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Comment by monkmartinez | Hacker News Reader

They simply overpaid. My neighbor received an offer of $150k over the z-estimate in Tucson. He felt that it would be stupid not to sell and wasn't even thinking about selling before the offer came in, so he sold. He paid a slight premium to buy his new house out in the boonies, but the gain offset the rise in price. They are currently listing his old house at the zestimate... I doubt they find a buyer even at that price unless its someone from out of state that has no clue.

I don't think it takes a rocket scientist to see the hockey stick graph on Zillow's price div to see this isn't a great time buy. It makes me giggle to think about what they were thinking. Some houses have tripled in "value" in a year. It's artificial and it will revert to the mean. Income in this city simply doesn't support the price level we are at for renting or buying. People are moving into apartments or out into the sticks to wait it out.

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I think you highlighted an important concept. Rather than overpay, people can look further out from a city center and get cheaper housing. Sure the commute may be longer but there has been a lot of remote working over the last year or so, many companies going fully remote.

Home buyers have many choices and at a certain price, its simply too much and they go elsewhere.

I think zillow is trying to unload their mistake onto some entity they can convince it is still worth it.

>look further out

This is what has driven up housing prices where I live. It's having a ripple effect as those with more flexible WFH schedules decide they can now afford to buy a home outside of the city, and those outside the city realize they can get a significant upgrade in home quality for no extra cost by moving still further away.

As people begin to make choices like this at a systemic level, I really think the WFH genie is well & truly out of the bottle for good: When people can get a significant boost in quality of life & w/l balance with nicer living quarters & more flexible schedule, we simply won't be willing to take a job that doesn't allow for this. Especially once we've made the move away from central business hubs already and would otherwise have to move back.

What would be really nice to see is some of the nearly vacant small rural towns see a resurgence of some kind. Grant programs by the government to spark a movement to these areas would be interesting.

And $150k is how much of the house? Needs some more numbers so we can get an idea of the scale of overpayment.

Because if they're just off a few percent, I don't know why Zillow wouldn't just hold on for a bit.

Carrying costs. Electricity, landscaping, water, sewer, city taxes, etc.

>as of October 27. Out of 224 homes, 208 — or 92.9% — were priced below what Zillow paid.

>36.5% were listed for less than the company first paid for them from the outset.

So these are ZillowBots numbers in Phoenix. They start off with a third going for less than they payed. The rest "hold on for a bit" and slowly the price keeps dropping

Eventually there are so many price drops where 93% of the homes are on the market (so, even now, not even sold) for less than what ZillowBot thought was a good idea

source: https://www.businessinsider.com/zillow-offers-ibuyer-sell-ph...

so 2/3 of these houses go with the "hold on for a bit" strategy then fail

I don't live there, but from the outside it seems like the Phoenix market is on a downwards trend, and they chose horrible timing, or really bad algorithm coding

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