this post was submitted on 11 Jan 2024
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Look to other forms of scalping to see how this works at a smaller scale. Scalping isn't done through conspiracy, but a bunch of small, self-interested actors reducing supply in the market to inflate prices.
On top of that there are actors that are more coordinated and not as small, like corporations that own hundreds of thousands of homes. These corporations can just coordinate internally (not conspiracy, business) and reduce supply to increase their own returns.
This works for smaller actors too though. As long as the number of houses owned is more than a couple, then it's likely they'd profit from temporarily restricting supply, and locking in renters to leases for more money. They'll try to slowly sell off their supply without "flooding" the market and hurting the value of their own supply, just like other scalpers.
Scalping isn't the comparison though because 1, scalpers don't reduce the total supply. Any scalper who refuses to sell a portion of their tickets, loses all the money they used to buy them, and the opportunity cost of selling them, and there's no way it's worth it for any given individual. The supply/demand differential they make money from is that the venues only have a certain number of seats.
Which brings me to 2, theres no equivalent of homebuilders in the scalper world. If some scalpers could generate new seats at the venue for roughly the cost they pay the venue for tickets, supply and demand would figure themselves out pretty quick.
Hard disagree on the last part there. For one, homebuilders again. Their business model is to build the houses and then sell them, if they joined the "sell houses slower" cartel it just means they earn less profit.
But really the whole idea you're laying out, the math only works if everyone works together, so it becomes a prisoners dilemma. Because say there's 20 companies slowing down house sales to maximize profit, there can always be a 21st who gets the benefit of the restricted supply from the 20, but they just sell as much as possible and become the most profitable of all. Maybe it's in everyone's interest to restrict supply, but it's in any given company's interest to sell as much as possible. So it has to be an as of yet unknown cartel of every home seller in the country and there's just too many of them to have both: Either it includes everyone or it's secret.
There are absolutely scalpers that reduce total supply. They'll only list a couple of consoles that they scalp at a time even if they buy in massive bulk, and it's all done on the pretense of a limited supply from the original seller that they're artificially limiting past what the market would naturally do (by buying a ton of them up). Given a literally infinite supply, scalpers lack an ability to do anything. Put another way, when they can't restrict supply, it's not a viable strategy.
It's not that they refuse to sell some of their supply, it's a temporary restriction (all supply restrictions can be viewed as temporary because we don't have total knowledge of future supply). The temporary restriction benefits them because they can start bidding wars over the reduced supply, and get a higher price per unit at the cost of getting the money over a longer period of time.
The exact same thing works for housing, when you have the same company renting out tons of units but also keeping tons of units in the same area off the market. It means the bidding wars for the smaller supply of units results in more money per unit (lower supply, same demand, means higher costs).
The concept of a prisoners dilemma here only works if houses are fungible, but they're not. There are sometimes very similar units or even houses in a neighborhood in the same location, and these are almost fungible, but even in these contexts those nearly identical units in nearly identical locations are usually owned by a single entity (corporate or otherwise), so again there's no prisoner's dillema, they can restrict supply effectively to increase yield.
The time vs value calculation is different for housing too compared to smaller things like groceries. If you're a grocery store, and your local distributor of apples lowers the price of apples, some of that will likely go to the customer because of local competition pushing prices down, and you have a constant supply tied to a constant demand of these (from a buyer's perspective) essentially fungible things.
Houses are different because if you see the price of houses in your neighborhood drop by some significant amount, individual actors who may otherwise want to sell will actively choose to not list their house because they know the value will go back up, and so these actors are all incentivized to vastly limit supply if something in some area cuts the prices of houses (like a huge influx of new homes for example). These individual actors could be literal individuals or corporations.