10 ms·

Good riddance, I hope this company burns to the ground The software developers working for this company knowingly tried to make algorithms to flip and profit o

by enlyth 5y ago

Good riddance, I hope this company burns to the ground The software developers working for this company knowingly tried to make algorithms to flip and profit off of something that should be a human right Replacing carpets and painting walls, trying to flip for a 20% profit, the people running Z must be geniuses As a millennial looking at 2 bedroom flats selling for £575k (780k usd, not far from a million dollars) in my area, I cannot help but have tears of joy when corporations who hope to profit off of our desperate housing situation get hit by reality straight in the face Ask yourself who benefits from housing prices rising. If you lie to yourself that it's people who are trying to move up the housing ladder, remember that your flat appreciating 50% in 2 years means the house you want to move into by selling your flat also appreciates 50%, so you win nothing It's the rent seeking leeches of society that think that by buying a "portfolio" of houses, they can live out their lives without contributing society in any way Anyone arguing against this has either a dog in the race, or loose screws in the head

emodendroket 5y ago
Well I sold my house in Massachusetts, moved to California, and bought a new one this year and I definitely think the extreme liquidity of housing made it much easier, plus without the equity I doubt I would have been able to afford it. But yes obviously it’s not favorable for anyone who doesn’t already own. I do think there is a place for a service like this even in a less frothy market. Like a trade in for a car, there’s definitely some percentage of people willing to accept a deal that is not the top one if it means they can cash out faster and with less hassle.
AussieWog93 5y ago
In defense of Zillow, they weren't looking to buy a "portfolio" of houses - they bought as many as they sold, and didn't have any net negative effect on housing supply. Yes, they're profiting off of a bad situation, but they're not the cause of it. Bev from the local council's planning department, as well as Michael Caton's horrific propaganda piece, has done more damage than every flipper combined.
- arcticfox 5y ago
  > Yes, they're profiting off of a bad situation That seems like it was the idea but amusingly, per this article, not exactly the right word for what they were doing
- lokar 5y ago
  They were trying to act as a market maker, providing liquidity for a price. Nothing wrong with that.
  - iskander 5y ago
    It's more complicated than that since they also have a huge influence on prices through Zestimates. They undoubtably kept housing prices rising for the past few years, which was very profitable to them as large scale flippers.
  - engineer_22 5y ago
    The market doesn't need any more liquidity. Banks will lend to anyone with a pulse.
    - lokar 5y ago
      That is not the kind of liquidity I'm talking about. Look up what companies like citadel securities do in equities markets.
  - mym1990 5y ago
    More so than providing liquidity they are providing increased velocity. I would love to know if there are properties that Z has bought and sold more than once...
  - maxsilver 5y ago
    > Nothing wrong with that. Zillow was literally scalping housing, a basic human need that all people must buy. That's generally considered very immoral by most reasonable people. And they didn't just do it once or twice, they did it at ridiculous scale (tens of thousands of homes sold last quarter, was a sale to a scalper to artificially drive up all housing prices). Most reasonable people would consider this behaviour to be evil (like, comic-book-villain level evil). Even scalping a optional-only luxury item like concert tickets or whatever is already considered unethical by most folks.
acchow 5y ago
Zillow basically bought homes, repainted them, then sold them. Why is this so villainous?
- deleted 5y ago
  [deleted]
- iskander 5y ago
  Because they would outbid people who actually want to live in those homes, essentially front-running the middle class to earn a massive profit.
  - CaveTech 5y ago
    Except that massive profit is a ... massive loss.
    - danrocks 5y ago
      Which is going to be a lot better for the middle class in the area then the situation pre-Zillow iBuyer (given the massive discounts). Zillow was a net-positive at least for the Phoenix market.
    - iskander 5y ago
      ...last quarter. They ran the housing market up 2x, took profits along the way, and dismantled the operation when banks put a cap on mortgages.
  - yanderekko 5y ago
    So if the previous owners moved out and then repainted the house and sold it for 20% additional value, would they be villains too? Or is it okay because they're "middle class" and Zillow's shareholders presumably are just yacht-owning billionaires?
    - _vertigo 5y ago
      I think there’s a difference between a company with enormous amounts of capital buying a bunch of houses to flip, intentionally trying to drive a trend of increasing home prices to profit, and a single homeowner improving a single house and profiting primarily because of the improvements and not because he’s driving the market up massively..
rcpt 5y ago
Until Zillow starts whining about neighborhood character at city council meetings and donating to Howard Jarvis taxpayers association I couldn't care less what they do
madengr 5y ago
If housing is a human right, then slavery is too, as you demand people’s labor to satisfy your right. You are free to go put up a mud hut (provided you own the land).
robocat 5y ago
> If you lie to yourself that it's people who are trying to move up the housing ladder, remember that your flat appreciating 50% in 2 years means the house you want to move into by selling your flat also appreciates 50%, so you win nothing I think that is a little myopic. Older buyers that are downsizing can make an excess profit in that situation. Although perhaps if excess numbers are downsizing to the same retirement homes, then maybe the retirement home owners win instead. Also if you have a second investment property, you are definitely winning. Finally, as house prices go up, you do end up with more equity (perhaps way more equity because a mortgage is geared lending). More equity can make a huge difference if you have any economic shocks, or if you care about passing on your equity to your children. Let’s say you have 10% equity in a $500k home, which then appreciates to $1M. If you die, you now have 550k equity, which is 11% house deposits for 5 children, or 27% deposits for each of two children. Not a bad trick. I think a better way to think about it is that you need to own 1 house. If you don’t own a house, then you are shorting the housing market. If you own 2 then you are long the housing market. If you are a couple with kids, then you need to consider the chance of divorce (owning 1 home each is conservative, owning 1 home together is risky), and consider how much you want to give to your kids. Due to moral hazard I can’t see how you could insure against the risk of divorce.
- insaneirish 5y ago
  > I think a better way to think about it is that you need to own 1 house. If you don’t own a house, then you are shorting the housing market. If you own 2 then you are long the housing market. You are born short housing. Relevant: https://thezikomoletter.wordpress.com/2012/12/10/you-are-naturally-short-housing/ https://thezikomoletter.wordpress.com/2012/12/10/you-are-nat...
devnull3 5y ago
> buying a "portfolio" of houses, they can live out their lives without contributing society in any way A lot of people want this. Its basic human nature ... take or construct the path of least resistance. Its just that most people cannot do this and only top 1% can. The whole FIRE movement makes ppl aspire for the day when they can live on passive income from the savings/investments. https://en.wikipedia.org/wiki/FIRE_movement https://en.wikipedia.org/wiki/FIRE_movement
- mikewarot 5y ago
  When we used to have a functional banking system, you could work your ass off, make your money, and simply put it in a savings account, or Certificate of Deposits (CDs), and make 4-8 percent interest while inflation was 2-3%. That money was reinvested locally as loans to local businesses. The advent of free money to cover the insolvent institutions caught making stupid decisions, but managing to be "too big to fail", stole a lot of money from local economies, and my parents.
- AgentOrange1234 5y ago
  I think FIRE is mainly about not needing to work anymore. Passive or investment income isn’t the goal, just an (important) way to be done working earlier. E.g., in a hypothetical world where you only had interest-free savings accounts, you could still retire early, you’d just need to save more first.
- Valakas_ 5y ago
  The thing with FIRE movement is more about escaping being forced to work soul sucking jobs, commuting, management, mindless boring tasks.... And it's not always easy to change fields, or change company, move city, .... People that I know that are already FIREd or plan to don't actually intend not to work. They want to, but on things they actually enjoy. If there was UBI the FIRE movement would go significantly down because one of it's main goals would be achieved by default. Right now the only way to get those goals is with passive income from investments. We have this one life, and wasting it is not the way to go. FIRE people don't want the riches or hoarding insanes amount of money for power trips with their buddies. Most are very frugal in fact, that's the only way to achieve FIRE in the firs place. They just want the freedom from forced work. That is the essence of the FIRE movement.
dvdhnt 5y ago
Commenters calling your comment ‘myopic’ is the pot calling the kettle black. Their attitude exemplifies the problem of the commoditization of a fundamental human need. They sacrifice the long term health of the housing market for short term profit. It’s shameful and I expect better from people who so often claim to be educated and logical. Personally, I couldn’t live with myself if I sold perfectly good family housing to a corporation for convenience’s sake. I admire your strong conviction. Cheers.
zapataband1 5y ago
I agree with you 100% except I don't think that people trying to buy some houses to maintain and rent out are the problem. Mainly these huge corporations, esp. things like Tesla, and Arms corporations, that for decades have leeched from the middle class and gov contracts. Our gov is captured, dems can't keep a positive rating after trump because they wont pass anything meaningful.
grayhatter 5y ago
> It's the rent seeking leeches of society that think that by buying a "portfolio" of houses, they can live out their lives without contributing society in any way What implication am I supposed to take from this? Everyone has must contribute meaningfully to society or they're shit? > Anyone arguing against this has either a dog in the race, or loose screws in the head So if I don't already agree with you, I'm either lying for finical gain, or insane? Rough options... :(
- pertymcpert 5y ago
  No, they're saying if you rent seek without contributing anything then you're shit. Which is correct. If you just contribute nothing then you're ahead of these rent seekers.
  - grayhatter 5y ago
    So am I allowed to 'rent seek' if I also contribute? Or is 'rent seeking' so bad, merely contributing isn't enough? Is there an amount of rent seeking that's ok? Or is any amount of rent seeking egregious enough to get you on the shit list?
    - aeturnum 5y ago
      I think you're confusing the common meaning of rent for "rent seeking"[1] which, in economics, means specifically getting more resources in return for nothing. It's a pejorative definition. Getting paid for a service is not rent seeking in the way people are using it here. [1] https://www.investopedia.com/terms/r/rentseeking.asp https://www.investopedia.com/terms/r/rentseeking.asp
      - grayhatter 5y ago
        I actually didn't know about the pejorative nature of 'rent seeking', so genuine thanks for the link! IMO I didn't need to either, knowing the commonalty doesn't change the intent I was going for. Even if you're seeking rent above the break even point. I'd still say that's amoral at it it's worse ethically speaking. I mean to expose the hyperbole of the assertion that wanting to wake profit in of itself doesn't make you a leach. Manipulating the market, coercing a negative sum game (accepting a loss to force out competition because you can expend the resources). These are the immoral things people do. Pretending that, just owning property and having them gall to dare to not rent it at or below cost is what's immoral or unethical is harmful to persuading anyone currently undecided, that there are real harms with allowing malicious parties to abuse their capital to prevent others from even playing the game. Which is where the majority of the harms originate from. You dont win hearts and minds by lying about how the game is unfair, and anyone who dares to play is immoral. That's obviously untrue. The people that are cheating, or abusing the rules are what's unfair. And without the majority consensus we'll never be able to fix the defects in the rules.
Apofis 5y ago
So? Flip yourself then. Buy a 2 family unit, renovate it while you live in one of the units, and then flip when you're done. Repeat a second time. Now you're set. All of this is folded into your mortgage. If you're not a capitalist, you're not going to have a good time since no one is going to break your doors down to save you.
- ColonelPhantom 5y ago
  And where do you suggest an average person gets the money to do this? A lot of people cannot even afford to buy a home for themselves, let alone a 2 family unit.
Gatsky 5y ago
Note that the free market has ultimately punished these companies. On the other hand, the unaccountable councils and politicians are the ones creating the problem due to zoning an supply issues. As such, I think the outrage is a bit misdirected (as it often is).
michalu 5y ago
Since I don't own any properties I must have some loose screws in my head as apparently only 2 options are available. :) It must be this then that leaks some questions in my thoughts. What if the money you buy the properties with is a result of your contributions? Is there a decent and accessible way to have funds to buy such properties while not having to contribute first? Let's say I've spent 20 years working 12 hours a day contributing about 4x the average productivity - would it be ok to buy properties and continue not contributing or should I be forced to continue contributing? What is the optimal path to reap rewards of my contributions? Having taxpayers pay that money to me in a form of retirement is one way, but what if I paid 10x more taxes as a result of my contributions should 10 other people pool their taxes to pay my retiremenet to make it fair? Or will I get the same as those who worked half what I did? I remember my father told me that in communism there were two options as well, you either had to contribute how you were told or else you were a parasite and put to jail. Seemed fair to many. In 1920s Russia they mostly genocided them - this is not considered fair these days. I guess the reason it seemed fair to many is that there is truth to the simplistic formulation of your feelings. The best definition of evil I've ever heard was - "all evil is perverted good, and it is that aspect of the good which it retains that makes it attractive to many people" Anyway, writing this as someone "without a dog in the race" what about your dogs in the race - you mentioned you were looking at properties right now?
- gjulianm 5y ago
  > What if the money you buy the properties with is a result of your contributions? This isn't math. Prior "good" contributions to society don't even out "bad" contributions, no matter how we define them. To put an extreme example, you're not allowed to steal from anyone no matter how many people you helped recover their money from scams. > What is the optimal path to reap rewards of my contributions? It's very easy: do not speculate with human rights. When you buy a house for "investment", you are adding demand to the market, pushing prices up. Housing is inelastic, specially in the short term, so you're probably driving someone that needed a place to live out of the market, just for what? To sell it later for a higher price, driving prices further up? To rent it to people that need a place to leave, making it so that they lose wealth to you instead of owning it? There's no need to delve into deep philosophical discussions of what is right and wrong, what is fair and isn't, and what did the communists do. The discussion is simple: don't speculate with housing.
sydthrowaway 5y ago
I agree with you. Moments like these are a mask off moment for HN. The North Star of the community is to get rich quick, no matter the cost. Just look at the Who’s Hiring threads, and 90% of them are fly by night SaaS looking to make a quick buck.
nmca 5y ago
You make a common mistake about leveraged bets here in your claim about "gaining nothing". Suppose house prices evolve from price p0 to price p. The market gains (or loses) p/p0 in that period. If you get a mortgage, you're borrowing money to buy at p0; at any point in time with a price p and total repaid r your total value is given by (deposit + r + p) - p0. You're in negative equity if (deposit + r + p) < p0. You're in the money if p > p0, but note that this isn't multiplying your investment by the market gain. Instead, it's exposing you to the absolute change in price. So suppose (deposit + r) = 40k ; p0 = 145k ; p = 190k. You're in the money for 40k + 190k - 145k = 85k, having invested 40k (roi=2.1). p1/p0 = 1.3 (<2.1), with your leverage (mortgage) having bought you more exposure to house prices. You can then liquify and re-lever back into the housing market, with a larger loan due to you larger deposit (and likely increased income). Historically this has worked very well for people as p has tended to be larger than p0. It does not work well if you end up in negative equity.
SergeAx 5y ago
Although I mostly agree with your point except it being unnecessary emotional, I want to bring your attention to the fact that for some people having enough money to buy a house means that they contributed to the society and was rewarded with this wealth for it.
deelowe 5y ago
Come on. You talk about SV types not knowing what they are doing and then offer this up as an explanation? Real estate is going up in value for the following reasons: - Almost 2 decades of QE and cheap loans - More people working from home - Boomers leaving the workforce and cashing in their retirement - People leaving high cost of living areas - Foreign investment There is no conspiracy. As these things pull back, and they will in the next 5+ years, things will soften. What Zillow was trying to do is something a bit different but it doesn't matter because they ultimately failed.
dang 5y ago
I totally get the frustration, but please do not post flamewar comments to HN. It's not what this site is for, and it destroys what it is for. If you'd please review https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html and stick to the rules when posting here, we'd appreciate it. We detached this subthread from https://news.ycombinator.com/item?id=29090845 https://news.ycombinator.com/item?id=29090845.

by enlyth 5y ago

emodendroket 5y ago

Well I sold my house in Massachusetts, moved to California, and bought a new one this year and I definitely think the extreme liquidity of housing made it much easier, plus without the equity I doubt I would have been able to afford it. But yes obviously it’s not favorable for anyone who doesn’t already own. I do think there is a place for a service like this even in a less frothy market. Like a trade in for a car, there’s definitely some percentage of people willing to accept a deal that is not the top one if it means they can cash out faster and with less hassle.

AussieWog93 5y ago

In defense of Zillow, they weren't looking to buy a "portfolio" of houses - they bought as many as they sold, and didn't have any net negative effect on housing supply. Yes, they're profiting off of a bad situation, but they're not the cause of it. Bev from the local council's planning department, as well as Michael Caton's horrific propaganda piece, has done more damage than every flipper combined.

arcticfox 5y ago
> Yes, they're profiting off of a bad situation That seems like it was the idea but amusingly, per this article, not exactly the right word for what they were doing
lokar 5y ago
They were trying to act as a market maker, providing liquidity for a price. Nothing wrong with that.
- iskander 5y ago
  It's more complicated than that since they also have a huge influence on prices through Zestimates. They undoubtably kept housing prices rising for the past few years, which was very profitable to them as large scale flippers.
- engineer_22 5y ago
  The market doesn't need any more liquidity. Banks will lend to anyone with a pulse.
  - lokar 5y ago
    That is not the kind of liquidity I'm talking about. Look up what companies like citadel securities do in equities markets.
- mym1990 5y ago
  More so than providing liquidity they are providing increased velocity. I would love to know if there are properties that Z has bought and sold more than once...
- maxsilver 5y ago
  > Nothing wrong with that. Zillow was literally scalping housing, a basic human need that all people must buy. That's generally considered very immoral by most reasonable people. And they didn't just do it once or twice, they did it at ridiculous scale (tens of thousands of homes sold last quarter, was a sale to a scalper to artificially drive up all housing prices). Most reasonable people would consider this behaviour to be evil (like, comic-book-villain level evil). Even scalping a optional-only luxury item like concert tickets or whatever is already considered unethical by most folks.

acchow 5y ago

Zillow basically bought homes, repainted them, then sold them. Why is this so villainous?

deleted 5y ago
[deleted]
iskander 5y ago
Because they would outbid people who actually want to live in those homes, essentially front-running the middle class to earn a massive profit.
- CaveTech 5y ago
  Except that massive profit is a ... massive loss.
  - danrocks 5y ago
    Which is going to be a lot better for the middle class in the area then the situation pre-Zillow iBuyer (given the massive discounts). Zillow was a net-positive at least for the Phoenix market.
  - iskander 5y ago
    ...last quarter. They ran the housing market up 2x, took profits along the way, and dismantled the operation when banks put a cap on mortgages.
- yanderekko 5y ago
  So if the previous owners moved out and then repainted the house and sold it for 20% additional value, would they be villains too? Or is it okay because they're "middle class" and Zillow's shareholders presumably are just yacht-owning billionaires?
  - _vertigo 5y ago
    I think there’s a difference between a company with enormous amounts of capital buying a bunch of houses to flip, intentionally trying to drive a trend of increasing home prices to profit, and a single homeowner improving a single house and profiting primarily because of the improvements and not because he’s driving the market up massively..

rcpt 5y ago

Until Zillow starts whining about neighborhood character at city council meetings and donating to Howard Jarvis taxpayers association I couldn't care less what they do

madengr 5y ago

If housing is a human right, then slavery is too, as you demand people’s labor to satisfy your right. You are free to go put up a mud hut (provided you own the land).

robocat 5y ago

> If you lie to yourself that it's people who are trying to move up the housing ladder, remember that your flat appreciating 50% in 2 years means the house you want to move into by selling your flat also appreciates 50%, so you win nothing I think that is a little myopic. Older buyers that are downsizing can make an excess profit in that situation. Although perhaps if excess numbers are downsizing to the same retirement homes, then maybe the retirement home owners win instead. Also if you have a second investment property, you are definitely winning. Finally, as house prices go up, you do end up with more equity (perhaps way more equity because a mortgage is geared lending). More equity can make a huge difference if you have any economic shocks, or if you care about passing on your equity to your children. Let’s say you have 10% equity in a $500k home, which then appreciates to $1M. If you die, you now have 550k equity, which is 11% house deposits for 5 children, or 27% deposits for each of two children. Not a bad trick. I think a better way to think about it is that you need to own 1 house. If you don’t own a house, then you are shorting the housing market. If you own 2 then you are long the housing market. If you are a couple with kids, then you need to consider the chance of divorce (owning 1 home each is conservative, owning 1 home together is risky), and consider how much you want to give to your kids. Due to moral hazard I can’t see how you could insure against the risk of divorce.

insaneirish 5y ago
> I think a better way to think about it is that you need to own 1 house. If you don’t own a house, then you are shorting the housing market. If you own 2 then you are long the housing market. You are born short housing. Relevant: https://thezikomoletter.wordpress.com/2012/12/10/you-are-naturally-short-housing/ https://thezikomoletter.wordpress.com/2012/12/10/you-are-nat...

devnull3 5y ago

> buying a "portfolio" of houses, they can live out their lives without contributing society in any way A lot of people want this. Its basic human nature ... take or construct the path of least resistance. Its just that most people cannot do this and only top 1% can. The whole FIRE movement makes ppl aspire for the day when they can live on passive income from the savings/investments. https://en.wikipedia.org/wiki/FIRE_movement https://en.wikipedia.org/wiki/FIRE_movement

mikewarot 5y ago
When we used to have a functional banking system, you could work your ass off, make your money, and simply put it in a savings account, or Certificate of Deposits (CDs), and make 4-8 percent interest while inflation was 2-3%. That money was reinvested locally as loans to local businesses. The advent of free money to cover the insolvent institutions caught making stupid decisions, but managing to be "too big to fail", stole a lot of money from local economies, and my parents.
AgentOrange1234 5y ago
I think FIRE is mainly about not needing to work anymore. Passive or investment income isn’t the goal, just an (important) way to be done working earlier. E.g., in a hypothetical world where you only had interest-free savings accounts, you could still retire early, you’d just need to save more first.
Valakas_ 5y ago
The thing with FIRE movement is more about escaping being forced to work soul sucking jobs, commuting, management, mindless boring tasks.... And it's not always easy to change fields, or change company, move city, .... People that I know that are already FIREd or plan to don't actually intend not to work. They want to, but on things they actually enjoy. If there was UBI the FIRE movement would go significantly down because one of it's main goals would be achieved by default. Right now the only way to get those goals is with passive income from investments. We have this one life, and wasting it is not the way to go. FIRE people don't want the riches or hoarding insanes amount of money for power trips with their buddies. Most are very frugal in fact, that's the only way to achieve FIRE in the firs place. They just want the freedom from forced work. That is the essence of the FIRE movement.

dvdhnt 5y ago

Commenters calling your comment ‘myopic’ is the pot calling the kettle black. Their attitude exemplifies the problem of the commoditization of a fundamental human need. They sacrifice the long term health of the housing market for short term profit. It’s shameful and I expect better from people who so often claim to be educated and logical. Personally, I couldn’t live with myself if I sold perfectly good family housing to a corporation for convenience’s sake. I admire your strong conviction. Cheers.

zapataband1 5y ago

I agree with you 100% except I don't think that people trying to buy some houses to maintain and rent out are the problem. Mainly these huge corporations, esp. things like Tesla, and Arms corporations, that for decades have leeched from the middle class and gov contracts. Our gov is captured, dems can't keep a positive rating after trump because they wont pass anything meaningful.

grayhatter 5y ago

> It's the rent seeking leeches of society that think that by buying a "portfolio" of houses, they can live out their lives without contributing society in any way What implication am I supposed to take from this? Everyone has must contribute meaningfully to society or they're shit? > Anyone arguing against this has either a dog in the race, or loose screws in the head So if I don't already agree with you, I'm either lying for finical gain, or insane? Rough options... :(

pertymcpert 5y ago
No, they're saying if you rent seek without contributing anything then you're shit. Which is correct. If you just contribute nothing then you're ahead of these rent seekers.
- grayhatter 5y ago
  So am I allowed to 'rent seek' if I also contribute? Or is 'rent seeking' so bad, merely contributing isn't enough? Is there an amount of rent seeking that's ok? Or is any amount of rent seeking egregious enough to get you on the shit list?
  - aeturnum 5y ago
    I think you're confusing the common meaning of rent for "rent seeking"[1] which, in economics, means specifically getting more resources in return for nothing. It's a pejorative definition. Getting paid for a service is not rent seeking in the way people are using it here. [1] https://www.investopedia.com/terms/r/rentseeking.asp https://www.investopedia.com/terms/r/rentseeking.asp
    - grayhatter 5y ago
      I actually didn't know about the pejorative nature of 'rent seeking', so genuine thanks for the link! IMO I didn't need to either, knowing the commonalty doesn't change the intent I was going for. Even if you're seeking rent above the break even point. I'd still say that's amoral at it it's worse ethically speaking. I mean to expose the hyperbole of the assertion that wanting to wake profit in of itself doesn't make you a leach. Manipulating the market, coercing a negative sum game (accepting a loss to force out competition because you can expend the resources). These are the immoral things people do. Pretending that, just owning property and having them gall to dare to not rent it at or below cost is what's immoral or unethical is harmful to persuading anyone currently undecided, that there are real harms with allowing malicious parties to abuse their capital to prevent others from even playing the game. Which is where the majority of the harms originate from. You dont win hearts and minds by lying about how the game is unfair, and anyone who dares to play is immoral. That's obviously untrue. The people that are cheating, or abusing the rules are what's unfair. And without the majority consensus we'll never be able to fix the defects in the rules.

Apofis 5y ago

So? Flip yourself then. Buy a 2 family unit, renovate it while you live in one of the units, and then flip when you're done. Repeat a second time. Now you're set. All of this is folded into your mortgage. If you're not a capitalist, you're not going to have a good time since no one is going to break your doors down to save you.

ColonelPhantom 5y ago
And where do you suggest an average person gets the money to do this? A lot of people cannot even afford to buy a home for themselves, let alone a 2 family unit.

Gatsky 5y ago

Note that the free market has ultimately punished these companies. On the other hand, the unaccountable councils and politicians are the ones creating the problem due to zoning an supply issues. As such, I think the outrage is a bit misdirected (as it often is).

michalu 5y ago

Since I don't own any properties I must have some loose screws in my head as apparently only 2 options are available. :) It must be this then that leaks some questions in my thoughts. What if the money you buy the properties with is a result of your contributions? Is there a decent and accessible way to have funds to buy such properties while not having to contribute first? Let's say I've spent 20 years working 12 hours a day contributing about 4x the average productivity - would it be ok to buy properties and continue not contributing or should I be forced to continue contributing? What is the optimal path to reap rewards of my contributions? Having taxpayers pay that money to me in a form of retirement is one way, but what if I paid 10x more taxes as a result of my contributions should 10 other people pool their taxes to pay my retiremenet to make it fair? Or will I get the same as those who worked half what I did? I remember my father told me that in communism there were two options as well, you either had to contribute how you were told or else you were a parasite and put to jail. Seemed fair to many. In 1920s Russia they mostly genocided them - this is not considered fair these days. I guess the reason it seemed fair to many is that there is truth to the simplistic formulation of your feelings. The best definition of evil I've ever heard was - "all evil is perverted good, and it is that aspect of the good which it retains that makes it attractive to many people" Anyway, writing this as someone "without a dog in the race" what about your dogs in the race - you mentioned you were looking at properties right now?

gjulianm 5y ago
> What if the money you buy the properties with is a result of your contributions? This isn't math. Prior "good" contributions to society don't even out "bad" contributions, no matter how we define them. To put an extreme example, you're not allowed to steal from anyone no matter how many people you helped recover their money from scams. > What is the optimal path to reap rewards of my contributions? It's very easy: do not speculate with human rights. When you buy a house for "investment", you are adding demand to the market, pushing prices up. Housing is inelastic, specially in the short term, so you're probably driving someone that needed a place to live out of the market, just for what? To sell it later for a higher price, driving prices further up? To rent it to people that need a place to leave, making it so that they lose wealth to you instead of owning it? There's no need to delve into deep philosophical discussions of what is right and wrong, what is fair and isn't, and what did the communists do. The discussion is simple: don't speculate with housing.

sydthrowaway 5y ago

I agree with you. Moments like these are a mask off moment for HN. The North Star of the community is to get rich quick, no matter the cost. Just look at the Who’s Hiring threads, and 90% of them are fly by night SaaS looking to make a quick buck.

nmca 5y ago

You make a common mistake about leveraged bets here in your claim about "gaining nothing". Suppose house prices evolve from price p0 to price p. The market gains (or loses) p/p0 in that period. If you get a mortgage, you're borrowing money to buy at p0; at any point in time with a price p and total repaid r your total value is given by (deposit + r + p) - p0. You're in negative equity if (deposit + r + p) < p0. You're in the money if p > p0, but note that this isn't multiplying your investment by the market gain. Instead, it's exposing you to the absolute change in price. So suppose (deposit + r) = 40k ; p0 = 145k ; p = 190k. You're in the money for 40k + 190k - 145k = 85k, having invested 40k (roi=2.1). p1/p0 = 1.3 (<2.1), with your leverage (mortgage) having bought you more exposure to house prices. You can then liquify and re-lever back into the housing market, with a larger loan due to you larger deposit (and likely increased income). Historically this has worked very well for people as p has tended to be larger than p0. It does not work well if you end up in negative equity.

SergeAx 5y ago

Although I mostly agree with your point except it being unnecessary emotional, I want to bring your attention to the fact that for some people having enough money to buy a house means that they contributed to the society and was rewarded with this wealth for it.

deelowe 5y ago

Come on. You talk about SV types not knowing what they are doing and then offer this up as an explanation? Real estate is going up in value for the following reasons: - Almost 2 decades of QE and cheap loans - More people working from home - Boomers leaving the workforce and cashing in their retirement - People leaving high cost of living areas - Foreign investment There is no conspiracy. As these things pull back, and they will in the next 5+ years, things will soften. What Zillow was trying to do is something a bit different but it doesn't matter because they ultimately failed.

dang 5y ago

I totally get the frustration, but please do not post flamewar comments to HN. It's not what this site is for, and it destroys what it is for. If you'd please review https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html and stick to the rules when posting here, we'd appreciate it. We detached this subthread from https://news.ycombinator.com/item?id=29090845 https://news.ycombinator.com/item?id=29090845.