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> Housing prices in my area have inflated 25% in the past year - one year - and real estate companies like Zillow immediately buying up everything on the market

> Housing prices in my area have inflated 25% in the past year - one year - and real estate companies like Zillow immediately buying up everything on the market is a primary contributor. No it isn't. Real estate companies buying up homes literally rounds to 0% of the market. Reflexively blaming everything on evil big corporations is an intellectually lazy copout. Housing prices are up because of nimby politics that prevent new construction and collapsing interest rates. Zillow is a trivial insignificant minnow has absolutely no impact on broader market. Even if Zillow were large enough to move the market, all they are doing is flipping houses, not hoarding them, so they have zero net impact on supply and demand (every buy is paired with a sell).

bink 5y ago
IMHO blaming the price increases in nimbyism is equally lazy. There are plenty of places in the US with no shortage of land and no harsh zoning restrictions that are still seeing huge increases in housing prices. I think your second factor plays a much larger role. Interest rates are well below where they should be and the government will buy up just about any conforming mortgage. The cost of raw materials plays a role as well, but smaller.
- AlexandrB 5y ago
  Every HN discussion about home prices attracts a vocal group of people blaming everything on NIMBYism (regardless of jurisdiction) and lecturing about supply and demand. It seems inconceivable to them that converting single-family homes to long-term rentals or AirBnB pads also reduces supply and pushes home values up.
gzer0 5y ago
A large portion of homes are being bought and listed as rental properties. And whilst the overwhelming majority are purchased by individual investors, a non-negligible amount is via LLCs, LLPs, and corporations. This has the same effect of complete removal from the supply-side as the home is no longer considered part of the 'for-sale' pool. This leads to artificially inflated prices for homes that are actually for sale, since rental properties are removed from that pool.
- indymike 5y ago
  >And whilst the overwhelming majority are purchased by individual investors, a non-negligible amount is via LLCs, LLPs, and corporations. Most of those LLCs and LLPs will be smaller investors. I would not think of buying a rental an not using an LLC - even if it would be for just one rental. I'm not sure the kind of entity that owns a property matters all that much. For $150 plus a little extra paperwork, a LLC really does de-risk the rental business.

bink 5y ago

IMHO blaming the price increases in nimbyism is equally lazy. There are plenty of places in the US with no shortage of land and no harsh zoning restrictions that are still seeing huge increases in housing prices. I think your second factor plays a much larger role. Interest rates are well below where they should be and the government will buy up just about any conforming mortgage. The cost of raw materials plays a role as well, but smaller.

AlexandrB 5y ago
Every HN discussion about home prices attracts a vocal group of people blaming everything on NIMBYism (regardless of jurisdiction) and lecturing about supply and demand. It seems inconceivable to them that converting single-family homes to long-term rentals or AirBnB pads also reduces supply and pushes home values up.

gzer0 5y ago

A large portion of homes are being bought and listed as rental properties. And whilst the overwhelming majority are purchased by individual investors, a non-negligible amount is via LLCs, LLPs, and corporations. This has the same effect of complete removal from the supply-side as the home is no longer considered part of the 'for-sale' pool. This leads to artificially inflated prices for homes that are actually for sale, since rental properties are removed from that pool.

indymike 5y ago
>And whilst the overwhelming majority are purchased by individual investors, a non-negligible amount is via LLCs, LLPs, and corporations. Most of those LLCs and LLPs will be smaller investors. I would not think of buying a rental an not using an LLC - even if it would be for just one rental. I'm not sure the kind of entity that owns a property matters all that much. For $150 plus a little extra paperwork, a LLC really does de-risk the rental business.