Basically I understand that there are not many houses for sale right now, so supply and demand would dictate high prices. However, wouldn’t the high prices attract more people to sell? Is everyone just holding their houses hoping prices go even higher?
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That would absolutely be true, if investment was the only reason to own a home. But real estate isn’t commodity trading. These are people’s homes. There are more considerations to selling your home than just price. If you buy a gallon of milk today, and tomorrow find out that milk ha doubled in price, you aren’t going to go out and sell your milk. You bought it so you can drink it.
Anyway, the problem with the housing market right now isn’t that people aren’t selling, but that a few buyers, such as the company Blackrock, are buying every house that goes on the market for far more than asking price. That allows them to rent that house out, making a profit in the long-term. They’re doing that because rent prices are so high. And rent is so high because no one can buy a house. It’s a vicious cycle.
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