Out-of-state speculators ruin local markets - Posted by SJO
Posted by SJO on May 18, 2006 at 12:38:41:
We’ve talked about it many times on this board. Out-of-state investors target a city or town and start buying-up everything they can get their hands on. Of course this drives prices up and up as more and more of the local people are priced out of the market.
And when it’s all said and done, prices are so high and inventories so large that the local market stagnates and must go through a very long and painful adjustment period.
Yes, it happened in Phoenix, and now we have near record inventories. But it also happened in several other cities, incuding Vegas. And now we see that the speculators are looking at other markets in Ohio, Idaho, Texas and New Mexico.
I sold houses to speculators from New York and Calif last year, and at the time I thought it was great. Easy money and quick transactions. And at the time I enjoyed the incredible appreciation and market frenzy being caused by these speculators. As a matter of fact, for the first time in our history, some new home builders would not allow out-of-state speculators to buy their houses. Locals weren’t even getting a chance to buy new houses there were so many speculators snapping them up. But looking back now, I wish they had never targeted Phoenix.
What are WE left with now that they have come and gone? We live here because we love it here. We care about our city. They don’t care about it. They use it for financial gain, and couldn’t care less about it otherwise. They have left prices artificially inflated, and now mid-low class families cannot afford to buy a house or upgrade as their family grows.
Others who would like to move are having trouble selling. And as for me…yes I made money during the frenzy, but now have to be extremely careful in this “correcting” market. My business has been very negatively impacted.
I am convinced that if the speculators had never targeted Phoenix, we would have continued with near normal appreciation and would not need to correct or realign with current supply vs. demand.
When did this travelling band of speculators get so powerful? I know out-of-state investors have always bought property in Phoenix. But I’ve never seen so many of them, all at once, like thewy were in the past few years. It’s almost like they are organized in some way, and move together in packs. Probably not, but it just seems that way.
For those of you living in cities that are being targeted now, look out. Things will change rapidly in your market, and in the end it won’t be pretty.
If you are one of these speculators, I hope you realize the impact you are having on so many people in the markets you ravage.