All Forum Posts by: Steven M.

I am a Land Use/Land Impact Analyst in Los Angeles. I have some clients that have expressed interest in perhaps purchasing and developing raw land in the greater Phoenix area for spec building. They are aware of the significant increase in homes prices, bidding wars of homes, low inventories, lower unemploymentm etc. etc. I thought I'd throw out some feelers here on BP and ask if anyone living there has actually seen "rare sightings" (I'm being a bit clever) and a recent surge of new homes being built for spec in and around the Phoenix metro. I was wondering if the market has reached the "extreme measure" where you actually see NEW homes going up (and more than a few) as you have driven around in the past few months. Thanks in advanced for your market intel and watchful eye.

There is no diversity of home ownership anymore. Owner ocuppiers are becoming rare. You got a huge population of "investors" a herd mentality. If you have a one dimensional market of millions of investor owned homes, too much concentration of one kind of owner, that spells trouble in my mind in untold ways. We had too much concentration and a one dimensional market already with sub-prime borrowers. We know what happend with that. Too much of one thing without diversity is not a good thing.

My concern/thoughts that there will be a big broad shake out of these "fakers" and "early/short-term dumpers" and I am feeling there are more than we think who are doing this by the seat of their pants. I just hope they all don't start dumping the market with homes in a concentrated / short span time.

From your mouth to the man upstairs ears!

I hope you are right Albert but I have fears in places espcially like Phoenix, Vegas, Miami etc has too many homes owned by one type of investor. Not everyone will have the patience, timeline, finances, efforts or whatever to own rental properties.

On another matter, are you seeing a lot of spec homes being built in Phoenix? I have some clients who are looking to buy land there. Don't have have a pulse on the building market there (if there is any). I am aware of the heated market there. Thanks!

[/b]

Thanks Jennifer. Boy, I now really gotta move out of this hole of L.A. I live in.

Where abouts in TX is this Rich?

You all make great points and are spot on but my chief concern is that we now have a one dimensional population of homeowners: Investors. That's not a good thing. That's how we all got into this mess in the first place. We had a huge population of one dimensional homeowners: sub-prime borrowers. Assuredly, these many thousands or hundreds of thousands of "investors" people buying up these cheap homes can't and aren't ALL suited nor will want to be landlords for long, nor are they ALL "buy and holders" and certainly not ALL are financially fit to be property owners.

My concern is that we have too much of one singular population of homeowners today and not all of them are going to be hanging on for 10 or 15+ years. Most will cash-out and flood the market with too many homes when they can't handle it or they see prices tick up even a bit. There is no diversity of home ownership anymore. You got a huge population of "investors" a herd mentality, and I think it's a VERY large sum of people who will want to be out of it in 5 years or less for whatever reason you can think of. This is not a good thing. As a land developer, this is not a good thing.

Mark is right, 5-15 years before prices rebound, closer to the 15 in my opinion especially in places like here in CA, NV, FL and AZ. My take eon real estate: go where the jobs are and companies are moving (like Texas) and low cost of loving.

I think we have traded in one serious problem for another and that story has yet to be told. You can't have one type of homeonwer out there or the domino effct will happen all over again.

I would like to address a concern I have about the herd-mentality of everyone and their uncle becoming "investors" and how this is likely to have very serious long term implications on housing that few have thought much about. This is my concern:

For the past several years the housing market has been predominantly made up of many thousands of cash-only investors buying up millions of cheap homes across the country. Many drawn by the allure of being real estate "moguls" and by unscrupulous real estate DVDs/Books/Seminars/Mentors/Infomercials come-ons etc. Being circumspect as I am, I ask myself this: I want to know when this country finally gets out this real estate rut in the next couple of years (assumingly), what will happen to the millions of homes owned by most of these starry-eyed investors who want out and aren't in this for the long haul.

I am in fear we will invariably have a whole new set of huge problems (not foreclosures): either the wide-eyed (many) inexperienced investors (now “landlords”) wanting to get out of being a landlord; investors wanting to simply cash-out sooner ("this is not for me") than later or for whatever reason they have to dump/sell their investment homes. Thus creating a potential flood of investor-owned homes in the market diluting home prices further. And here we go again...but now with a whole different set of real estate problems: too many investors selling their homes all at the same time in a short few year time span as soon as they see prices starting to notch up ("sell and take the money and run"). I fear avery large number of these people who got into the foreclosure buying boom will all be dumping their houses on to the market place to get out of this. Look, not all these investors today can be in it for the long haul and want to be in it for years to come. The minute prices go up and the economy picks up, like Wall Street, it will be 'sell, sell, sell'!

Seemingly, this notion will curb future home building with too many investors cashing-out of their investments flooding the market. It's inevitable. I am just concerned we are just shifting one problem (foreclosures) for another (investor dumping) in a few years from now. Am I missing something here? I don't hear much talk about this potential looming problem.

Just a thought.