Spring/Summer 1984, Vol 9, No 1

Abstract: Real estate market speculation has often been characterized as an unfair and socially costly activity, practiced by greedy, money-mad and antisocial speculators. However, the social desirability of speculation in real estate markets is an issue which should be resolved empirically for the market in question, and not determined a priori. Knowledgeable, efficient price-taking speculators operating in relatively efficient markets may increase the overall well-being of society. Government intervention in real estate markets is not always justified for non-political reasons, and may destabilize relatively efficient markets, increase uncertainty and impose additional costs, which make housing less affordable for the average home buyer.