Posted on 12/07/2005 10:24:45 AM PST by BurbankKarl
Individuals are pulling back from buying homes and condos as an investment, in a move that could accelerate the cooling of the housing market.
In markets such as Las Vegas, Miami, Phoenix, San Diego and Washington, D.C., where investor activity had been heated, fewer people are competing to buy properties as an investment, real-estate brokers and housing analysts say. Some investor-owned properties are returning to the market for sale. With the pace of price appreciation slowing, some investors who were betting on quick profits are instead being squeezed.
The apparent pullback by investors is recent and is just beginning to show up in national data. Evidence of the development can also be seen in a number of markets that had until recently been a hotbed of investor activity. As speculators withdraw from the market in San Diego, for instance, the number of investors buying property has fallen by nearly half, estimates Russ Valone, president of MarketPointe Realty Advisors, which tracks the San Diego housing market.
In the Phoenix area, as many as 30% of properties for sale are currently owned by investors, says Jay Butler, director of the Arizona Real Estate Center at Arizona State University. Six months ago, most investors were buying rather than selling, he says. The shift has helped to drive up inventories of homes for sale in the Phoenix area, which climbed to 22,340 in October from 8,600 in April, according to data from the Arizona Regional Multiple Listing Service.
Another concern is that investors will be quicker to sell if prices soften, accentuating any downturn, particularly in areas where speculation has been most prevalent. Some of the most vulnerable markets include Daytona, Fla., Las Vegas, Phoenix and Fresno and Bakersfield, Calif., according to Credit Suisse First Boston analyst Dennis McGill.
(Excerpt) Read more at online.wsj.com ...
ping
Looks like they are running low on greater fools....
No way, it's different this time, really. Trust me. No more bubble talk OK?
I don't know what's so hard about believing that 'all good things must come to an end....' sooner or later. Why not now?
"No way, it's different this time, really. Trust me. No more bubble talk OK?"
As I type this, no doubt several Freepers are typing responses that go something like: "My uncle Louie just sold his bungalow in SF for a HUGE profit! Everything looks fine to me!"
People are wising up to the folly of interest only mortgages.
Seattle housing market prices are still racing upwards. All the liberals who destroyed California are now moving up here hoping to destroy Seattle as well.
Accelerate the cooling?
A falling market is the first derivative of the home price.
A cooling market is the second derivative of home price, since it is a lowering of the rate of increase.
An acceleration of the cooling is the fourth derivative.
That's far too many derivatives. Realtors of the World... Integrate.
nice post
Far from being a harbinger of doom, this decrease in the level of speculative buying is a healthy turn of events, I should think. Interest rates have increased more for ARM and interest only ARM loans than for conventional mortgages, which has had the effect of pricing out some of the flipping. The cheap money is not as cheap as it once was, while 30 year conventional can still be had for 5.75% with no points.
And, appreciation slipping to "only" 2% per MONTH is still very high by historical standards. I've had several years with 2% appreciation, and am doing just fine. Historical norms are in the range of 3 - 5% on average, nationally.
Mmm....yep, they are.
An investor was unable to get financing for new construction in my area (Sierra Vista, AZ) and, as a result, I am soon to be the proud owner of a new house that is being sold for $16,000 less than what the investor was going to pay.
Sweet.
We probably won't know the peak except in retrospect a couple years later. It might be happening now, or the real peak might be in a couple of years.
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