Comment by epistasis
4 days ago
There are well over a million homes in the metro Atlanta area. If the top three owners have less than 4% of a market, need if they act in a completely coordinated manner they have approximately zero market power.
4 days ago
There are well over a million homes in the metro Atlanta area. If the top three owners have less than 4% of a market, need if they act in a completely coordinated manner they have approximately zero market power.
Yes if the market is for rice, but illiquid assets are an entirely different market which can be crazy warped by a few important participants.
How so, could you explain that a bit? I could see them causing a price dip or spike in purchase prices if they bought or sold all at the same time, but that would affect their own prices that they pay or receive, right? What is the market manipulation with 4% of housing stock?
Houses are unique and have irreducible transaction costs which makes the market for them very inefficient and slow relative to a commodity. For one example, if you are in the market for a 3-bedroom house with a garage, the market is already segmented much more narrowly than can be the case in an efficient market like that for a commodity. If you have to move into one as soon as possible for a new job, and you know closing will take a minimum of 3 months, the market for your prospective houses is going to be extremely small without even factoring in other distinctive characteristics like driving distance and schools. 4% of the aggregate market may represent 25-30% of your “market” nonetheless.
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