How Zillow's homebuying scheme lost $881M
The scary thing is that it&#x27;s easy to see how something how like this could drive a market boom and bust cycle. I&#x27;m imagining a scenario where two iBuyer companies try to outbid each other algorithmically, driving the prices further and further out of reach of people who are looking for a primary home.<p>Tangentially related, I talked to a friend who works on geospatial data for one of the big vacation rental companies, and he was remarking how many homes in many desirable areas are now rentals. It&#x27;s not that uncommon to see nearly entire neighborhoods converted to short term rentals now in some areas where they&#x27;re still legal. Hearing that really depressed me.<p>We often talk about automation in terms of replacing various types of labor, but I&#x27;ve become really interested in automation creating adverse market incentives for smaller market participants because that&#x27;s exactly what buying real estate right now feels like.<p>It&#x27;s honestly quite scary how I&#x27;m in the top 2% of income earners in my generation and yet I could barely afford to buy a small place in a semi-desirable area.   I can easily see myself not being able to compete in algorithmically dominated markets flush with venture cash in the future and I earn more than just about everybody I know today.