First of all, let me make this perfectly clear, I am NOT against investors. Real estate investors play a vital role in our market. I do have a problem with speculators, those that add no value between time of purchase and sale. Speculators as I am defining them are those that purchase pre-construction property with the idea that when the property is complete that they will list and make a profit.

These speculators have no intention of living in the property or renting the property out. Just like stocks, housing is suppose to be a long term investment 3-5 years. What inevitibly happens in a hot market is someone comes and speculatively purchases property driving home prices up, sometimes drastically, and ultimately pricing long-term owner/occupiers out of the market.

Additionally, it would be an interesting study to find out how many people purchasing homes for speculation are identifying themselves as investors for the purpose of obtaining a loan? Correct me if i am wrong, but isn't it mortgage fraud to lie to the lender with regards to your housing status?

In some areas in the United States in new homes construction up to 50% of the buyers are investors.  Does this not strike anyone as really out-of-proportion? I have little sympathy for those that get burnt speculating on preconstruction ... your speculation is driving housing out of the reach of many of those that want to buy and live in the property.

As an industry we need to better police ourselves or we will be policed by others. As agents we need to understand that we are not investment advisers. If you are helping speculators find property to buy preconstruction and sell, don't be surprised if a lawyer comes knocking on your door if the transaction turns unprofitable ... if you don't believe me look at what happened on Wall Street.

Jason Vombaur- The "J" Team

 
This post has been included in Washington Real Estate News

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Jason Vombaur

Vancouver, WA

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