If you want to buy a home you offer the owner some money. If the owner and you agree on a price a deal is done.
Property is worth exactly what someone is willing to pay.
Exactly.
You appear to be arbitrarily assigning evil to owners and victim to buyers.
No. You appear to not read my posts properly.
Imagine an estate is being sold, and there are 5 potential buyers (long term investors) who want to use that estate. However, let's say that a sixth person (short term investor) joins in, but that person does not need to use the estate for anything. Whereas before it was a competition between 5 people, it is now a competition between 6 people, one of which doesn't want to use the estate. Now, let's imagine that the short term investor manages to buy the estate. Now we still have 5 long term investors that want or maybe even need real estate for some use. Meanwhile, had one of the long term investors bought the estate, we'd have 4 long term investors that want or need estate, and the short term investor that doesn't actually need any estate will either drop out of the local demand, or maybe stay, who knows. But let's continue with the scenario where short term investor wins. The estate is not going to be developed, and the short term investor will not sell the estate until it rises in price.
Let us now say that there's a second estate at sale (not at the same time as the first one, but after, for simplicity). Without the short term investor there'd be 4 people competing for this second estate, as one already got the first estate. This second estate should sell for a little less, as there is less demand, than the first estate. The result of this scenario is that two people that wanted or needed estate to use got it, one possibly got it a little cheaper than the other, and we have three people who still want or need estate to use. If the short term investor was present during the selling of the first estate but lost interest in the second, the first estate would had been slightly more expensive because of increased demand for it. The short-time investor isn't in need for real estate, so there should be no harm for dropping out of the competition unless it's how he earns his whole living.
Let's bring in the short term investor for the second estate though, in the scenario where they do not get the first estate. Now the second estate should be sold for about the same price as the first estate would had been sold for without the short-term investor. If the short-term investor fails to get the estate again, then we'd have almost the same result as without the short-time investor. But not quite. Both estates would had sold for a little more, we'd still have 3 people that want or need estate to use and one person who's at worst annoyed, unless they're betting their livelihood on it.
Let's say that the short time investor gets the first estate. Now the second estate should sell for the same price that the first estate would had sold for if the short time investor wasn't involved. Then after x years short term investor sells the estate, unchanged, to one of the 4 remaining people who still needs or wants estate to use. The result is that one person got to buy an estate at full price (which it what I'll call the price of the first estate without short time investor) and the other got to pay for overprice (price of first estate with short time investor involved) plus inflated price over time. Then we still have 3 long term investors. And one happy short time investor.
Same thing with the second estate. One has to pay overprice, another has to pay full price plus inflation over time. 3 long term investors left and once again a happy short time investor.
This is obviously very oversimplified, but I think it's clear that the original owners and the final buyers do not profit, but are losing out, because of short-time investors. Original owners can earn a little since they get to sell at a higher price when there is a higher demand thanks to the short time investor. But investors will try to get the buying done BEFORE the real demand kicks in, it's possible that the original owner could had sold it a couple of months later for a bit of a better price when the real demand would had kicked in. But in the cases where the short time investor doesn't manage to buy any estate and they aren't actually in need of estate they are jacking up prices when there is no "real" demand for it, kind of like bidding for the sake of provoking a bidding war (of course they're really trying to get the estate. The point is that they're not "consumers", they do not need or want the estate, they just want to buy it and then sell it, so they do not accurately represent what a consumer wants to pay for estate). And I'm not going to say that they are evil or immorally greedy, they are just taking advantage of how the real estate market works and they're not actively trying to hurt other people economically. Prices increase more than they need to and makes it tougher for people who really just wants or needs estate to put to actual use to get that estate. This means fewer people who can afford own houses in good places, which could limit their productivity, and fewer people who can open up new businesses.
Which works until it doesn't. If prices start spiralling down then you're fucked.
Yes. But that doesn't exactly make short term investments better for the economy.
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