3 ms·

Leveraged asset buyers have an influence when inventory is so low.

• epistasis 5y ago
  Agreed, but the fundamental problem is that inventory is so low. Super low inventory and vacancy rates cause far more problems in addition to prices being set by a wealthier percentile.
  • flyinglizard 5y ago
    Ironically the inventory would have been higher if more rich people invested in real estate projects, instead of stocks and bonds.
    • epistasis 5y ago
      I don't think the bottleneck for new housing is investment capital, it's mostly about getting permitted to build, and also getting enough labor. There's a fairly big shortage in the trades, as the boom-bust-cycle has forced more experienced people out, and there hasn't been many new people getting trained. Also, a lot of the opportunity for large scale projects is gone; building a large tract of homes in the Bay Area means building super-exurban in places like Tracy. Projects like the Vallco mall replacement in Cupertino take a decade+, and what ends up getting permitted will not usually look anything like the initial plans, or what's technically allowed by law. (This is changing slightly in California in that by adding enough below-market-rate deed restricted units, you can build according to code and zoning without greedy neighbors vetoing the project. )