alt Hacker News> Just because they are holding a small portion of all houses doesn’t meant they can’t have a huge effect.
There's no reason to believe that someone owning a tiny portion of the houses is setting the market price.
> they are huge institutions with tons of money, and thus can hold houses longer, buy houses are higher prices, influence related markets, etc.
No huge institution is willing to lose enormous sums of money waiting for vacant overpriced houses to sell.
I've lived in many houses. One was in a development, and I wanted to sell it. There were several houses in it that were vacant and for sale with no offers in the previous year. I sold mine in 3 weeks. It was simple - I priced it properly, and I didn't have to pay another year of taxes, insurance, repairs, maintenance, and worry, only to have to lower the price anyway to get rid of it. A couple of the other homeowners were angry with me about that, but that was their problem.
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> It was simple - I priced it properly, and I didn't have to pay another year of taxes, insurance, repairs, maintenance, and worry, only to have to lower the price anyway to get rid of it. A couple of the other homeowners were angry with me about that, but that was their problem.
I think you just explained partly the reason behind why a small number of owners can drive the prices up. But these are usually private owners. Whenever I see bank sales, they're more like flash sale and done.
Those who can afford to sit on the property trying to obtain a higher price will do it. Other owners will look at that and try to keep the price high with the illusory hope that they can also make that much money. Individual owners can suffer from FOMO and are influenced by success stories, so ask a high price hoping to capture as much of the value as possible.
I saw it in action when I bought my house. The seller saw his neighbor selling the house a year earlier for [princely sum] so he jumped to put his house on the market for [princely sum +20%]. The whole neighborhood was following the same playbook, looking at who sold and raising the bar. After a year with that house on the market I became interested and in a 6 month process I ended up buying the house for [princely sum -20%].
None of the neighbors know how much he got, only know how much he asked. A similar house 50m away is still up for sale for even higher price than than the listed price for mine. They can afford to sit on it for a while because the extra money they hope for covers the taxes and upkeep tenfold or more.
this is not true, this is the basis for housing speculation. Holding vacant overpriced houses until they sell. Its not a loss until you close the sale.
There is reason to believe that someone owning a tiny portion of the houses is setting the market price because that tiny portion is a significant portion of the houses on sale.