S&P 500
7,615.40
-0.09%
Dow Jones
51,329.00
-0.08%
Nasdaq 100
30,646.40
-0.23%
Russell 2000
2,930.28
-0.10%
FTSE 100
10,374.60
-0.13%
Nikkei 225
68,514.20
+1.50%

Housing

Housing Speculation On The Rise

Photo of Douglas A. McIntyre
By Douglas A. McIntyre Updated Published

According to a recent survey conducted by Move.com the some people interested in purchasing real estate as an investment has doubled since March 2009.  The results show that this growth has been driven by falling housing prices and increased foreclosures.  According to the survey the number of homebuyers that plan to buy an investment property has risen to 12.1%.  A significant number of these purchases are happening in the foreclosure market, with 42% of purchases of foreclosed homes being speculative.

Invalid Image
Speculative buying in the housing market is an important force in the effort to put a bottom on home prices.  However, the number of homes available on the foreclosure market continues to rise.  Areas of the country that were the biggest drivers of the housing boom are now seeing record levels of home foreclosures.  In September, home foreclosures reached a record level of 8,800, up 90% from a year ago. Without adequate funding, it’s almost certain that the buying power of speculators will be insufficient to sop up the increasing number of foreclosed homes hitting the market.

Even if the number of people investing in real estate continues to rise, their presence in the housing market may cause some bumps as the market begins its recovery.  The Move.com survey indicates that close to 60% of speculators expect to buy their foreclosed homes for around 20% below value.  If this turns out to be the case, sellers of foreclosed homes will probably in a position to sell as a profit well before other market participants.  They are likely to turn over real estate quickly for a rapid return. Depending on how large of a portion of the market speculators represent, their selling may have a depressing effect on the market just as recovery gets underway.

Garrett W. McIntyre

Follow 24/7 Wall St. on Google
Photo of Douglas A. McIntyre
About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

Continue Reading

Douglas A. McIntyre |

The Interest In Buying Foreclosures Craters

People do not have an interest in buying homes in foreclosure at anywhere near the level that they did earlier…

Mike Sauter |

The Best Cities to Flip a House

House flipping’s status as an aspirational American pastime took some hits during the recession but, like disco or SUVs, it…

Douglas A. McIntyre |

Foreclosure Backlog Hits 1.7 Million Homes

There are 1.7 million homes on the market which have gone through the foreclosure process. The number is at the…

Douglas A. McIntyre |

How Foreclosures Will Save Housing: 28% Of Homes Sold In Q1 In Foreclosure

Foreclosures are the blight that has spread through the real estate market and driven prices to decade lows. The drop…

Douglas A. McIntyre |

Foreclosures Make Huge Move Up In July

The plague of foreclosures is still overrunning the US real estate market, and the situation may actually be getting worse.…

Thomas Frohlich |

America’s Hottest Housing Markets

ThinkstockThe nation’s housing market continues to show a promising turnaround. Home prices rose by more than 5% between the second…

Douglas A. McIntyre |

Foreclosures Are About 25% Of Q2 Home Sales

Foreclosed home sales were 24% of all transactions in the second quarter of 2010. The average price of a foreclosed…

Douglas A. McIntyre |

As Foreclosures Rise, Worst Markets Remain Badly Damaged

All real estate problems are local. RealtyTrac reported that foreclosure starts in May rose for the first time since January…

Douglas A. McIntyre |

More Housing Trouble as Banks Seek to Sell Foreclosed Inventory

Any home sale is a good one in the current market, but banks’ sales of foreclosed properties bring down prices.…

Top Gaining Stocks

Hewlett Packard Enterprise
HPE • Vol: 153,197,465
Enphase Energy
ENPH • Vol: 8,360,053
Corning
GLW • Vol: 18,152,646
Alexandria Real Estate Equities
ARE • Vol: 4,337,015
Aptiv
APTV • Vol: 6,761,325

Top Losing Stocks

Trade Desk
TTD • Vol: 21,905,513
Intuit
INTU • Vol: 7,383,018
Coterra Energy
CTRA • Vol: 73,319,495
Cboe Global Markets
CBOE • Vol: 5,000,011
HP
HPQ • Vol: 29,259,826