Ok here we go. First of all, just because the ratio went up doesn't mean that rentals didn't go up as well. Second, what are the units are that graph? 25? Tha

Ok here we go. First of all, just because the ratio went up doesn't mean that rentals didn't go up as well. Second, what are the units are that graph? 25? That's definately not 25x unless you've normalized it to the 1900s or so which is silly. That graph has an exaggerated axis. Third, the metric for price-rent ratio is rather arbitrary. How is a rental for 12 months ever equal to the cost of a house? A house is not entirely equivalent to an apartment to be compared in this manner, and the number of houses for rent is inversely related to the market price. Yes, I would have lost if housing turned out to be a good investment. This does not change the fact that your "legitimate buyers" were speculating. The point is the people who were scalping first forced an artificial panic on the system. If they did not have the power to do this, people wouldn't have been highly compelled to follow them. Therefore scalpers are bad for the market. This is equivalent to a "pump and dump" scheme which is illegal when trading equities. Also, if you are comparing scalping to text message prices, that analogy would only make sense if a single scalper (or a small number of scalpers) holds a monopoly over the market (either in tickets or houses). That's obviously wrong. No you are completely missing the point. Scalpers have at least a regional monopoly. Is text messaging a regional monopoly? Yes. Did housing speculators buy up whole plots of real estate in certain areas? Yes. Did wii buyers hold a monopoly on wiis when they bought out the limited supply in stores and put them up on ebay? Yes. That's the entire point of scalping, to create an artificial lack of demand through a monopoly.