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> 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

> 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.

pcwalton 5y ago
I don't consider it evil. When you buy a house, fix it up, and resell it, you're essentially providing a renovation service to whoever will buy it next. There's no meaningful difference between you renovating a house and selling it and an owner-occupant buying the house and renovating it themselves. In this case, Zillow bought houses too high and sold them too low. As a result, the market punished that irrational behavior.
- 93po 5y ago
  If there's no difference then there'd be no profit for Zillow and they wouldn't be doing this to begin with. Clearly there's a difference and it's morally bankrupt
  - esyir 5y ago
    His argument is that Zillow was providing a valuable service in the renovation process. Value-add allows them to charge for it.
    - 93po 5y ago
      That would make sense if Zillow employees were literally the people painting the walls. As it is (or was), there's probably a project manager that managed hundreds of houses, spends all day on the phone call painting companies, and then just assumes they do a good job. I'm perfectly capable of calling a painting company myself and don't need to pay Zillow thousands of dollars extra to do it for me.
      - esyir 5y ago
        The integration of renovation in the sales process is a differentiating factor in itself. That you're not the target market or, that it might not have been successful, doesn't change that.
  - UncleEntity 5y ago
    Isn’t this whole issue based on the fact that there is no profit for Zillow and they are no longer going to be doing this? Half a billion dollar loss seems like a pretty good indication that maybe…
jnwatson 5y ago
There are several TV shows that show house flippers. You think that's immoral? For each property, they engage in two transactions for which all parties involved are willing participants. How is that immoral?
- pas 5y ago
  Willingness is not necessarily, informed consent, and even that might be due to exogenous probabilistic predetermination. So if we go by Rawlsian concepts: if it's not fair, it's immoral. If the market maker makes too much, then it's economic rent (due to rent-seeking behavior), which a lot of people consider immoral.
  - jnwatson 5y ago
    I don’t understand how it is rent seeking. They are actually improving the supply of housing by fixing them up. How is it possible for the market-maker to make “too much” in a free competitive market? They don’t have any special capability that the average home buyer doesn’t have. I really don’t understand the angle. Capitalism is all about selling 5 cent pencils for 10 cents.
gruez 5y ago
>Zillow was literally scalping housing [...]. That's generally considered very immoral by most reasonable people. sorry, what were they doing? Scalping may also refer to: Scalping (trading), in trading securities and commodities either a fraudulent form of market manipulation or a legitimate form of arbitrage Ticket resale, the resale of tickets to a public event such as a concert or sporting event https://en.wikipedia.org/wiki/Scalping_(disambiguation) https://en.wikipedia.org/wiki/Scalping_(disambiguation) The arbitrage definition under "Scalping (trading)" (ie. making money off the bid/ask spread) doesn't seem very immoral to me. I don't think they were buying houses in an area, then recommending people to buy it, so it doesn't fall under the fraudulent definition. The "ticket resale" definition doesn't really fit, because zillow isn't really acquiring houses at below market value. They're buying houses from the same market as everyone else. >a basic human need that all people must buy you need to buy housing, not necessarily a house. They're not the same thing. You need to buy food to survive, but you don't necessarily to buy a farm. >tens of thousands of homes sold last quarter, was a sale to a scalper to artificially drive up all housing prices but the fact that they lost money suggests that they didn't drive up housing prices?
lordnacho 5y ago
First of all, lots of people thinking something doesn't make it true. Verify yourself at your local church. > Most reasonable people would consider this behaviour to be evil (like, comic-book-villain level evil). This requires supporting evidence. Comic book villains do things like murdering half of all living things. Show me that study that says people think flipping houses is that bad. I've met plenty of people who were flipping houses, and I'm pretty sure if most people thought it was on a par with comic book villainy, they would not just stand at a kids birthday party and talk about it.

pcwalton 5y ago

I don't consider it evil. When you buy a house, fix it up, and resell it, you're essentially providing a renovation service to whoever will buy it next. There's no meaningful difference between you renovating a house and selling it and an owner-occupant buying the house and renovating it themselves. In this case, Zillow bought houses too high and sold them too low. As a result, the market punished that irrational behavior.

93po 5y ago
If there's no difference then there'd be no profit for Zillow and they wouldn't be doing this to begin with. Clearly there's a difference and it's morally bankrupt
- esyir 5y ago
  His argument is that Zillow was providing a valuable service in the renovation process. Value-add allows them to charge for it.
  - 93po 5y ago
    That would make sense if Zillow employees were literally the people painting the walls. As it is (or was), there's probably a project manager that managed hundreds of houses, spends all day on the phone call painting companies, and then just assumes they do a good job. I'm perfectly capable of calling a painting company myself and don't need to pay Zillow thousands of dollars extra to do it for me.
    - esyir 5y ago
      The integration of renovation in the sales process is a differentiating factor in itself. That you're not the target market or, that it might not have been successful, doesn't change that.
- UncleEntity 5y ago
  Isn’t this whole issue based on the fact that there is no profit for Zillow and they are no longer going to be doing this? Half a billion dollar loss seems like a pretty good indication that maybe…

jnwatson 5y ago

There are several TV shows that show house flippers. You think that's immoral? For each property, they engage in two transactions for which all parties involved are willing participants. How is that immoral?

pas 5y ago
Willingness is not necessarily, informed consent, and even that might be due to exogenous probabilistic predetermination. So if we go by Rawlsian concepts: if it's not fair, it's immoral. If the market maker makes too much, then it's economic rent (due to rent-seeking behavior), which a lot of people consider immoral.
- jnwatson 5y ago
  I don’t understand how it is rent seeking. They are actually improving the supply of housing by fixing them up. How is it possible for the market-maker to make “too much” in a free competitive market? They don’t have any special capability that the average home buyer doesn’t have. I really don’t understand the angle. Capitalism is all about selling 5 cent pencils for 10 cents.

gruez 5y ago

>Zillow was literally scalping housing [...]. That's generally considered very immoral by most reasonable people. sorry, what were they doing? Scalping may also refer to: Scalping (trading), in trading securities and commodities either a fraudulent form of market manipulation or a legitimate form of arbitrage Ticket resale, the resale of tickets to a public event such as a concert or sporting event https://en.wikipedia.org/wiki/Scalping_(disambiguation) https://en.wikipedia.org/wiki/Scalping_(disambiguation) The arbitrage definition under "Scalping (trading)" (ie. making money off the bid/ask spread) doesn't seem very immoral to me. I don't think they were buying houses in an area, then recommending people to buy it, so it doesn't fall under the fraudulent definition. The "ticket resale" definition doesn't really fit, because zillow isn't really acquiring houses at below market value. They're buying houses from the same market as everyone else. >a basic human need that all people must buy you need to buy housing, not necessarily a house. They're not the same thing. You need to buy food to survive, but you don't necessarily to buy a farm. >tens of thousands of homes sold last quarter, was a sale to a scalper to artificially drive up all housing prices but the fact that they lost money suggests that they didn't drive up housing prices?

lordnacho 5y ago

First of all, lots of people thinking something doesn't make it true. Verify yourself at your local church. > Most reasonable people would consider this behaviour to be evil (like, comic-book-villain level evil). This requires supporting evidence. Comic book villains do things like murdering half of all living things. Show me that study that says people think flipping houses is that bad. I've met plenty of people who were flipping houses, and I'm pretty sure if most people thought it was on a par with comic book villainy, they would not just stand at a kids birthday party and talk about it.