself for ending this one.
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arse_sidewards
Contrary to everything
- Joined
- May 19, 2020
- Member Number
- 71
- Messages
- 8,107
Things were different then. Divorce wasn't a have your cake and eat it too situation for women like it is now.
ThePanzerFuhrer
The Rock Breaker God
They are out there but they are hard to find.
I got really lucky with my wife. We dated for 10years before we pulled the pin. She grew up dirt poor mostly from bad decisions made by her parents. She vowed never to live like that again.
She buys nothing, saves as much as she can, put over 10% of her wages into her 401k starting at the age of 18. There is zero fighting about money in our household. She is in charge of our retirement planning.
I am super lucky to have found a partner like her to spend my life with.
arse_sidewards
Contrary to everything
- Joined
- May 19, 2020
- Member Number
- 71
- Messages
- 8,107
Mine's fine with money but she inherited her parents work ethic
The apple can only fall so far from the tree. Don't date women raised by deadbeats.
DMG
Red Skull Member
- Joined
- May 20, 2020
- Member Number
- 495
- Messages
- 2,289
Yes, it has a real kitchen, real bathroom, an electric water heater, etc. We have spent a week there many times with my wife and baby/toddler. Lots of hunting and fishing in the area. Some awesome atv trails that are not legal, I don’t ride there anymore and don’t think it is a great idea but a lot of people do. They leave some dirt roads unmaintained for snowmobiling.
ThePanzerFuhrer
The Rock Breaker God
Mine's fine with money but she inherited her parents work ethic
The apple can only fall so far from the tree. Don't date women raised by deadbeats.
I couldn’t deal with that. Being Lazy is my number one pet peeve. Whining how you life sucks but not actively trying to fix it sets me off.
My wife’s parents worked like hell. Her dad was always trying the next get rich quick scheme that never worked out for him. Cash cropping, giseng farming, the current iteration is having a small fleet of otr trucks. All being funded by her mom working at a paper mill making damn near 100k a year.
thedirtman
Well-known member
I can only hope, these prices are dumb and people are dumb for paying them. We need about 20,000 people to leave our area, it was so much better living here in 2014. Lets get those rates up and require 20% down on home purchases. It would also be nice to see some sort of rental reform because so many homes in this area are rentals. These boom and bust cycles are good for no-one.