Ask HN: House prices going up cause of software or people | Hacker News Reader

Ask HN: House prices going up cause of software or people

Wonder if the house prices are being worked up not by people but companies or may be just the software. I have been looking at the prices and one of the common trend is that the sites like Zillow present with their estimates ( Zestimates) which are always higher than the listed prices. Given that Zillow is in the business of buying(directly) and selling (via listings) it works in their favor to estimate the price on the higher side. Now the listing price which was already higher seems to be a better grab since the zestimates are much higher. This kind of software guided projection is always going to push the estimates on the higher side as per the existing/past slope. Wonder if all this is another kind of ponzy scheme going as like last real estate bubble.

Edit: This observation is only for US market in some hot real estate areas

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In the US, the financial industry has access to capital at an effective interest rate of 0%, they are rumored to be buying up real estate en masse, with the strategy of forcing everyone to become renters.

They've previously bought up a large portion of the mobile home parks and rapidly raised the rents on people who usually have no options to move.

> forcing everyone to become renters.

That's scary. First they made starting/running small businesses hard through regulations or by cutting prices so small businesses can't survive. Essentially making everyone employees. Now, this is entirely new level, make it impossible for average Joe to buy a house. That's extreme capitalism at work for you.

What I fail to understand is why people put up with these kind of things, which are obviously against their interest.

Everyone thinks they're special(because we're all told that in the US for our entire childhood), and will be rich, so they see it as voting against their future interests to oppose it.

> they are rumored to be buying up real estate en masse, with the strategy of forcing everyone to become renters.

More conspiracy theory then rumor. I haven't seen much evidence other than reddit posts and a small amount of purchasing by private equity in hot markets to counter inflation.

I wonder if a small amount of investor increase makes a big impact.

Traditionally the housing market is one-bought, one-sold, plus a small amount of growth. Probably less than 3% type thing from population covered by new builds.

If you throw in funds/investors increasingly into this market, even if they are taking ~10% of the stock that has a huge impact on the 'one-bought, one-sold' part of the equation. Now there are more much more buyers than sellers creating competition on an extremely emotional purchase in an enviroment where people have access to greater amounts of borrowing that historically normal.

Obviously there's a huge number of variables here and agree hedge funds are buying everything seems rumour more than fact but I think a small increase could be responsible for a disproportional large effect. at least as one part of the equation.

This stuff always makes me thing of some saying along the lines of 'housing market can be good for residents or good for investors, the government must choose which one.'

From what I've heard, it sounds like homes are actually selling over these Zestimates still.

Also, comparing the zestimate for our house to what other homes are actually selling for are pretty comparable. I think what you're saying might be true for some markets, but I don't think it's deliberate. Zillow's been around for a while, and those Zestimates didn't used to be anywhere near as high as they jumped this past year.

Also, the Zestimates actually seemed to be a lagging indicator for last year, like they went up more slowly than the sold house prices (I was watching mine 2-3 times a month out of curiosity, although that's just one anecdote).

My next door neighbor sold right after I moved in.

Listed for $475k, Zestimate at $515k, sold for $555k. Markets crazy right now.

I don't think so. In Canada (e.g. Toronto), we don't have proper access to pricing data for houses (some kind of real-estate agent monopoly but I don't fully understand it). That lack of pricing data makes things worse.

I just bought a house. The estimates are below market value. I placed offers on 6 properties and none of them closed below list. The listing price is the starting bid price.

Locally, houses are selling on average about 10% over list.

Of the problems in housing prices, I really doubt Zillow is changing anything. Everyone knows the listing prices are garbage, and only work off closing price for comps. The issue is closing dates are 30-60 days behind the current market, which is a long time.

It's essentially impossible to know what a fair offer is today.

I've looked at zillow a fair amount over the years* and they are always consistently higher than actual sales data. I don't think based on my own observations that they are causing anything. They are 1 site and the vast majority of transactions are between people.

* It can be fun to revisit places you lived/stayed at and see what changed, if its been listed in the last decade. Kinda like a before/after on home improvement shows with your memory being the before.

My house has gone up 28% in the past year and grew only a bit slower the prior year. Contrary to what everybody on west coast yells emotionally it has nothing to do with shortages, actually it’s the opposite.

In my past experience on HN this subject tends to become exceedingly emotional very quickly. Please do not reply to me about high economics with 0 data.

I live in the third fastest growing large city in the US. It has doubled in population over the past 20 years and may become one of the US 10 largest cities over the next decade. There is plenty of room to expand here with constant construction and no geographic or political boundaries. Property prices seem to increase proportionally to the increase of housing quantity as though increased quantity is fueling increased demand. Multi tenant properties only seem to pop up here once an area becomes to saturated with single family residences leaving higher density units as the only remaining option.

Despite there being very low financial barriers to becoming a home owner here it seems an incredibly high quantity of single family homes are rentals.

Software-aided humans. The market is optimized to lazy investors and idealists right now. Hopefully they lose buckets of money and abandon their hustles and the rest of us can buy homes soon.

I think the zestimate for my house would be probably 10% over what I think a high asking price would be. That would be over a 50% increase in 6 years.

Houses are selling for more than asking all over the Western world.

In many places you can offer the asking price and will be rejected as the seller is expecting more.

The customers for Zillow are the realtors themselves (and not buyers or speculators).

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