Can an Imperfect Market Produce Perfect Results?
In economics, it’s well known that a perfect market is one in which everybody has access to information instantly, accurately, and uniformly. The closest market in the United States to this is our stock market, where the information flows freely; investors know exactly how securities are priced within moments of the most recent trades. Perfect markets are difficult to beat, and the people who identify and take little pinches of profits call it arbitrage. The real estate market, on the other hand, is far from perfect. Very little information is known about buy and sell transactions on homes, apartments, commercial properties, industrial centers — often times not until months after the transaction has taken place. It’s the lack of instant information that makes the real estate market such a great place for professional purchasers to make plenty of money. The opportunity to take advantage of an imperfect market is always available for the people who have the most information. And those t
