3 ms·
Interesting game theory situation: - if land value depends on the community that was there, then owners would all have incentive to rebuild their burnt down ho
by behnamoh 2y ago
Interesting game theory situation:
- if land value depends on the community that was there, then owners would all have incentive to rebuild their burnt down houses to regain the values.
- but owners probably realize most owners will sell their property as soon as things are back to normal. that would reduce the value of surrounding houses.
- so owners will rebuild as fast as possible, probably cutting lots of corners, just so they won't left behind to sell.
- some people start selling their houses but the late comers realize it's not worth it for them to sell it because the value has dropped a lot. so they stay.
- the new owners move in to the area and house prices go back up.
- kleinsch 2y agoDisagree with logic that most will sell. Many people will incur high tax bills (if the property appreciated) or transaction costs to move. People who bought in the 2010s have mortgage rates that don’t exist anymore. Many had a reason to live in the area to begin with. - Many will rebuild to move back - Some will sell their lots to investors - Some will rebuild using insurance money to flip upon completion