The Hot Property That’s Next on Tech’s Agenda: Real Estate

Nice to know that the process of making homes unaffordable to all is being facilitated by venture capitalists. House-flipping: buy, hold, sell... Real estate is all about churn, artificially propping up ever rising pricing betting on more scarcity and more investment money. Everybody gets rich... on who? The unentitled youth and poor who will never have the inheritance, or the insurmountable requirement of cash to stop treading rent water, or smothered by mortgage penury and unaffordable property taxes for their lifetimes. Investors, money laundering, and foreign cash expatriation, creating a home shortage driving the Millennials into forever rental slavery to the wealthy landowning class or to banks. Wake up America. All those who watch those cute little films on PBS about the Queen's garden, know that aside from the money they get from taxing the Britons, they own huge swaths of real estate and live royally off the rents. Landowners: cocooned in walled off estates forever live off others sweat. There are those who own land, mostly inherited, and those who support them for endless generations. Feudalism in capitalist clothing. Wonder where the middle class went? Look no further. Your children are condemned to a life of rent and debt servitude. It starts with crushing student loans and steps up to housing. Thank you Silicon Valley.

somehow someone will find the real estate equivalent of credit derivatives in all this and the frenzy at the trough will begin. if it hasn't already. of course this time it will be different. sure it will.

Corporate flipping of residential real estate is *exactly* the kind of business that should be outlawed. It amounts to nothing more than front running and skimming off a market where individuals are going to be at an extreme disadvantage while having no where else to turn if they actually want to own a home. I imagine they'll be right there to buy up market inventory during the next financial crash after tens of thousands of families have lost their homes. What a totally parasitic business model.

This is a total bubble waiting to pop. These valuations hv no basis in facts. Of course, it's working in the South--home of the 2008 Financial Crisis.

“The thing that cannot be automated is this notion of advice — what neighborhood, what school district, how much you can afford,” he said. “It’s important to have someone who is an expert alongside you.” Clearly Mr. Wu's greatest asset is his ability to keep an (almost) straight face while saying things like this. He's touting the value of the internet at the same time he's pretending it doesn't exist. But he knows his audience: some sub-set of starry-eyed realtors may be distracted by this slop while he cuts into their lunch-line. Meanwhile anyone who wants to undercut him on fees needs to be able to run a billion-dollar 90-day float, unlike a realtor, who has no skin in the game.

More house-flippers… just what we need! I can't help but wonder how this will help to expedite the displacement of low-income and moderate-income renters, which has reached crisis proportions in my area.

Wow, I think i we've seen the next big sector to short. These companies officially call the top of the real estate market.

The thing about real estate transactions that is most in need of "disruption" is the outrageous 5-6% fees that Realtors impose. Existing tech companies like Redfin are attempting to cut this fee; I don't know how well it is working out but I applaud the effort. This Opendoor company the NYT chose to profile? It charges 6.5%! That sounds to me like a clear step backwards. The central problem for ordinary people buying and selling homes is not inconvenience, it's the outrageous size of the realtor fees.

The listing agent usually gets a 3% commission; the buyer's agent commands an additional 3%. Now, however, sellers are realizing they can avoid some or all of those high fees. There are a slew of FISBO (for sale by owner) discount brokers around the U.S. who will place your home listing on the local MLS for 1%. They also provide a menu of additional as-needed services on a graduating fee basis. However, the tricky part happens when a buyer's broker wants their 3%. Then your choice is clear, wait for a direct buyer or pay 3% to a buyer's broker who brings you a buyer. A sense of urgency is the only reason I would choose to pay Opendoor a 6.5% fee for what would surely be a lowball offer.

Great. Technology that makes “ flipping” more profitable. Encouraging a process whereby wealthy speculators buy up reasonably priced properties, make no improvements, and re-sell at a higher price to people who have trouble affording their subsequent mortgage payments.

The exact opposite has been happening in Canada. Tired of paying 5-6%+tax of a listing price to realtors, discount and online brokerages are unbundling their services. For those who know what they want and are willing to share some of the realtor's risks, it makes sense that it should cost less. For those that need to get out quickly, a service like Opendoor makes sense, but for most sellers, paying 6.5% of a "market price" for your home sounds a bit steep.

"Opendoor buys only homes built in 1960 or later, worth $175,000 to $500,000 and not in need of major renovations or repairs." These are the very houses most desirable to those entering/on the low side of the market. Will they remain "affordable" if most are scooped up by these now tech companies? Will this not exacerbate, rather than alleviate, the US housing problem? Thank you. Harriet

The last line says it all...kissing up to realtors by telling them they are experts while you take away their life blood. Realtor is probably one of the last jobs in the U.S. that someone with no skills and minimal intelligence can use to propel themselves up by a tax bracket or three. The only reason they still exist is because of government lobbying to protect lock-box information like the MLS listings. Still, with Zillow and web-available documents just about anyone can sell their own house with a minimum of effort and recoup the outrageous 5% fee that "real estate professionals" charge for a few hours of work. Another middle class job eliminated by tech and venture capital, but in this case it's one that deserved elimination long ago.

“Also eliminates the need for a real estate agent.” Fantastic. Realtors have been scooping ill gotten gains, in the form of hefty commissions since time began. An industry in need of disruption for the good of the consumer.