What is Zillow’s strategy here? (Phoenix: landscaping, buying, tile)

[scully2010]

One of the things I see in the housing market in Phoenix that concerns me is houses that sold for $300K when they were built are now being sold for $1.3 million. These aren't 40-50 year old homes, either. They're built 15-20 years ago. So they were built inexpensively without many bells and whistles. I'm much more interested in a home that sold for $800K or $900K 15-20 years ago that is now being sold for $1.3 million, even if it needs a remodel. That's a better built home in my opinion.

[MN-Born-n-Raised]

Originally Posted by scully2010

One of the things I see in the housing market in Phoenix that concerns me is houses that sold for $300K when they were built are now being sold for $1.3 million. These aren't 40-50 year old homes, either. They're built 15-20 years ago. So they were built inexpensively without many bells and whistles. I'm much more interested in a home that sold for $800K or $900K 15-20 years ago that is now being sold for $1.3 million, even if it needs a remodel. That's a better built home in my opinion.

What areas sold new for $300K in 2006? That was a PEAK price year for buying. The home we bought in 2011 for $190K sold originally for $500K back in 2006. And it is worth no more than $625K now. I cannot imagine an area that is worth >$1M rising from $300K built new in 2006. Maybe you are looking at the lot value? Those numbers you mentioned seem impossible.

[john3232]

Originally Posted by MN-Born-n-Raised

What areas sold new for $300K in 2006? That was a PEAK price year for buying. The home we bought in 2011 for $190K sold originally for $500K back in 2006. And it is worth no more than $625K now. I cannot imagine an area that is worth >$1M rising from $300K built new in 2006. Maybe you are looking at the lot value? Those numbers you mentioned seem impossible.

I recall Queens Creek being talked up before the crash as well as new builds in the back end of Chandler where farming was going on. The new build (2007) I picked up in 2011 originally sold within the 300k range. However, it's nowhere near 1M today. I could sell it next week for 500k but not much more.

Having lived in the Phx metro for the past several years I come to like Chandler a lot. (Or at least the areas I visit. I realize there are less than desirable areas within Chandler but I've never been driven through them.)

[jdahunt]

We close on a condo in a couple of weeks that Open Door owns.....on the sale I just don't see how they are making much money from what they paid and what they put into it....all new flooring (carpet in bedrooms and tile elsewhere), new counter tops and bathroom tile include one shower, new cabinets and all new fixtures and new appliances.

They bought it directly from a homeowner without it being listed, I was told that they collect fees' from that as well as fee's to fix it up then they have their own realtors and the title company where they make more fee's.

We are probably over paying by $15-20k which is ok since its move in ready.....it will be the most expensive unit in the complex for probably a month until someone lists at the new price level.

My son sent me this interesting article....

https://www.bloomberg.com/news/artic...lipping-fumble

[MN-Born-n-Raised]

Originally Posted by jdahunt

We close on a condo in a couple of weeks that Open Door owns.....on the sale I just don't see how they are making much money from what they paid and what they put into it....all new flooring (carpet in bedrooms and tile elsewhere), new counter tops and bathroom tile include one shower, new cabinets and all new fixtures and new appliances.

They bought it directly from a homeowner without it being listed, I was told that they collect fees' from that as well as fee's to fix it up then they have their own realtors and the title company where they make more fee's.

We are probably over paying by $15-20k which is ok since its move in ready.....it will be the most expensive unit in the complex for probably a month until someone lists at the new price level.

My son sent me this interesting article....

https://www.bloomberg.com/news/artic...lipping-fumble

What a great link. Opendoor bought a house by a friend of ours in Surprise (from memory) $535K. That was 2 months ago and nothing has been fixed. I should have called Zillow and Opendoor to see if they wanted to overpay for my former place.

[jdahunt]

Here is a link to view the Zillow owned homes as well as a house they currently have listed......it will be interesting to see what happens with them not overpaying for houses now.

https://www.zillow.com/z/offers/zill...es/#shop-homes

6806 W Quail Ave, Glendale, AZ 85308

[phx1205]

Over 93% of Zillow owned homes in Phoenix are now listed for less than they paid. Wow. https://www.marketwatch.com/amp/stor...er-11635785293

[ajonesaz]

Originally Posted by phx1205

Over 93% of Zillow owned homes in Phoenix are now listed for less than they paid. Wow. https://www.marketwatch.com/amp/stor...er-11635785293

It seems like they were trying to price fix neighborhoods, but didn't own enough properties and failed....

[MN-Born-n-Raised]

Originally Posted by ajonesaz

It seems like they were trying to price fix neighborhoods, but didn't own enough properties and failed....

I'd say they were trying to beat Opendoor and others and tripped on their ding-dong for market share reasons. Even if they lose $$, their long game is about being #1 in the RE market. That includes financing, having RE agents, charging advertising leads, and disrupting everything about how people buy and sell homes.

[Burning Madolf]

Originally Posted by phx1205

Over 93% of Zillow owned homes in Phoenix are now listed for less than they paid. Wow. https://www.marketwatch.com/amp/stor...er-11635785293

They just listed one of those in my hood for $20k less than they paid 4-6 weeks ago.
Maybe they're hoping for bidding wars just to break even.
Might be a nice opportunity for buyers to snag a house with a low ball offer.