Are RE Investors Running for the Exits?
Are real estate "investors" (you know, your local postman, barber, house-wife, janitor, sales clerk, etc. RE "geniuses") running for the proverbial exits? Given how RE is Marin's only real "industry" and is such a hobby here among the wannabes, the current trends are disturbing to say the least. Houses sitting on the market, crashing condo sales, reduced sales prices, vacancies, low rent vs. carrying costs, cash offers to buyers, even cars given to buyers (I've seen examples of this here in Marin ranging from Jaguars to VW Beetles). Sound familiar? Well, we'll see...
Some choice quotes:
Some choice quotes:
"Individuals are pulling back from buying homes and condos as an investment, in a move that could accelerate the cooling of the housing market."Some more choice quotes:
"...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."
"Sandra Geary, a broker in California's Sonoma County, was running seminars that drew as many as 200 would-be investors. She's also taken California investors on out-of-state home-buying expeditions to Arizona, Idaho, Nevada and Oregon and bought more than 30 rental properties for her own portfolio. But in recent months, her investor sales have fallen more than 75%."
"Some brokers are advising speculators to put away their checkbooks. "I'm telling people who want to buy new construction to flip it that the gig is up," says Frank Borges LLosa, a real-estate agent in Arlington, Va."
"Investors who helped fuel the U.S. housing boom by bidding up prices are now so desperate for buyers that some are offering cash bonuses..."
"Inventories of unsold single-family homes are near a 17-year high as demand from speculators wanes and mortgage rates have risen more than a percentage point from a four-decade low reached in 2003."
""We're at the turning point,'' says Susan Wachter, professor of real estate at the University of Pennsylvania in Philadelphia. ``We're all hoping for a flat market, and not a plummeting market.''"
"Declining demand from speculators will help slow home sales to an annualized 6.77 million this quarter from a record 7.24 million in the third quarter, says David Berson, chief economist at Fannie Mae. ``Perhaps investors have decided this is the right time to move out of housing and into other assets,'' he says."
""The mom-and-pop investors are unloading their properties,'' says Greg Sullivan, 42, a partner in Cash Now Vegas LLC, a Las Vegas company that buys homes from investors and resells them. ``When home values were going up $10,000 a month, everyone wanted in. Now, all those properties are sitting empty.''"
"Some experts say home prices in previously hot markets such as Boston and Washington will fall in 2006. Gramley foresees "declines in home prices of maybe 10, 15 or 20 percent on both coasts on a year-over-year basis.''"