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It gets even weirder sometimes based on how properties are leveraged. It's sometimes why you see places stay vacant for long stretches at high prices rather tha
by im_down_w_otp 5y ago
It gets even weirder sometimes based on how properties are leveraged. It's sometimes why you see places stay vacant for long stretches at high prices rather than rented or leased at lower prices just to generate some revenue.
If an owner/developer has their properties as backing collateral, and they recognize revenue on the books at significantly less than the projections/models of the property value that's been collateralized, then a whole weird cascade of things can kick in. Like statutory insolvency, etc. So, in certain circumstances and certain markets there's a very, VERY strong local incentive not to adjust prices down in the short term.
- ericmay 5y agoI agree. I think too often people just think about simple supply and demand but the reality is much more nuanced than that. You even provided another good example and to add to it, that may also exist in the long term depending on the situation and time horizon. It seems to me that there is a breakdown in price elasticity. -edit- Sorry to see cowards downvoting you without even commenting. Idk what you said that was so worthy of that. Sucks it's hard to even have a speculative conversation without "this doesn't fit my worldview click".