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this post was submitted on 07 Dec 2024
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capitalism is not very competive and therefore, price-fixing between small group of large players, is almost inevitable outcome.
Yea but this is a situation in which price fixing would be nearly impossible without the intermediary, due to the large number of participants. And price fixing is still illegal.
You don’t need price fixing for any industry to go this direction. Take the gas station idea. You’ve got a corner with 4 gas stations. Each one can see the traffic the other ones get and can easily see how much they charge. All it takes is them saying “well, people are still buying gas at that station for $X more than mine, so I’ll charge that as well. And soon they’re all skyrocketing to whatever the consumers can afford.
Calling a group put on Price Fixing requires proving they colluded together to do so, but that’s not required in this scenario. Every landlord can see how much other rents are and if they can make more money and keep their renters or get new ones, they will push that limit. And honestly if they can raise it enough to cover some vacancies they’ll do that, charging 30% more but having 10% empty is still a net 20% in their pockets.
I would argue that the app is essentially the collusion.
#notanexpert . but to argue my case:
in some housing markets: "Top 5 companies control 70% of the market: The top 5 real estate companies in the <city's> market, including Ebby Halliday, Keller Williams, RE/MAX, Coldwell Banker, and Century 21, control approximately 70% of the market share"
Are you sure they are the companies owning the homes? They look like realtors to me.
I have heard of rental funds buying up real estate but I think this is still a relatively small portion of the market with a relatively large number of players such as these
thanks for the tip. the number would seem to sit at 40% dominance by urban landlords.
i would think that the housing market, affects the rental market. but not always. apart from homebuyers that get priced out and have to re-enter the rental market.
I'm not sure what that means, but if the link I gave was correct and the biggest one has ~85,000 homes, that's only 0.1% of the total US single family housing market of 82 million single family homes. That would indicate that there would be thousands of landlords in most areas, meaning that collusion between them would require a sophisticated networked system between them.