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Comment by paulpauper | Hacker News Reader

This does not mean the zestiamte estimate is flawed, but that flipping homes is inherently risky in independent of the price estimate algo.

The huge, v-shaped recovery of the housing market and also stock market and GDP caught a lot of experts and pundits by surprise. The expectation was that, even with stimulus, that things would take years to recover as the US economy clawed its way out from the depths of the pandemic, but then Game Stop stock went up 100x and suddenly a FOMO unlike the likes ever seen took hold. Glad I didn't sell, and also I added to some stock positions in April 2020. Suddenly everything went from extreme over-supply to extreme shortages in a year.

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The "extreme shortage" media narrative is misleading. Supply in many areas is at or above pre pandemic levels. What's changed is a massive demand spike as society reshuffles and realigns to post pandemic life.

It's a subtle and important point because it means inflation is not transitory. You should buy all and any risk assets to protect against inflation including homes and GME.

It is absolutely not misleading.

In fact I would say it's understated. We lost a half of builders, a third of tradesmen, and saw a massive drop in people training for the trades after 2008.

We only caught up to the peak in new home builds a couple of years ago.

Sure, there was a demand spike, but supply is about a decade behind in a market where it takes a very long time for supply to ramp up.

I believe you are correct [1][2] that wage workers in these occupations have declined since 2008.

Is that related, however, to physical good supply chain disruptions in the past 12 months? And if you're referring to labor supply - we are basically at the same or better unemployment rate than we were in 2016... which was already a pretty good time in the economy.

[1] https://fred.stlouisfed.org/series/LEU0254505500A [2] https://fred.stlouisfed.org/series/LNU04032231

We have an extreme shortage of housing in places where there is demand.

We have a shortage of builders and tradesmen to build more.

This problem will take time to resolve.

> The huge, v-shaped recovery of the housing market and also stock market and GDP caught a lot of experts and pundits by surprise.

It is not recovery but a price inflation fueled by relentless government printing and injecting money into the system. Since the actual economic activity is still at the standstill (cannot get anythings from cars to Thanksgiving turkey) this new money has low velocity and needs to be parked somewhere. Hence, inflated housing and stock markets. Very sad state of affairs.

The Zestimate is seriously flawed to the point of it being utter crap.

The fact they used it as a basis for flipping homes makes me literally laugh. They were that delusional about their own shitty tech to just outright burn bails of money

Technically, they weren't using the Zestimate, it was a different algorithm developed for the iBuyer program (or so I've read).

The markets behavior is largely disconnected from GME though. We were on the upswing long before Jan 2021 because of all the money in the world looking for a place to go.

That said, I agree that many were surprised by the quick recovery (yay QE?).

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