"The housing market" is, by far, individual home sellers. Home sellers without sufficient incentive to sell can afford to wait for a higher prices. They are getting massive utility from the house already, they live in it, they might have no reason to sell if they cannot get a sufficiently high price.

Barring loss of income, death, or something else that really motivates a home owner to sell, there is little reason for homeowners to sell the property at a price they deem too low.

Hence increasing supply is the only way to lower prices, because an empty house usually has has negative utility (property tax, maintenance, security, etc), so the seller (home builders) are far more motivated to sell it.

Data like Zillow's Zestimate may impact the prices that people start with, but supply and demand take care of the rest.

I think that the lack of housing supply in most markets and higher demand for housing is what is keeping prices inflated.

If anything, this shows how high prices _would have gone_ had the interest rates stayed low, given that they are still high with today's high mortgage rates lowering demand.

this is empty verbage -- the money supply is run by groups of people i.e. the tender is tendered by tenders. Those comfortable with double-dipping into the cash supplies and using it to boost asset prices, did so with gusto. The rest of society suffers with a small (governing,lending) few benefiting mightily. The "copium" statements by the intellectually uncurious, those who are benefitting, and those that are perpetrating, come off like this vacuous non-statement above.

Keeping adding people and not housing supply and prices will go up. Remove people and add housing supply and prices will go down

The auto world works a little different since there is an entire wholesale operation behind the scenes that also drives pricing. There are several alternatives to KBB although less targeted to consumers. Also way more standardized in condition reporting.... but I know too much about the industry.

I do think that the introduction of software has probably made price discovery more efficient and gives landlords more confidence that if they raise rents, they will easily have offers even if the current tenants leave.

For some of the more desirable and built-up urban neighborhoods, small individually owned properties are all but bought up and almost all of the units are in large complexes owned by large corporate landlords.

I live in NYC. The housing market sucks here - but I don't think its because of collusion in setting prices. The supply just isn't as high as demand (and millions of voters who already own property seem fine with that)

But if we consider that people would consider living in the larger commute area, the article says:

> Across a wider Washington-Arlington-Alexandria area, more than 90 percent of units in large buildings are subject to RealPage pricing

And these large building are the bulk of the housing stock in these areas, they're not competing with single family homes or duplexes in these areas.

I'm not suggesting an app couldn't help coordinate prices in this instance, but I am suggesting that as long as the buildings are owned by other people they still have strong incentive to compete with each other.

If I own a building and the app suggests I raise prices, but then the units don't fill, I'm just going to lower prices.

> If I own a building and the app suggests I raise prices, but then the units don't fill, I'm just going to lower prices.

Yes, but if everyone raises prices together, people won't just choose to be homeless. Collusion is anti-competitive because it ensures that the participants wont compete with each other on price. They all raise rates together so people are stuck: their rent went up, but so did rent everywhere.

In a competitive market, some will raise rates, some will keep them the same, some may drop them. Those differences in strategy is what creates competition. When everyone cooperates to do the same thing, it eliminates competitive pressure.

It would be interesting to see if how rent markets change if more data becomes available. In the auto-industry, a car dealer can offload the unit to the wholesale market to minimize loss, whereas a landlord is less liquid.

The inventory pressure is there in both situations. An unsold car after 30-60 days is a problem both because of typical retail business dynamics and additional factors with general vehicle depreciation and high maintenance overhead of a vehicle compared to other capital goods, but the exit strategy is there and risk exposure can be limited.

Adding transparency, and a tax incentive to fill vacant rentals, could make rent prices less sticky.

I would be surprised if this were the case. It's supply and demand. Imagine there are 20 houses available for sale in a small area. The Zestimate for each is 1.5M. But I see they are sitting on the market a long time, and I don't see a full open house. If I am going to bid on one, am I bidding 1.5? Nope. I am gonna bid way less because I perceive the market is in my favor (more supply than demand)

Opposite scenario. Only one house for sale. The Zestimate is the same 1.5M. The open house is mobbed. Am I going to bid 1.5? No, because I gotta bit higher if I want this house because the market is not in my favor (more demand than supply.)

The Zestimate is useful in the 2nd case because it tells me what a similar house in the area went for, so I have an idea of how much people are willing to pay, and go higher than them. But I am not going to actually bid high unless I see the market shape that way.

Or a house where the seller is dropping prices for many months will have the old data deleted, and the history only shows that it was just put up for sale at a lower price than before.

I don't know if this is a feature of MLS, but Zillow already had the data, so I cannot think of a reason that they would remove the data unless they wanted to hide the fact that the houses are not moving at the original prices.

BTW this is one of those cases where having an agent helps you. A good agent will be able to tell you "oh there's a lot of houses coming on the market, getting no bids, and coming off" if you don't pick up that insight yourself.

And it’s selectively deleted too. For example, one house, you can see the price reductions in 2010/2011, and then it never sold. And they tried selling again, and reduced price, and once again, the house didn’t sell, but this time, all of the information about this year and last year was deleted.

> [E]very morning, RealPage provides participating Lessors with recommended price levels. Lessors typically must communicate to a RealPage “Pricing Advisor” that they have “accept[ed]” or “confirm[ed] the “approved pricing” within a specified time frame. If Lessors wish to diverge from the “approved pricing” they must submit reasoning for doing so and await approval.

[...]

> But RealPage emphasizes the need for discipline among participating Lessors and urges them that for its coordinated algorithmic pricing to be the most successful in increasing rents, participating Lessors must adopt RealPage’s pricing at least 80% of the time.

This organization was enforcing 'discipline' among the participants to make sure that they didn't undercut each other too often. That's a cartel.

1. https://cohost.org/morayati/post/925436-i-saw-real-page-s-cr...

https://oag.dc.gov/sites/default/files/2023-11/DC%20OAG%20Re...

Eg, paragraph 57 spells out exactly the allegation you’re saying isn’t there.

Also, I think there is a pretty big difference between enforcing compliance and saying "we think you will make the most if you list at the recommended price".

Where would you draw the line for collusion? Simple information sharing? Recommending listing within 10% of the mean? Punishments for deviating from the mean? Actively setting and listing the price for the landlord.

By my reading, Realpage may be engaging in collusion in the cases where it actively manages and sets prices for landlords, but not in the cases where it simply reports and recommends a price.

Im guessing they will have to discontinue the service offerings where they take the control and responsibility for setting the price and listing it on behalf of the landlord

Looking past the bluster at the statements of fact, I don't see anything supporting it in the doc. Thats why they have to lean so hard on text questionnaire and phone calls in the he other section as a cartel enforcement method.

Paragraphs 64-70 support the first quote.

You’re correct that this is LSAT level, which is why it’s so shocking that you’re not able to read a few pages that are clearly labeled.

To remain in compliance with the law, OAG recommends landlords and property owners refrain from requesting a potential tenant’s court records and rental histories altogether and cease relationships with tenant screening bureaus who continue to provide court records. Any New Yorker who believes that they have been denied an apartment because of their rental history should submit a tenant blacklisting complaint online with OAG.

In its investigation of Clipper Equity, OAG determined the company had improperly obtained housing court records for 25 potential tenants and then denied housing to seven of those same applicants. The OAG found that Clipper thus violated the law. Clipper also violated city and state Human Rights laws by requiring potential tenants to disclose their marital status. As part of the agreement, Clipper Equity will take the necessary steps to comply with the laws it broke and has committed to ending its discriminatory screening policies.

[1] https://ag.ny.gov/press-release/2022/attorney-general-james-...

Back when I was renting (and this I acknowledge isn't even a grey area thing, just shady), I even called out a small local PM company... their "main" website, listing properties was all about their "ethics" and "fairness" and "transparency". But when you went into the "Owners" section you got then told to visit a different site, which talked about how the company would "work with you" to get "the maximum value for your property, strategically adjusting rental pricing upwards" while "shielding the landlord".

Customers do the same thing. They look at price and shop around.

Collusion where a group agrees to charge more than the market price together is bad (and illegal). Its worse for the individual supplier as they could charge less and get more revenue, but done collectively can have a potential for a higher total revenue given everyone obeys. But there is always an incentive to cheat and make more individually while hurting everyone else collectively. Which is why the legally enforceable aspect is important

But these aren't the same thing

Get Apartment A to raise rents and enforce these increased rates.

Then go to Apartment B and say “look you gotta raise your prices to the market rate, apartment A is doing it so you can too”.

Then go back to A and say “hey the market can bear this price, why don’t you raise your rent?”

They also encourage owners to keep units vacant (which they should be able to afford if they’re getting prices to go up) rather than rent at a cheaper price.

So this feels like collusion to me. But they also say “Everything we do is legal!” - and if that’s the case we need better laws and regulation to avoid this type of behavior. It’s like a distributed cartel - you can’t charge SF rates in Baltimore but what if you could get Baltimore rates to go up by X% YoY with this tactic? Seems unfair.

But that first person takes a Big risk raising prices since he is necessarily losing money relative to charging market price in the hopes others come along in significant numbers.

Leaving rooms vacant is incredibly expensive. Profit margins are not that high. So think if you're making 15% margin eating a single month of rent would cost you profit over 6 units. It's a hell of a gamble

Profit margins are high if you collude with 90% of the market to artificially raise prices.

> The complaint, filed earlier today by Attorney General Brian Schwalb, focuses on the multifamily landlords' use of software from Texas-based firm RealPage, which suggests rental prices based on a pricing algorithm. Key to those models, according to the suit, is the data fed in from the landlords and the pressure RealPage puts on them to stick to the code-derived rental rates.

It's a complaint. Nothing was filed yet. And it looks like they used a pricing algo to suggest a price? Im suggested a price when I sell on eBay, or StubHub or Facebook marketplace, or pretty much anywhere. I don't know how they "pressured" landlords but maybe a box like "we suggest market price to maximize returns!" eBay similarly warns me when I stray too far away. The pricing algo is actually a fabulous service.

And if they're a property manager then their job is to find the market price and rent out apartments at the behest of landlords. I really don't see the technical issue here. You can say collude and conspire, but what does that mean in technical terms. And what does "being subject to" the algo mean? Exposed?

RealPage requires users to accept some % of centrally-decided prices.

That's the issue.

> And what does "being subject to" the algo mean? Exposed?

No. It means being required to set prices to what the algo says, instead of being allowed to "defect",with lower price.

Which is why the very bad and illegal part, of the software company trying to enforce the high prices, was so bad.

This only works if landlords can't "defect" and lower prices on their own.

That's why it's collusion.

...

If someone can figure out the con on a message board unrelated to real estate I'm pretty sure investors financing this stuff could figure it out as well

If they did the math after all the various factors are considered and this happened, then clearly this is the best play from their perspective. It's not even malice it's just "economic sense", except the way the economics works out just happens to screw people with barely enough money to afford rent.

That still doesn't mean they're not culpable under the textbook legal definition of collusion.

Louis Rossmann has made numerous videos about vacant properties where asking prices for rent are significantly above what he considers to be market value. Notably, https://www.youtube.com/watch?v=NdfmMB1E_qk and the Reddit post which he commented on: https://www.reddit.com/r/nyc/comments/innhah/comment/g4ai27m...

The TL;DR is that there's weak evidence that the contractual conditions attached to financing from investors who seek high risk and high reward makes those landlords ignore local market conditions and incentivizes those landlords to leave commercial units vacant instead of renting them out at market value.

This IS collusion because RealPage goes to apartment A and B and says "give us control and we will list your prices together to get the highest price"

If every landlord in town all went to a guy named Bob to ask what they should set their prices at, that would be illegal collusion.

Hell, by that metric the stock market is collision.

I don't really care whether there is a cartel for paperclips.

It doesn't mean they are okay when it comes to critical sector like housing!

Information sharing is an integral component of cartel behavior, especially when it's highly structured in cartel software like RealPage. Where there's smoke, there's probably fire.

Because selling labour is the most cut-throat business there is. To the point that we had to create extensive labour laws to stop the bleeding that always ensues when unencumbered labourers start competing with each other.

Revealing price information to your competition puts you at a competitive disadvantage. If they know you charge $30 per hour, they'll jump in and offer to do it for $29 per hour. Conversely, if they don't know how much you charge, they are left to guess. If they think you charge $35 per hour, they'll offer $34 per hour, but then you'll win as you charge $30 per hour. Obviously you are disadvantaged if you let that information be known. Especially if they can withhold their information from you.

No business wants to reveal price before they have to. Retail has to get the price out there early as it is the only way to get customers in the door, but businesses will keep things as close to their chest as possible. Try buying anything geared towards enterprise customers... In fact, ideally, they will leave the customer make the first offer as it is also a disadvantage to go first.

If there are 10 firms chasing 9 employees, more information will drive up prices. IF there are 10 employees chasing 9 jobs, more information will drive down prices.

From my personal experience working in an industry that hires a lot of minimum wage workers, I encounter a lot of people who just don't realize that they could make more doing something else. I mean, they understand in some nebulous way that higher paying jobs exist, but not in an actionable way. With more information, they might notice that they could squeeze out a particular guy making $30 by doing the job for $25 per hour. But they don't even go there because they lack the information needed.

At the same time, those minimum wage jobs I speak of aren't going to pay more if the people leave – the work would just disappear. So while these individuals would make more, they would place downward pressure on the overall market in making such a move. By keeping the information hard to come by, however, you can avoid some of that competitive pressure.

> No business wants to reveal price before they have to.

Interesting. If RealPage/etc is "just" about information sharing, as many of its defenders in these comments are asserting, why would any rentier use it? There must be more going on.

Anyway, coworkers or friends sharing labor price information clearly has nothing to do with your rebuttal. The main outcome is that one party might be inspired to ask for a higher wage. It's a crude form of coordination, but that is why our capitalist society discourages it.

To facilitate collusion.

Although I understand your larger sentiment. As a farmer, I have to align my prices with the Chicago Board of Trade, which in many ways is similar. Once price data becomes pervasive enough, there is a tipping point where you have to reveal your prices early to remain competitive. I mentioned retail earlier as being another example of where that has taken hold. That theoretically is a reason why rentiers could be compelled into using such a system absent of collusion taking place.

> but that is why our capitalist society discourages it.

I am not sure I understand the attribution to a capitalist society here. It was also discouraged to talk about income in Soviet Russia, as an example. That competitiveness of which we speak is not a function of a capitalist society, it is a function of human nature. Hell, I bet in early hunter-gatherer societies it was discouraged to talk about how much of the gathered resources you were able to keep for yourself.

What evidence do you have for this? In current "socialist" countries like China, talking openly about wages is common and not discouraged.

The incentives are crystal clear. Price coordination works, and workers in USA are brainwashed against doing it in their own benefit.

Again, price coordination is necessary to remain competitive once price data becomes pervasive. Such data is not readily available in the USA with respect to labour, however, thus it is a competitive advantage to remain guarded.

Information sharing is a necessary but insufficient component of cartel behavior.