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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 somewhe

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.
- ryan_lane 4y ago
  You're comparing the rental occupancy rate for the entire country to a specific market? That doesn't make any sense. SF (and another of other cities) is in a housing market crisis, whereas detroit (and another of other cities) has extremely high amounts of vacancy. Obviously you have to consider this market by market. This product is being used to maximize revenue in specific markets, by telling landlords to hold apartments vacant by listing them at higher than market prices. By doing that across the market, they artificially increase scarcity, which forces people to rent those apartments at inflated prices. That's collusion by proxy, because you have a single actor that's coordinating actions. It's collusion because all of these companies are sharing their private pricing data with a central entity, who's using that private data to provide coordinated actions.
  - pandaman 4y ago
    Seeing how the market is not specified in the article it's rational to compare to the the national average. But if you have the data for the market where the unnamed company from the article operates I am all ears. Your claim was that 95% "is quite low" even though it's higher than the national average. > By doing that across the market, they artificially increase scarcity, which forces people to rent those apartments at inflated prices. Yes, this is how the product works, it tells the price that will maximize the revenue. >That's collusion by proxy There is no such thing. If the agreement on prices exists then it's just collusion, if it does not - there is no collusion. Price fixing, which I suppose you mean by collusion is outlawed. Following market trends is not. The agreement on prices is the key element, without it there is no collusion. Nobody is coordinating anything, there is no agreement to set prices according to the marketing data. This is why stock advisors, appraisers, reports and any other pricing sources are not "collusion by proxy" since they are missing the collusion per se.
    - ryan_lane 4y ago
      > Seeing how the market is not specified in the article it's rational to compare to the the national average. But if you have the data for the market where the unnamed company from the article operates I am all ears. Your claim was that 95% "is quite low" even though it's higher than the national average. The national average is going to be lower than cities with housing crisis, because the country is large, and it's skewed by areas that are effectively ghost towns. My friends in New Orleans have had a 100% occupancy rate since the last major hurricane. > There is no such thing. If the agreement on prices exists then it's just collusion, if it does not - there is no collusion. Price fixing, which I suppose you mean by collusion is outlawed. Following market trends is not. The agreement on prices is the key element, without it there is no collusion. Nobody is coordinating anything, there is no agreement to set prices according to the marketing data. This is why stock advisors, appraisers, reports and any other pricing sources are not "collusion by proxy" since they are missing the collusion per se. I'm assuming you don't have a real estate license, because there are specific national laws (and often stricter state-level laws) related to collusion, and they differ and are considerably stricter than price fixing laws.

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.

ryan_lane 4y ago
You're comparing the rental occupancy rate for the entire country to a specific market? That doesn't make any sense. SF (and another of other cities) is in a housing market crisis, whereas detroit (and another of other cities) has extremely high amounts of vacancy. Obviously you have to consider this market by market. This product is being used to maximize revenue in specific markets, by telling landlords to hold apartments vacant by listing them at higher than market prices. By doing that across the market, they artificially increase scarcity, which forces people to rent those apartments at inflated prices. That's collusion by proxy, because you have a single actor that's coordinating actions. It's collusion because all of these companies are sharing their private pricing data with a central entity, who's using that private data to provide coordinated actions.
- pandaman 4y ago
  Seeing how the market is not specified in the article it's rational to compare to the the national average. But if you have the data for the market where the unnamed company from the article operates I am all ears. Your claim was that 95% "is quite low" even though it's higher than the national average. > By doing that across the market, they artificially increase scarcity, which forces people to rent those apartments at inflated prices. Yes, this is how the product works, it tells the price that will maximize the revenue. >That's collusion by proxy There is no such thing. If the agreement on prices exists then it's just collusion, if it does not - there is no collusion. Price fixing, which I suppose you mean by collusion is outlawed. Following market trends is not. The agreement on prices is the key element, without it there is no collusion. Nobody is coordinating anything, there is no agreement to set prices according to the marketing data. This is why stock advisors, appraisers, reports and any other pricing sources are not "collusion by proxy" since they are missing the collusion per se.
  - ryan_lane 4y ago
    > Seeing how the market is not specified in the article it's rational to compare to the the national average. But if you have the data for the market where the unnamed company from the article operates I am all ears. Your claim was that 95% "is quite low" even though it's higher than the national average. The national average is going to be lower than cities with housing crisis, because the country is large, and it's skewed by areas that are effectively ghost towns. My friends in New Orleans have had a 100% occupancy rate since the last major hurricane. > There is no such thing. If the agreement on prices exists then it's just collusion, if it does not - there is no collusion. Price fixing, which I suppose you mean by collusion is outlawed. Following market trends is not. The agreement on prices is the key element, without it there is no collusion. Nobody is coordinating anything, there is no agreement to set prices according to the marketing data. This is why stock advisors, appraisers, reports and any other pricing sources are not "collusion by proxy" since they are missing the collusion per se. I'm assuming you don't have a real estate license, because there are specific national laws (and often stricter state-level laws) related to collusion, and they differ and are considerably stricter than price fixing laws.