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RickRussell_CA@lemmy.world ⁨10⁩ ⁨months⁩ ago

With respect, you’re missing the point.

Sellers don’t determine price. Buyers do. “Investors” (big, small, whatever) are selling homes at those prices (or renting, or VRBOing) because there are customers ready to buy the next available unit. If customers aren’t willing to buy at that price, then the seller will lower the price. Or never build the big house in the first place. Or never renovate. Who would spend money on an investment when nobody will buy it?

They can only sell for those prices because buyers are ready to buy.

Economists have a concept of “economic value”. Regardless of price, “economic value” it what the next buyer is willing to pay for an item RIGHT NOW. People have a lot of weird ideas about what the “value” of something is, and they’ll include all sorts of non-monetary factors because they think value is a feeling or concept of utility that particularly applies to them. They value “walkability” or “views” or “quaint antique design”, or whatever.

But inasmuch as “value” has any objective meaning, the best one economists have managed to come up with is economic value – the price that a unit of something will sell for at this very moment. And I humbly suggest that the economic value of housing in your area something is determined entirely by the buyer: the person or entity that is willing to buy the next available unit of housing.

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Devi@kbin.social ⁨10⁩ ⁨months⁩ ago
You and the other guy are talking about two different things. You're trying to explain supply and demand in a very factual way, the other guy is explaining to you how this is hurting actual people who need somewhere to live.

They haven't missed the point at all but are talking about the human element here.

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leadore@kbin.social ⁨10⁩ ⁨months⁩ ago

“Investors” (big, small, whatever) are selling homes at those prices (or renting, or VRBOing) because there are customers ready to buy the next available unit.

The "investors" are the buyers/customers, and they aren't reselling these houses--they're renting them out. It's mostly corporations increasingly doing over the last 15 years or so (I think it started around the 2008 financial crisis). They have the capital to do it and so regular people are being priced out more and more as this practice keeps driving up prices.

It didn't used to be this way. Even in my "cheap" area, when I bought my house back in 2005 all but one house on my block were owner-occupied. Now, more than half the houses are rentals because whenever one came up for sale it was bought by a rental company. This is a serious crisis that needs to be addressed.

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ChonkyOwlbear@lemmy.world ⁨10⁩ ⁨months⁩ ago
Part of the problem is it’s still more profitable to build an expensive property and wait a couple years to find a buyer who can afford it than to build an affordable property which will sell right away.

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jmanjones@lemmy.world ⁨10⁩ ⁨months⁩ ago
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- RickRussell_CA@lemmy.world ⁨10⁩ ⁨months⁩ ago
  If the first time buyer cannot afford a house, it means another buyer showed up with a higher offer. It doesn’t really matter who owns the house.
  
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Blaidd@lemm.ee ⁨10⁩ ⁨months⁩ ago

They can only sell for those prices because buyers are ready to buy

Because the alternative is to be homeless.

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- RickRussell_CA@lemmy.world ⁨10⁩ ⁨months⁩ ago
  Or leave the area for lower prices somewhere else.
  
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  - Blaidd@lemm.ee ⁨10⁩ ⁨months⁩ ago
    So quit your job and pay hundreds, maybe even thousands, of dollars to move somewhere different where you no longer have a source of income and don’t know anyone?
    
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    RickRussell_CA@lemmy.world ⁨10⁩ ⁨months⁩ ago
    I’m not saying I like it, that’s just how it is. As a consumer of housing, like anything else, when you can’t afford what you want you have to get something less.
    
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