Zillow bought a house in a neighborhood where I’m active

[Escoguy]

So maybe many of you have seen this already so it may not mean as much but for the first time, I’m seeing a house listed which is “owned by Zillow”.

My thoughts:

They have a lot of data, cheap capital, and this won’t be a one time thing.
One could argue, this puts a kind of floor under the market in the intermediate term as a player like this with deep pockets could arguably buy a meaningful portion of inventory in a market like SD and almost work like a cartel leader.

Part of me thinks anyone who has been holding out of buying will resent this trend.

Personally, I would rather see long term investors/actual owners buy the property.

It may also provide liquidity in some cases but I don’t think they would offer top dollar etc.

Here is the home as an FYI:
https://www.zillow.com/homedetails/3167-Willow-Creek-Pl-Escondido-CA-92027/16707258_zpid/

As of 21 hours on the market, it has 29 saves and 681 views.
Typically for every save, the house will sell for $1K over list.
I’m guessing this will end up at 910-930K.

[Escoguy]

I do want the HOA to contact them though as they let the lawn go to hell.

[gzz]

The photos made me dizzy. Why is the front door tiny and open to a long thin corridor?

[XBoxBoy]

I notice that this home is now pending. I wonder how much zillow will make off this transaction?

[gzz]

For Z and other tech stocks, its not about the money, but the friends you make along the way.

[Escoguy]

[quote=XBoxBoy]I notice that this home is now pending. I wonder how much zillow will make off this transaction?[/quote]

My guess is about 50K for owing it one month.

Pending after 4 days.

Just one more indication, there is a structural gap (lack of supply).

I expect they will do this as often as they can.

Margin may drop over time but expect they will target 20-30K min per transaction.

[sdrealtor]

Brother of a friend sold his place to Zillow a couple years ago. They ended up holding it for a while and ultimately lost money. They have virtually no cost of capital. I believe they are more concerned with figuring out this as a business model than making money for now. Billion dollar companies lose money on things all the time. This is one of those for them in many cases. They need to be among the companies trying this as a hedge to protect their primary business

[ucodegen]

[quote=gzz]The photos made me dizzy. Why is the front door tiny and open to a long thin corridor?[/quote]
Those are normal corridors (fire/building code mandates it). I have noticed that realtors are really pushing the rectilinear wide angle lens boundaries to the ‘max’. This distorts the center field making it look deeper but the side effect is objects in front might also look narrower/smaller.

In other words, the use of the wide angle made the hallway look longer than it really is, but also makes it look narrower. Those floorboard are probably around 8″ wide, I count 7 (almost 8) across at the narrowest. That makes the opening at the narrow portion 56″ to 64″. If the boards are 6″, the opening is 42″ to 48″(which would be a little narrow – but not as narrows as one’s impression looking at the photo). The door is 6.5 boards wide; at 8″ makes doorway 52″, 6″ wide boards make it 39″(min entry door size by code is 36″). The cropping also doesn’t help.. opening up the photo to full size looks better.

From the outside, the photo of the front door is odd – it is offset from the arch in front of it. (feng shui? to prevent evil energy from entering?? dunno)

That semi room at the side (dining room?) with the chandelier is a little odd. You can see how from one view, it looks really long and narrow, but the photo that is about 30 degrees oblique, it does not look so deep.

On the outside(back yard) on edge photos, you can see how the building looks like it might be 50 to 70 feet on the edge.. but may actually be about 30 (see straight on photo).

The down the edge photo of the kitchen (2nd photo) really shows it.. and you see that the far wall looks like it is over in their neighbors back yard..

I have a 12-24mm lens that creates this type of effect. Good for some landscape, but you have to be careful of side effects for interior.

BTW: the 3D home views are even more distorted..

[sdrealtor]

Zillow just bought this one in MM for $787,500. That is full retail on it. It may even be a touch high for this one in that condition. They put it back on at a price that is no better than breakeven if they get that price.

https://www.zillow.com/homes/10842-Whitehall-Rd-San-Diego,-CA-92126_rb/16788569_zpid/

[Escoguy]

Now that Zillow is pausing, they have at least a dozen or so in North County, haven’t done a formal tally.

The “explanation” is they can’t find enough people to prep the houses for sale etc.

Will be notable to see how the buy and flip goes at that level.

Not really convinced the model works, most landlords rely on cashflow and owners get place to live, Zillow only gains if the momentum keeps up which today may be 50/50 on a month to month basis.

Kind of a shame, they get in skew the data some and come up with a lame excuse to pause.

Given the corporate overheads, the need to bring in margins of 3-5K per month to breakeven. Individuals don’t need that kind of short term gain to cover a payroll. So in a sense this business model is borderline ridiculous. But what do I really know?

[sdrealtor]

Youre correct. They seem to have been overpaying. As long as values are skyrocketing it was ok. Once things slowed they were likely losing money. I think they may have learned a lesson. It’s not easy and success flipping comes in the trenches

[gzz]

Wow, MM is quite cheap for how central it is. I hate driving on MM Blvd however, seems rush hour there starts at 2:30 and goes to 7 and people drive aggressively and poorly on it, like LA though not that bad.

[svelte]

[quote=sdrealtor]Zillow just bought this one in MM for $787,500. That is full retail on it. It may even be a touch high for this one in that condition. They put it back on at a price that is no better than breakeven if they get that price.

https://www.zillow.com/homes/10842-Whitehall-Rd-San-Diego,-CA-92126_rb/16788569_zpid/%5B/quote%5D

$800K for that crackerbox. What planet am I on?

[an]

[quote=svelte][quote=sdrealtor]Zillow just bought this one in MM for $787,500. That is full retail on it. It may even be a touch high for this one in that condition. They put it back on at a price that is no better than breakeven if they get that price.

https://www.zillow.com/homes/10842-Whitehall-Rd-San-Diego,-CA-92126_rb/16788569_zpid/%5B/quote%5D

$800K for that crackerbox. What planet am I on?[/quote]
California planet

[treehugger]

For fun I filled out the form to see if Zillow would buy my rental condo, we looked at comps and thought maybe $560,000 and Zillow came back and offered me $578,000, they have high fees (7.5%) but I still would have walked with what I expected….They also offered to assist with our 1031 exchange….the house we were going to flip into ended up in a bidding war and went for way over ask so we ultimately decided to keep condo.

[Author]

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