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No, this is not how markets function. The increase in "comps" is merely the reflection of changing underlying supply/demand imbalance. These types of liquidity
by qeternity 4y ago
No, this is not how markets function. The increase in "comps" is merely the reflection of changing underlying supply/demand imbalance. These types of liquidity shocks are mean reverting if not fundamentally sound.
Again, I didn't say investors don't impact pricing...I said they are a symptom.
- chiefalchemist 4y agoOne home is not a market. My point is, an able and willing investor(s) can be more willing to "go big". That in turn alters perception - as nudged by agents - and prices "naturally" creep up. One sale is not impacting supply/demand that significantly. Investors have different motives, and those motives are often self-fulfilling.
- qeternity 4y agoPeople say things like this without actually tying it to a conclusion or walking it to its logical endpoint. Ok, an investor can be more willing to "go big"...whatever that means, but presuming it means to bid more aggressively, so what? Self-fulfilling motives? What does this even mean? You've said a lot of hand-wavy things without actually arguing how any of this results in mispricing.
- ashwagary 4y agohttps://news.ycombinator.com/context?id=33298446 https://news.ycombinator.com/context?id=33298446
- chiefalchemist 4y agoIt means they have deeper pockets and can hyper-affect price because of comps. Self-fulfilling means that they have enough "positions" to raise prices and pull up the value of their portfolio value as they do so. You know...the things everyday Joe & Jane can't do. Am I hand waving or are you too slow to figure out the nature of the game? It's not rocket science. To equate institutional investment outfits with solo families is naive. No one should have to explain that here.