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It’s not just “rich people,” it’s “wealth.” Speculation in there housing market is a widely accepted contributor to rising housing prices: https://www.princeton
by sanedigital 6y ago
It’s not just “rich people,” it’s “wealth.” Speculation in there housing market is a widely accepted contributor to rising housing prices: https://www.princeton.edu/~wxiong/papers/Speculation.pdf https://www.princeton.edu/~wxiong/papers/Speculation.pdf
- McScroogy 6y agoIt is a leftist, anti-capitalist theory, and there are many leftists. In that sense, it may be widely accepted. Ultimately, speculators only try to guess at future prices. Even when hording occurs to manipulate prices, that is usually temporary, as keeping the asset off the market also has a cost. Maybe prices rose a little faster with speculators than without them. But high prices should lead to more building (like if you have land ready for building, there will usually be a price point that tips you over to "OK let's build"). If it doesn't, odds are something else is going on. I'll take a close look at the paper, but at first glance it also only says "speculation could be a contributor to housing prices".
- sanedigital 6y agoIt’s the second sentence on the page: “We find that housing speculation, anchored, in part, on extrapolation of past housing price changes, led not only to greater price increases and more housing construction during the boom in 2004 to 2006, but also to more severe economic downturns during the subsequent bust in 2007 to 2009.”