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People have a lot of home equity because of prices taking off. I expect most of the cash in these offers is from equity in the buyer’s previous homes. It only t
by closeparen 5y ago
People have a lot of home equity because of prices taking off. I expect most of the cash in these offers is from equity in the buyer’s previous homes. It only takes little money injected from outside the real estate system to cause a bunch of these transactions between incumbent owners.
Houses are thought to be worth X. One house is available and one labor-rich renter buys it for 2X. This is now the market price of a comparable house. Two houses are available and their owners swap. This is a cash transaction at the same 2X price.
- chii 5y agoThe missing factor for real estate is that a lot of regulation and red tape is preventing new builds from coming online (and not just from NIMBYs but other factors related to lack of labour, materials etc). at 2x the price, you'd imagine supply would grow to meet the demand. And yet, something (that i do not know) is causing the supply to not grow as expected.