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.
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.
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
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.
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.
>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
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?
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.
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.
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.
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.
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...
