[jjk166]

> As soon as they're done with a house / harvest, either a consumer or a speculator buys it and they can focus on producing the next house/crop. Without speculators, they'd have to not only do their value-add, they'd also have to predict the market and hope enough customers show up in future. With speculators, this is significantly mitigated.

Sounds like a great way to over or undershoot demand leading to market inefficiencies which the speculators have a perverse incentive to increase. It may be useful for a market like agriculture where production is variable and the produced goods are perishable - the loss from speculators may be less than the inefficiencies of noise. However, we've all seen how broken the real estate market has been despite the continued presence of land being one of the least variable things we encounter.

[FredPret]

The real estate market got borked by the fact that municipal authorities answer to incumbent owners, who ~universally acted to limit new building. This breaks the mechanism by which some speculators go out of business.

If you can build anywhere, and a speculator is blocking development of a prime piece of land, you'll simply build elsewhere, making that land less prime with each passing moment, and eventually driving the speculator out of business.