Wolf has been watching Zillow’s antics over the last two years. The process is a share buyback applied to real estate. When you have the power to buy all the products in a finite market, you can raise the price as far as you want. The remaining products still for sale go up FAST. Part of the long war of attrition. Delete jobs, delete housing, delete comfort, delete civilization, watch the excruciating pain and mass suicide, jack off. Viagra for demons.
I’ve been watching listings in my old hometown of Ponca, and here in Spokane. Both have moved together even though they’re vastly different places in terms of government sanity and prosperity.
Spokane has been retaining comparative prosperity by riding the fake economy with casinos and Amazon. Spokane’s government has been stark raving mad for a long time.
Ponca is a sane city in a sane state. Ponca was strictly a real economy town, depending solely on Conoco. When Conoco moved to Houston, Ponca died.
Despite the natural differences, the number of houses available declined at the same rate in both cities. All houses were being bought in wholesale quantities by Zillow and other investment firms. Now Zillow shows only about 50 rentals in all of Spokane, and ONE rental in all of Ponca.
Prices for buy and rent have CONVERGED to one single national price. $350k for a house, $1100 for a one-bedroom apt. This CONVERGENCE is brand-new, never happened before. Real estate is no longer local local local. It’s national national national.
As I walked and watched the vacant apt bldg in my neighborhood for exactly ten years, I’ve been trying to figure out the motives of the owners. Why did the original owners hold onto it for 20 years while it was decaying and squatting? They had to pay property tax and insurance, and they weren’t receiving any rent at all. And then the 2017 buyer held on for 5 years, gradually doing little bits of work every few months. The work could have been completed in a month or two with a sustained effort. Why didn’t they go ahead and complete it, and start pulling in money?
Zillow answers the question. Before this year rentals were an ANALOG measurement, responding smoothly to supply and demand and quality. An old building in a lower-middle neighborhood, even nicely remodeled, was likely to bring $700 a year ago. Now everything is DIGITAL.
if Available: Price = 1100
else: Price = 0
The speculators must have known when the peak was coming, and delayed completion until they could hit the peak and lock in leases.