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Everyone has an agenda but be especially careful of real estate as an economic barometer. There’s so much speculation going on that the level of distortion can
by resfirestar 7y ago
Everyone has an agenda but be especially careful of real estate as an economic barometer. There’s so much speculation going on that the level of distortion can often seem criminal in retrospect. A recent example: Manhattan developers seem to be keeping thousands of new, unsold condos off the market. I don’t think it’s difficult to imagine why. https://www.bloomberg.com/news/articles/2020-01-06/manhattan-s-flood-of-new-condos-could-take-six-years-to-sell https://www.bloomberg.com/news/articles/2020-01-06/manhattan...
- AdrianB1 7y agoIt is extremely simple to see why: flooding the market will lower the prices and reduce the profits, waiting and selling at high price can be more profitable, it's a simple math comparison between the options.
- majos 7y agoRe: unsold condos, anyone want to try explaining how withholding stock makes sense? I understand flooding the market would depress prices further, but I don’t understand what market would buy up all this stock. If these units can’t sell in what seems to be a nicely growing market, isn’t it going to be a long time before they sell at all? Like, so long that just sitting on them and paying taxes doesn’t make sense?
- swagasaurus-rex 7y agoThe calculation: Prices will skyrocket from lack of supply more quickly than the taxes paid on the units. Development and renting it out locks you into contracts where you can't flip as quickly (low liquidity). So you don't develop or use the land, just wait for your investment to accrue.