"Slaughter of the housing speculators"
From Prudentbear.com
"These days, “Get Rich Quick” has been the mantra for too many people trying to cash in while buying real estate speculatively. With so much “free” money still flowing from the Federal Reserve, it has become a real estate speculator’s dream world. These so called speculators have purchased over 3 million residences, practically with their eyes closed, with the sole intention of flipping them like pancakes to the next guy, marked up 25 percent or more. However, signs are beginning to appear that indicate this game of getting rich quick may soon be over.
Less than 20 percent of Californians can now afford a home with a fixed rate mortgage. The Federal Reserve is still raising variable interest rates. In 2004, when the housing bubble was really gathering steam, the National Association of Realtors calculated that 23 percent of homes purchased were for investment, and 13 percent were for second homes. With housing prices in some markets rising 20 to 40 percent in the past year – and 50 to 100 percent or more since 2000 – buying a house on spec looked like a sure thing to make a quick profit. But this housing deck of cards, in an already over-heated market, could have a domino affect. Why?"
Continue...
"These days, “Get Rich Quick” has been the mantra for too many people trying to cash in while buying real estate speculatively. With so much “free” money still flowing from the Federal Reserve, it has become a real estate speculator’s dream world. These so called speculators have purchased over 3 million residences, practically with their eyes closed, with the sole intention of flipping them like pancakes to the next guy, marked up 25 percent or more. However, signs are beginning to appear that indicate this game of getting rich quick may soon be over.
Less than 20 percent of Californians can now afford a home with a fixed rate mortgage. The Federal Reserve is still raising variable interest rates. In 2004, when the housing bubble was really gathering steam, the National Association of Realtors calculated that 23 percent of homes purchased were for investment, and 13 percent were for second homes. With housing prices in some markets rising 20 to 40 percent in the past year – and 50 to 100 percent or more since 2000 – buying a house on spec looked like a sure thing to make a quick profit. But this housing deck of cards, in an already over-heated market, could have a domino affect. Why?"
Continue...
posted by Little_Silvered at 7:40 PM
0 Comments:
Post a Comment
<< Home