Corporations Are Holding Back Inventory and Keeping Home Prices High, Real Estate Agent Says

A real estate agent who goes by the username @zacharyloft addressed a question that a lot of people have been asking lately, specifically when it comes to home prices. 

“Why aren’t home prices dropping?” The question appeared at the top of the video, which featured Zach having a conversation with himself, playing the part of a real estate expert and the person who was asking questions. In the video, Zach explained his theory on why prices weren’t dropping and how it was tied to interest rates.

But it was more than just that. Zach said that it also had to do with the way that different companies and homebuilders were managing their inventory, strategically holding onto land and new homes to prevent a massive drop in home values across the board. 

The video went viral, with more than 94,300 likes in less than a week. But it was the commenters who provided more surprising insight, with a lot of people sharing their ideas of how the government could step in to force a market correction. 

A Real Estate Pro Explained Why Home Prices Are Still So High

@zacharyloftAnd yes, this isn’t new and multiple companies in the real estate space have been doing the same thing♬ original sound – Delaware Realtor Zach

Zach’s video discussed challenges facing homebuyers, including the fact that many people simply don’t want to put their homes on the market because their existing interest rates are so low.

He says that, combined with the fact that many people aren’t feeling pressured to sell their homes, has left the companies holding onto land or newly built homes with a lot of influence over the real estate market and home prices. 

People Think Empty Houses Should Be Taxed Differently

The idea that the U.S. could have more affordable housing if a few corporations unloaded their empty inventory made a lot of people in the comments very angry, and they weren’t shy about sharing their disappointment. 

“This should be illegal,” one person wrote. “This is monopolizing.”

“Slap a fat vacancy tax on anything empty for more than six months,” another person wrote. “Punish these corporations for their greed and failure to abide by the market.”

“I bet they’d be rushing to sell those houses real quick if there was a vacancy tax,” another person wrote. “Literally the entire housing crisis could be solved overnight if we just had a vacancy tax.”

Vacancy Taxes Do Exist

Whether they realized it or not, the people who recommended the vacancy taxes sound like they were onto something. CUNY Institute for State & Local Governance (ISLG) says that there are certain places that impose vacancy taxes on properties.

For example, Washington, D.C. taxes property owners on a tiered system depending on what type of property they have left sitting vacant. An occupied residential real property (including a multi-family unit) is considered Class 1 and taxed at $.85 per $100. It’s worth noting that changes are expected to take place in 2027.

Meanwhile, all vacant real property is considered Class 3 and is taxed at $5.00 per $100. The district began imposing this tax in 2011. However, ISLG says it’s been hard to determine whether the tax program has been successful because the city has struggled to implement it due to staff and cost concerns.