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But see, the thing about flipped houses is that the people who own them don't actually want them. They want to sell them. For as much as they can get, sure, b

But see, the thing about flipped houses is that the people who own them don't actually want them. They want to sell them. For as much as they can get, sure, but also to sell them in a timely fashion. So I don't see flippers as being the big deterrent to prices falling. If they haven't caved yet, they will in a few months. > If you were to bring down the value of every single-family home in the US, that means accepting about 2/3rds the value of each of these mortgages, along with all of the securitized derivatives of them. That's a 2007-2009-level crash, which the banks just won't tolerate. And how, specifically, do you think the banks are preventing this? Not just "it's a conspiracy - we all know it". OK, maybe so. What's the mechanism?

lenerdenator 3y ago
They want to sell them _at a profit_ and if the market doesn't cool enough, they'll be able to do that no matter what, at the expense of the future economic activity of the people who can afford it. As for the second point, simple. They just refuse to renegotiate loans. Same as 2007-2009. They've gotten far pickier about who it is they loan out to, too, so it's less likely to result in the foreclosure of the home than it was during that time period. The flip side of that is that there's a shrinking pool of families that can afford to take that sort of cost on.