4 ms·

No I think empty inventory is deplorable when so many are homeless or being price gouged on money increasingly needed for food and meds.

pandaman 4y ago
It's not "empty inventory" it's just inventory. Rental market deals in empty apartments, nobody rents apartments with tenants inside. If there had not been empty apartments nobody would be able to move and any freed apartment would be snatched at much higher price than you observe now. Even when the inventory simply drops (the number of empty rentals decreases but still above zero) you see things like dozens of people on the same showing, forced to apply immediately.
- ryan_lane 4y ago
  Most cities don't count apartments that are vacant less than x months as a vacancy, specifically because of what you're describing. Yes, apartments need to be empty, and folks move out and new folks move in, that usually happens within a couple months of the units being vacant. Some percentage of vacancy is also a healthy stat for a city, because it shows they're keeping up with growth. The issue here is that there are units being held as vacant for long periods of time, in a saturated market, to drive prices up, and a central algorithm is being used by a large percentage of the market, that allows them to do this in a coordinated manner. This is effectively textbook collusion, obfuscated by technology. People should be losing their real estate licenses over this, and honestly, folks should be reporting any company using this service to the real estate commission in their state for collusion, because this is normally something real estate commissions take seriously.
  - pandaman 4y ago
    >The issue here is that there are units being held as vacant for long periods of time Can you define the "long period" or point somewhere in the article or other source where this is described? >This is effectively textbook collusion, obfuscated by technology. I probably did not read the same text books you read. Do the house sellers who hire the same appraiser also collude in your text book? What about people who use Zillow's or Redfin estimates?
    - ryan_lane 4y ago
      To give some context, I was a real estate agent in Louisiana, working as a property manager, for some time. > Can you define the "long period" or point somewhere in the article or other source where this is described? The article mentions that landlords are using the software to run at lower occupancy rates to increase revenue. One specific landlord was mentioning an occupancy rate as low as 95% on 50,000 units (which is quite low). Landlords don't base occupancy rates on short-term vacancies. > I probably did not read the same text books you read. The article describes a service that takes private pricing data from numerous competitors, then gives all the competitors pricing and occupancy recommendations as a means of maximizing revenue. There's a good quote in the article about replacing the word algorithm, with a "guy named Bob". If a person was doing this, it would obviously be collusion, because it's a practice that is already illegal, essentially everywhere. In real estate school, they were pretty explicit about not even walking the edges of collusion; for instance, simply saying "we only price our commissions at 3%" in a room with other brokers could be considered collusion. > Do the house sellers who hire the same appraiser also collude in your text book? What about people who use Zillow's or Redfin estimates? An appraiser sets prices based on factors like recent sales in the neighborhood of similar properties and property sizes, age/condition of the house, etc. Everyone can use the same appraiser because that appraiser isn't doing any coordination across the sellers. Two different appraisers, for the most point, should be setting very similar prices. It could very well be collusion is every broker was using Zillow or Redfins estimate's, especially if they were giving recommendations on holding properties off the market in a coordinated way to maximize profits.
      - pandaman 4y ago
        According to this https://fred.stlouisfed.org/series/RRVRUSQ156N https://fred.stlouisfed.org/series/RRVRUSQ156N the rental occupancy rate has never been over 95% since 1960, which makes me doubt everything you say afterwards. At best you believe your local market is representative of the whole country. Also "collusion" as you were taught is wrong, there is literally no collusion here. Collusion requires agreement, only agreement here is between a market research firm and a landlord.

pandaman 4y ago

It's not "empty inventory" it's just inventory. Rental market deals in empty apartments, nobody rents apartments with tenants inside. If there had not been empty apartments nobody would be able to move and any freed apartment would be snatched at much higher price than you observe now. Even when the inventory simply drops (the number of empty rentals decreases but still above zero) you see things like dozens of people on the same showing, forced to apply immediately.

ryan_lane 4y ago
Most cities don't count apartments that are vacant less than x months as a vacancy, specifically because of what you're describing. Yes, apartments need to be empty, and folks move out and new folks move in, that usually happens within a couple months of the units being vacant. Some percentage of vacancy is also a healthy stat for a city, because it shows they're keeping up with growth. The issue here is that there are units being held as vacant for long periods of time, in a saturated market, to drive prices up, and a central algorithm is being used by a large percentage of the market, that allows them to do this in a coordinated manner. This is effectively textbook collusion, obfuscated by technology. People should be losing their real estate licenses over this, and honestly, folks should be reporting any company using this service to the real estate commission in their state for collusion, because this is normally something real estate commissions take seriously.
- pandaman 4y ago
  >The issue here is that there are units being held as vacant for long periods of time Can you define the "long period" or point somewhere in the article or other source where this is described? >This is effectively textbook collusion, obfuscated by technology. I probably did not read the same text books you read. Do the house sellers who hire the same appraiser also collude in your text book? What about people who use Zillow's or Redfin estimates?
  - ryan_lane 4y ago
    To give some context, I was a real estate agent in Louisiana, working as a property manager, for some time. > Can you define the "long period" or point somewhere in the article or other source where this is described? The article mentions that landlords are using the software to run at lower occupancy rates to increase revenue. One specific landlord was mentioning an occupancy rate as low as 95% on 50,000 units (which is quite low). Landlords don't base occupancy rates on short-term vacancies. > I probably did not read the same text books you read. The article describes a service that takes private pricing data from numerous competitors, then gives all the competitors pricing and occupancy recommendations as a means of maximizing revenue. There's a good quote in the article about replacing the word algorithm, with a "guy named Bob". If a person was doing this, it would obviously be collusion, because it's a practice that is already illegal, essentially everywhere. In real estate school, they were pretty explicit about not even walking the edges of collusion; for instance, simply saying "we only price our commissions at 3%" in a room with other brokers could be considered collusion. > Do the house sellers who hire the same appraiser also collude in your text book? What about people who use Zillow's or Redfin estimates? An appraiser sets prices based on factors like recent sales in the neighborhood of similar properties and property sizes, age/condition of the house, etc. Everyone can use the same appraiser because that appraiser isn't doing any coordination across the sellers. Two different appraisers, for the most point, should be setting very similar prices. It could very well be collusion is every broker was using Zillow or Redfins estimate's, especially if they were giving recommendations on holding properties off the market in a coordinated way to maximize profits.
    - pandaman 4y ago
      According to this https://fred.stlouisfed.org/series/RRVRUSQ156N https://fred.stlouisfed.org/series/RRVRUSQ156N the rental occupancy rate has never been over 95% since 1960, which makes me doubt everything you say afterwards. At best you believe your local market is representative of the whole country. Also "collusion" as you were taught is wrong, there is literally no collusion here. Collusion requires agreement, only agreement here is between a market research firm and a landlord.