Is it legal, in the U.S., for a group of neighbors in an area, to agree they won't be letting their properties sell for less than a certain price each (or another yardstick, such as per sq ft prices) for a certain period of time, so that they raise the value of their housing, if they believe there is cushion on the buyers side to pay even more than they are already paying? Would it be considered price fixing or collusion ? I think this practice would be illegal for corporations, not sure about individual market participants.
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A property developer owns many similar or identical houses for sale in a development, and sets (and can hold for a period of time) the price. Why do you assert this very common business model is illegal?– user662852May 4, 2016 at 1:15
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Because that is a single interested party (company) va multiple ones. That's why I thought this would be subject to anti price fixing laws. Maybe I'm wrong– amphibientMay 4, 2016 at 1:17
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2 Answers
The Sherman anti-trust laws prohibit this form of conduct "in restraint of trade or commerce", however, as federal law only impacts interstate commerce and it it is unlikely the behaviour you speak of would have an impact across state borders you would need to look to the equivalent law of the relevant state.
The question then becomes, are people selling their own houses engaging in "trade or commerce". I can't find a US precedent but under the equivalent law in Australia, the answer is no (Williams v Pisano [2015] NSWCA 177) and such behaviour would be lawful.
Following up on Dale M's answer (that it violates Sherman), McLain v. Real Estate Board of New Orleans, Inc. 444 U.S. 232 holds that federal jurisdiction exists if an activity "has an effect on some other appreciable activity demonstrably in interstate commerce". What could such activities be? Financing of mortgages by interstate banks; mortgage insurance and title insurance provided by interstate companies. From the decision:
It is clear that an appreciable amount of commerce is involved in the financing of residential property in the Greater New Orleans area and in the insuring of titles to such property. The presidents of two of the many lending institutions in the area stated in their deposition testimony that those institutions committed hundreds of millions of dollars to residential financing during the period covered by the complaint. The testimony further demonstrates that this appreciable commercial activity has occurred in interstate commerce. Funds were raised from out-of-state investors and from interbank loans obtained from interstate financial institutions. Multistate lending institutions took mortgages insured under federal programs which entailed interstate transfers of premiums and settlements. Mortgage obligations physically and constructively were traded as financial instruments in the interstate secondary mortgage market. Before making a mortgage loan in the Greater New Orleans area, lending institutions usually, if not always, required title insurance, which was furnished by interstate corporations.
