[chiefalchemist]

Perhaps. But that still has an influence on prices. With housing, the real estate agent will price based on other similar sales in the area. So one sale can, at least in theory, influence the price of multiple other homes in an area. And so on.

Along the same lines, in theory, Blackrock could purchase strategically such that it drives up the value of other inventory it owns in the same area. Not quite a pyramid scheme but you get the idea.

[atlantas]

Probably, but what I'm getting at is that Blackrock can afford it. What I don't understand is how so many individuals and families have been affording (or at least committing to) these prices.

[chiefalchemist]

Agreed. But let's not be naive. Little has changed since circa 2007 / 08. The Fed is still goosing the market with low cost money. The stock market is erratic so perhaps real estate for some is safer?

Most people are foolish and greedy and blind.

[bpodgursky]

Unless Blackrock is buying and leaving the houses empty it doesn't significantly affect the price of housing stock, because rentals do offset a huge portion of the purchase market.

[chiefalchemist]

Actually, it does. Value is based on perception in the market - empty or not. This is how the bubble works. Sure, leave a unit empty and it'll effect supply and thus price. But no one is knocking on doors checking occupancy. What is looked at is recent sales in the area.

The seller prices off that. The buyer gleams value the same way. Housing prices are subjective. Very much so. And this is why sale prices are so effective.