Speculation & Investor Activity

[Pamela Crowley (Florida)]

In your opinion and/or experience, what has real estate speculation and investor activity contributed to the real estate market and how has it affected it?


Please keep your replies directed to this question. General answers and/or specific examples would be good here.

Keep in mind that there are (or might be) more specific questions regarding this issue in other questions. You might want to read through each thread question before starting your answers

 

[Tim Hicks (Texas)]

In my market, the real estate investor has driven the multi-family market up the past two years. However, there have been areas that showed dramatic increases and then the market then corrected itself due to an over-inflated investment market.

 

[Edd Gillespie]

Speculation and investor activity is essential to the capitalisticreal estate market-always has been and forever will be.

Saw a really sick local market here post S&L. Slumped along long after other places started to recover, then the MB's (who in thise days were not as plentiful or voracious as they are today) "discovered" our neck of the woods. In five years prices paid for hosing doubled. No new jobs, no new people, just investor money and active MB's did that.

Now almost every local bank does MB. We're not up with the big cities yet, but that gives us room to grow. We need that investor money. If we had jobs then we'd get specs too.

 

[Restrain]

In Las Vegas, builders were selling to investors, not one, not two, but TEN homes at a closing. Housing prices were skyrocketing. Inflation was not driven by actual demand but "exhuberance chacing the expectance of excess profits". The major builder in the area realized that homeowners were being priced out by these actions and cut their prices by 25%. Currently, whole streets are standing empty as investors are trying to recoup or at least cut their losses.

Investors, while part of the market, can create irrational markets not driven by normal demand and supply.

 

[Mister Ed]

The only law suits our company ever faced were over investment properties. The appraisers who did those appraisals are long gone.

We no longer do them. They are not worth the hassles to us.... Too much room for error and/or pressure from the investor to inflate values, etc.

 

[murray stroupe]

RE; Investors Business

Speculation and investor activity is essential to the capitalisticreal estate market-always has been and forever will be.

Saw a really sick local market here post S&L. Slumped along long after other places started to recover, then the MB's (who in thise days were not as plentiful or voracious as they are today) "discovered" our neck of the woods. In five years prices paid for hosing doubled. No new jobs, no new people, just investor money and active MB's did that.

Now almost every local bank does MB. We're not up with the big cities yet, but that gives us room to grow. We need that investor money. If we had jobs then we'd get specs too.

=================
Good points Eddie;

Honest Investors, are exceedingly helpful in any market, they help;
bankers ,appraisors, charity,church synagog, Realtors, pay taxes,
simply an important part of the free interprize system.

Investors Business Daily newspaper is more practical than most any newspaper and much more balanced and accurate.

Dishonest investors , are harmful just like crooked MB , crooked appraisors, crooked mainstream media are.