3 ms·
Not really, it's only a tiny fraction of purchasers. Their market power during purchase time is not enough to drive down prices and benefit them, and post purch
by epistasis 3y ago
Not really, it's only a tiny fraction of purchasers. Their market power during purchase time is not enough to drive down prices and benefit them, and post purchase they do not own enough fraction of existing homes to help drive up sale prices.
Unless they are systematically paying above market, which is what Zillow did (for a tiny tiny number of homes, relative to supply). Which would be a transfer of wealth from Private Equity to individual home buyers.
Housing is one of the least centralized markets that we have, and even when ownership is highly concentrated in a market, it's very rare that pricing can be controlled by an entity. Even the widely publicized "pricing software" for rentals was just better at showing comparable apartments with less work, enabling price discovery. It didn't enable price collusion.
The shortage of housing and resulting high prices are best understood (IMHO) through class politics, where class is defined as already owning a housing asset or not.
- someguydave 3y agoThe centralisation in real estate is on the gov-backed mortgage side. We should end the thirty year mortgage and require home owners to purchase debt in the private market.
- epistasis 3y agoI am so glad to hear somebody proposing this! I support these ideas 100%, though I had not been bold enough to say it before. Ending the mortgage interest tax deduction would also be a good move. It does nothing but subsidize larger mortgages and asset price inflation.
- thfuran 3y agoI think these are probably good ideas but terrible first moves. We need to build a lot more housing before doing things that'll make a lot of people a lot less able to afford the houses they already own or purchase other housing.