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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: MulhollandDrive who wrote (42367)	9/30/2005 12:36:24 PM
From: John Vosilla	Read Replies (4) \| Respond to of 306849

Speculators 'Back Out Of Deals' In Las Vegas The Street.com is reporting on speculators in Las Vegas. "Although the market is still growing, investors clearly are worried about a slowdown, as evidence points to some cooling demand from homebuyers who are looking to make a quick profit. The issue was brought to light this week when Technical Olympic USA told a major hedge fund investor Tuesday that the company had 30 cancellations last month at its Vegas properties." "About half of the cancellations were from the buyers themselves, some who lost financing, and others who were speculators deciding to back out of deals, Hunter Blankenbaker says. The other half of the cancellations were initiated by the company, which realized it had sold to more speculators than it cared to." "The issue points to the precarious situation that homebuilders face when dealing with investors who buy the homes with an eye toward turning them over relatively quickly at a higher price. 'The company is working through the last of the backlog that has investors in it. Going forward, we really do have a policy on limiting investors, if not eliminating them,' Blankenbaker says. 'We're in the business to create communities with people, and when you have investors in there you have empty homes.'" "Even though such policies look like a nice PR move, they pose some challenges, because the homebuilding industry's dirty little secret is that speculative investors have made up a good chunk of buyers over the past two years. As a homebuilder, 'Do I push [investors] away and watch my demand go down or do I pretend not to see what is going on?' asks Nick Buss, vice president with PNC Real Estate Finance, which provides financing to homebuilders." "'Vegas is hung out as the poster child of [investor activity] ,' Buss says. But looking at the market, it's not clear what's going on. 'Is it an investor or a second-home purchaser, and can you tell the difference between the two?' Buss asks." "To get a feel for how much such investor activity there's been in Vegas, do an online search for homes at www.realtor.com. Hundreds of single-family homes are available for rent, many of which are new homes built in the past two years. (Broker) Rick Storrer says most of the rentals are owned by out-of-town investors." "And now, it's taking longer for them to be rented, he says. With the rental market slumping and home price appreciations slowing, investor buying of new homes 'seems to have slacked off a little bit,' Storrer says. 'It's certainly not like it was a year ago.'" thehousingbubble2.blogspot.com