Yes, both are true, at least in San Francisco where I live:
Properties which are zoned for rental rather than purchase (by rent control laws which make it hard to turn rentals into condos) are more immune from the cash-buyer effect.
And I believe that a large proportion of condo owners could make more money by selling and investing in the stock market instead. I did just that, selling my SF area condo and investing instead in the stock market while renting, and the capital that I would have tied up in real estate performed much better in the stock market even though the real estate market has been going gangbusters here.
However the very rich people who have lots of cash here have reasons other than return that motivate them to stay invested in real estate over other better performing options, so this inefficiency will likely persist.
