A New Housing Bubble Will Last Only As Long As Investors Do

What percentage of home purchases are driven by speculating investors? Will this segment of buyers carry a long term surge in housing sales and prices? I don’t think so. Investors will stop investing when they discover that actually home buyers who want to live in the homes they buy are not as plentiful as they hoped.

This may not take long. Historic shrinking interest rates have not dislodged a lot of buyers from sitting it out. Many have damaged credit and cannot qualify for the better rates and deals. How much of the market is being driven by cash buyer investors, etc? 

When people don’t arrive in numbers to purchase these investor homes, the market will slip back toward an amassing of assets that won’t sell.

A New Housing Bubble by investors

That is the best outcome because a new housing bubble is not good for the US economy.

Maybe all these investors intend to rent these homes?

Are we destined to become a nation of renters, lining the pockets of cash investors?

Real Estate values are what the owners are willing to pay. Homes in Palm Beach FL call for higher prices than the same homes in say, the southwestern part of North Carolina. Eventually, someone has to decide the price is right for staying and living in a home or the entire thing grinds to a halt.

read more