There's definitely some legacy family land holdings, but I don't know how much that effects the market. I would like to know, but I suspect that as you touched on they're making money off rents, maybe lending.
What I was getting at are the houses that are bought and the mortgage goes into a CMO[0] or a CDO[1] because the new owner really had no business buying a house in the first place but they're "getting into real-estate" and the bank found a way to get paid for writing really questionable loans. Why are people without money even in the real estate market? (See the 2008 financial collapse for more details.)
And that's just the worst of it, there's still the more legitimate case where people move their wealth into real estate because it's a good medium-term investment. I can't fault anybody for that, but I do believe it raises prices for everybody.
What I was getting at are the houses that are bought and the mortgage goes into a CMO[0] or a CDO[1] because the new owner really had no business buying a house in the first place but they're "getting into real-estate" and the bank found a way to get paid for writing really questionable loans. Why are people without money even in the real estate market? (See the 2008 financial collapse for more details.)
And that's just the worst of it, there's still the more legitimate case where people move their wealth into real estate because it's a good medium-term investment. I can't fault anybody for that, but I do believe it raises prices for everybody.
[0] - http://en.wikipedia.org/wiki/Collateralized_mortgage_obligat... [1] - http://en.wikipedia.org/wiki/Collateralized_debt_obligation