Wonder why your home isn't selling?
April 22, 2006
This article is featured on the front page of the Washington Post this morning (image added by us):
BOTTOM LINE: The result of investors dumping homes in the real estate market is rising inventory, homes that are not selling and downward pressure on prices to get out...Doors Close for Real Estate Speculators
After Pushing Up Prices, Investors Are Left Holding Too Many Homes
By Kirstin Downey
Washington Post Staff Writer
Saturday, April 22, 2006; Page A01
Investors who sought quick profits buying and selling real estate in the Washington region are in full retreat, dampening demand for homes, most notably for condos.
What is becoming apparent, market watchers say, is how big a part speculators played in the region's real estate boom of the past few years. Not just condominiums, but also townhouses and single-family houses, were snapped up by investors using no-money-down financing and non-traditional loans. They helped send prices soaring at unprecedented rates. And now many are trying to sell, or rent at a loss. Some may eventually dump properties at low prices to get rid of them. That could weigh down values for everyone.
Sales of new condos fell 43 percent in the first quarter of the year, compared with the first quarter of 2005, according to one report, and there are almost four times as many existing condos for sale than last year.
"We think the softness of the market is largely due to the pulling out of investors," said Gopal Ahluwalia, staff vice president for research at the National Association of Home Builders. "They have not only pulled back, they are canceling purchases."
... read the entire article here.
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It was an interesting article. While this one focused primarily on condo's...it is definitely across all market segments SFH, townhouse, and condo. Case in point...Port Potomac in Woodbridge is crawling with investor inventory of SFH's. I just have to laugh when investors attempt to get $100,000 markups on homes they just purchased in January 06.
At some point sellers are going to have to significantly adjust their expectations. This article will only heighten the fears for those not wanting to buy at the top. Until the investor inventory gets worked off...it is going to be a pretty ugly market...and at current sales rates it isn't going to be resolved this year...
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