3 ms·

Lets say a transaction has 2 parties that want to extract value (builder, buyer) if there are 3 parties now everyone needs to make money. (builder, speculator,

by Taronar 5mo ago

Lets say a transaction has 2 parties that want to extract value (builder, buyer) if there are 3 parties now everyone needs to make money. (builder, speculator, buyer) middle mans ALWAYS increase prices and add little to no value to the actual GDP of a country. They do offer financing, but a financing value of lets say 500k vs a construction value of 500k the construction value has more weight because it is fully finanical vlaue. the 500k investment might be part of a money multiplier which puts strain on the financial system. Speculators ALWAYS drive up prices. Just look at any field Private equity has touched.

horsawlarway 5mo ago
I'm going to suggest that the "buy" case actually has far more interested parties trying to extract money. In no particular order: - Financing company - Realtor x 2 (both seller and buyer) - loan servicing company (may or may not be the financing company) - Insurance companies (multiple, depending on how financing is achieved, everything from property itself, to title, to PMI) - Appraisers - Home inspectors - Closing attorneys - County tax office - City tax office Basically... there's a reason that renting is the right call if you're not buying to hold for at least 5 years, ideally 10. --- There absolutely is speculation in housing markets, but at least in the markets I'm familiar with - it's not really the landlords who are renting houses that are doing the speculation. It's the folks who buy up 100+ houses in depressed/low-income neighborhoods during recessions and then sit on empty property for years.
- skillina 5mo ago
  The difference is that all those parties serve a necessary function. We could debate the tax office - arguably the function of a transaction tax is precisely to deter speculation or sales for short-term use. Some speculators serve a necessary function but many do not. In my area it's not uncommon to see homes listed where the last sale was ~6 months ago and it's clear they just slapped some paint on it, replaced appliances in ways that are not generally to my taste, and then doubled the asking price.
  - horsawlarway 5mo ago
    Yes, and those people aren't landlords renting the property. So I'm not certain how to tie that back to the original discussion about not needing a special case to handle people accumulating multiple residential buildings. -- Side note - I don't see this case pretty much anywhere (and I'm literally in the process of looking at homes). I do see cases where a home sold 6 months to a year ago and the new price is ~10% higher, and I do see cases where a home sold in 2021/2022 and now the price is 2x higher. But what I don't see any of is doubled sales price in a 6 month window with just a new coat of paint. So I'm not certain how this is relevant at all given it's non-existent in any of the markets I'm looking at.
skillina 5mo ago
"Speculators" are not built-in middlemen, they are competing on bids with the buyer. Perhaps there could be some policy put in place to level the playing field between an owner-occupant who will bring mortgage-related red tape and an institutional investor who can make an immediate cash purchase, waive inspections, etc.

by Taronar 5mo ago

horsawlarway 5mo ago

I'm going to suggest that the "buy" case actually has far more interested parties trying to extract money. In no particular order: - Financing company - Realtor x 2 (both seller and buyer) - loan servicing company (may or may not be the financing company) - Insurance companies (multiple, depending on how financing is achieved, everything from property itself, to title, to PMI) - Appraisers - Home inspectors - Closing attorneys - County tax office - City tax office Basically... there's a reason that renting is the right call if you're not buying to hold for at least 5 years, ideally 10. --- There absolutely is speculation in housing markets, but at least in the markets I'm familiar with - it's not really the landlords who are renting houses that are doing the speculation. It's the folks who buy up 100+ houses in depressed/low-income neighborhoods during recessions and then sit on empty property for years.

skillina 5mo ago
The difference is that all those parties serve a necessary function. We could debate the tax office - arguably the function of a transaction tax is precisely to deter speculation or sales for short-term use. Some speculators serve a necessary function but many do not. In my area it's not uncommon to see homes listed where the last sale was ~6 months ago and it's clear they just slapped some paint on it, replaced appliances in ways that are not generally to my taste, and then doubled the asking price.
- horsawlarway 5mo ago
  Yes, and those people aren't landlords renting the property. So I'm not certain how to tie that back to the original discussion about not needing a special case to handle people accumulating multiple residential buildings. -- Side note - I don't see this case pretty much anywhere (and I'm literally in the process of looking at homes). I do see cases where a home sold 6 months to a year ago and the new price is ~10% higher, and I do see cases where a home sold in 2021/2022 and now the price is 2x higher. But what I don't see any of is doubled sales price in a 6 month window with just a new coat of paint. So I'm not certain how this is relevant at all given it's non-existent in any of the markets I'm looking at.

skillina 5mo ago

"Speculators" are not built-in middlemen, they are competing on bids with the buyer. Perhaps there could be some policy put in place to level the playing field between an owner-occupant who will bring mortgage-related red tape and an institutional investor who can make an immediate cash purchase, waive inspections, etc.