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I agree w/ you. Anecdotally but the most common argument I heard was "5-10% can't drive the huge price increases we're seeing". My counter was always that comp
by kareemm 6y ago
I agree w/ you. Anecdotally but the most common argument I heard was "5-10% can't drive the huge price increases we're seeing". My counter was always that comps drive market pricing. It doesn't take very many sales well over asking to inflate a market, esp when the supply of capital is large, not local, and being laundered.
- lotsofpulp 6y agoIt’s more accurate to say it’s the huge supply of capital looking for somewhere to be parked that is driving prices higher. Demand curve is number of houses available for sale, supply curve is people looking to purchase those homes. As the curves shift, if the price goes too high, then the lack of supply of people with sufficient money would cause prices to stall or come down. But it’s apparent that the supply of people with a lot of money (or credit) is a lot higher than the supply of houses. Maybe it’s even more accurate to say that the supply of inflation protected assets in stable societies is in low supply compared to the supply of capital trying to buy those assets.