House flipping
I remain convinced that, broadly speaking, housing is in
a sustainable recovery. But I can't help but notice the return of house-flipping
seminars, bidding wars and the idea that a house is an investment that can make
a quick profit with minimal risk.
Consider that house flipping in
California is back to 2005 levels, according to a recent Wall Street Journal
report. Not good.
Thanks to very tight supply and weak demand, the
dynamics have strongly favored sellers -- for now. That has allowed speculators
to creep in and start treating real estate like a short-term investment again.
Properties across the U.S. differ widely, and each area has its own
challenges and opportunities. But it is increasingly clear that the areas hit
hardest by the housing downturn could be ground zero for another real estate
bubble should the flippers throw in the towel. Consider that more than 50% of
real estate transactions in Las Vegas, for instance, continue to be all-cash
purchases, and a staggering 1 in 10 sales are to foreign investors.
Regions that have stabilized thanks to a slowly mending economy and
organic demand are one thing. But house-flippers in speculative markets better
watch out.
-Jeff Reeves; 415-439-6400; [email protected]
I remain convinced that, broadly speaking, housing is in
a sustainable recovery. But I can't help but notice the return of house-flipping
seminars, bidding wars and the idea that a house is an investment that can make
a quick profit with minimal risk.
Consider that house flipping in
California is back to 2005 levels, according to a recent Wall Street Journal
report. Not good.
Thanks to very tight supply and weak demand, the
dynamics have strongly favored sellers -- for now. That has allowed speculators
to creep in and start treating real estate like a short-term investment again.
Properties across the U.S. differ widely, and each area has its own
challenges and opportunities. But it is increasingly clear that the areas hit
hardest by the housing downturn could be ground zero for another real estate
bubble should the flippers throw in the towel. Consider that more than 50% of
real estate transactions in Las Vegas, for instance, continue to be all-cash
purchases, and a staggering 1 in 10 sales are to foreign investors.
Regions that have stabilized thanks to a slowly mending economy and
organic demand are one thing. But house-flippers in speculative markets better
watch out.
-Jeff Reeves; 415-439-6400; [email protected]
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