> Nor will sellers agree to $2 just because there aren't other buyers. But that's what the house is worth. As the saying goes, something is only worth what som

> Nor will sellers agree to $2 just because there aren't other buyers. But that's what the house is worth. As the saying goes, something is only worth what someone will pay for it, and $2 is the only possible offer here, given the hypothetical scenario. Absolutely someone will give in to the $2 offer eventually. People pass on. The estate isn't going to leave the property just sitting there paying $6k per year doing nothing, when, again, it is only worth $2. It is not worth $1M in this hypothetical scenario. I don't know where you dreamed up that idea. Given the conditions of the hypothetical, there is literally only one buyer, and that buyer is only paying $2. It's a $2 house no matter how you slice it. Again, it's other buyers willing to pay more that push you to pay more. > But the overlap between home buyers in Toronto and tech investors who do seed rounds in Silicon Valley is very small, especially for entry level homes. A few things: 1. Even just one party losing interest in buying a house who has decided to reallocate the funds to a different investment can start to change the dynamic. This idea that every homebuyer needs to consider investing in something else is unfounded. 2. There are knock on effects when someone provides seed funding. Maybe they sold their stocks in Coca Cola to cover the seed, for example. That opens a vacuum that someone else needed to fill – can't sell Coca Cola stock to nobody. Eventually the money is going to be drawn away from housing given the change in allocation, even if through many layers of indirection. 3. The money also isn't leaving necessarily because of investment. There is also an outflow on the consumer side. Tech wasn't showing promise because nobody wanted anything to do with it... If you were prepared to spend every last dime you have on your house to buy into a market you otherwise couldn't afford, but then Jobs just announced that "one more thing", that shiny new iPhone is beyond your grasp. But you want it! It's so cool. So now what you are willing to spend on a house has been reduced, and when you make an offer it isn't going to come in as high. Multiply that out across many players and soon there is a lot less interest in keeping the prices high.