Out-of-state speculators ruin local markets - Posted by SJO

Posted by John Vosilla on May 19, 2006 at 11:27:11:

Check out Houston exhurbs. They build like 60K+ homes a year there. Population and job growth is amazing so much better for long term rentals. Way to big to get Californicated which is why the hot money went to places like El Paso and Salt Lake City.

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.

Re: Out-of-state speculators ruin local markets - Posted by DP (ON)

Posted by DP (ON) on May 21, 2006 at 11:22:05:

Lemme get this straight… you happily participated in the ‘problem’, ready and willing to take the money when it was flowing free and easy. And now you’re complaining about the consequences of your actions?

Instead of taking responsibility for your mistakes and growing in maturity; you’re just crying like a baby who’s upset they can’t eat ice cream for 3 meals a day without getting a tummy ache.

Re: Out-of-state speculators ruin local markets - Posted by Gene

Posted by Gene on May 18, 2006 at 17:18:57:

I believe liquidity was the main driver of this wave of speculation. Once it started, the greed fed on itself.

If you watch the markets and play the trends you can get rewarded handsomely, but if you don’t you can ran over.

In the short term, things are going to be a bit crazy…some areas will see price declines and a bunch of folks will get hurt. But in the longterm your community might be better off.

In most areas that were hot with appreciation, builders went crazy. The added inventory will ensure affordable housing in the long term.

I Love Speculators - Posted by Jimmy

Posted by Jimmy on May 18, 2006 at 13:59:06:

Send them to East TX !!!

speculators who are (a) right, and (b) early—are rewarded handsomely.

speculators who are wrong get smoked.

speculators who are (a) right, but (b) late, get smoked.

Re: I Love Speculators - Posted by JC

Posted by JC on May 18, 2006 at 15:34:20:

What areas/cities in East TX? I am looking for cashflow not appreciation.