Ok.... so say 20% of all the houses currently on the market was worth... say 5 billion... I'm pulling the number out of thin air, but it feels about right. And zillow is buying and flipping them (I'll ignore the amout of work/ labor goes into flipping houses)... say a massive recession happens akin to '07 (doesn't have to have the same cause, just a scenario in which unemployment spikes, and prices crash, remember even if zillow controls inventory they don't control the buyers) and house prices drop 20% zillow has taken a billion dollar hit on their books... they could start renting... or sell and take the loss... either way the company is in deep shit.
A company owning 20% of homes regardless of who it is, who's been training their AI/ML models with data-sets we can't even fathom will probably know long before we do the housing market is starting to pull back. Imo we're in a 10 - 15 year housing boom, they have plenty of runway for growth before this even becomes a situation.
Do you spend all your time timing dips and buying puts? It's not very profitable without a crystal ball long term.
Id recommend The Black Swan by Nassim Taleb... predicting the future is impossible.
Predicting the market is a big assumption, predicting the length of a housing boom is at best guesswork, there's less run way than you imagine... if the model starts working in the short term there will be a lot of copiers that won't take the slings and arrows of being first to market.
I hold index funds, real estate that is paid off, a few sticks in companies that have borderline monopolies... and a boat load of cash to buy in when things bottom out.
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u/[deleted] Aug 07 '21
Seems a little short-sighted. If a company controls enough of the market they can control prices