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How Rising House Prices May Actually Stall the Recovery


By bgamall4   Follow   Fri, 30 Nov 2012, 2:28am PST   667 views   8 comments
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http://finance.yahoo.com/news/rising-home-prices-may-actually-173023075.html I have been talking about this. Finally, even CNBC is concerned about this issue. Hedge funds ruining everything!

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Goran_K   Fri, 30 Nov 2012, 2:33am PST   Share   Quote   Permalink   Like (2)   Dislike (1)     Comment 1

Investors cannot sustain a recovery because they are basically shock troops. They go in, do their speculating, and then take their returns. Very few investors are in it for the long term (5+ years).

Housing will return to normalcy (as much as it can in this environment) when owner occupy buyers come back to the market. In Las Vegas, that was only 14% of buyers in October (compare that to 52% investor purchases).

I never thought I'd see the day when people who actually intend to live in the home become the minority in the housing market.

wave9x   Fri, 30 Nov 2012, 2:34am PST   Share   Quote   Permalink   Like   Dislike     Comment 2

I have seen this mentioned here and there, that investors are driving housing prices up. Are there any actual facts or figures backing this up or is it just speculation? I have anecdotal evidence it is true in my area but that's it.

Goran_K   Fri, 30 Nov 2012, 2:41am PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 3

wave9x says

Are there any actual facts or figures backing this up or is it just speculation

I definitely think it's just speculation.

iwog   Fri, 30 Nov 2012, 4:00am PST   Share   Quote   Permalink   Like   Dislike     Comment 4

Nawww...no chance.

Rising house prices will help the building industries, the lenders will have a party, and home "owners" will jump back into HELOCs and go shopping.

Obviously it's not sustainable but will certainly fuel years worth of excess if not a full decade.

We've transitioned into a boom-bust economic pattern that is far more similar to the 19th century than anything since World War II.

bmwman91   Fri, 30 Nov 2012, 5:30am PST   Share   Quote   Permalink   Like   Dislike     Comment 5

iwog says

Nawww...no chance.

Rising house prices will help the building industries, the lenders will have a party, and home "owners" will jump back into HELOCs and go shopping.

Obviously it's not sustainable but will certainly fuel years worth of excess if not a full decade.

We've transitioned into a boom-bust economic pattern that is far more similar to the 19th century than anything since World War II.

Agreed.

Too many people are either unaware of this or just don't think that it is something that they need to care about, and the private entities that basically control the government delight in it because it is a very effective wealth transfer mechanism for them. I guess it will take a few more cycles for things to get bad enough for people to get tired of it and demand/force change. Hopefully they will be able to when that point comes.

bmwman91   Fri, 30 Nov 2012, 6:21am PST   Share   Quote   Permalink   Like   Dislike     Comment 6

Yeah, it's great for some people. Sucks for the rest of us suckers that just want to work a job and live their lives in peace.

REpro   Fri, 30 Nov 2012, 7:30am PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 7

Mentality of Institutional Investors is to make money as fast as possible, and a lot of them. They don’t like to keep capital in fixed asset too long. Fast turn over brings the highest return. Soon they will realize that single family investments do not produce better return on money then stock market. Yet, sells is not just a click on the button.

bgamall4   Fri, 30 Nov 2012, 12:31pm PST   Share   Quote   Permalink   Like   Dislike     Comment 8

wave9x says

I have seen this mentioned here and there, that investors are driving housing prices up. Are there any actual facts or figures backing this up or is it just speculation? I have anecdotal evidence it is true in my area but that's it.

Yes, 50 percent of August sales were cash only in Las Vegas and 45 percent of the sales were cash only in Phoenix. And I wrote this article about it:

http://www.businessinsider.com/the-1-percent-is-buying-up-all-the-real-estate-beware-of-tom-lee-of-jpm-2012-5

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