Flippers: Still at It! (and I don't mean da dolphins) (price, properties)

[StaffSgt]

Moderator cut: name calling

Flippers Rule
“You don’t have it (REO properties) in strong hands, you have flippers,” said Shiller, who helped create the S&P/Case Shiller real estate price indexes. “These speculators are preventing the market from crashing now, and when they get out it could fall again.”

Bloomberg.com: Worldwide

[cohdane]

I'm seeing that in my area. We're looking in a relatively small neighborhood and 3-5 properties have been bought and relisted (at a higher price) within the last year. Happily* none of those properties have sold. And one has dropped it's price to the point where there won't be any chance for a profit. People who bought homes they didn't want to live in have done a lot of damage out here. El-cheapo remodels, wonderful old homes destroyed by neglect and burst pipes, horrendous McMansions that no one wants to buy. The sooner these amateurs are out of the market, the better. I'll be reluctant to buy until I see their activity drop off. *I'm not happy when homeowners suffer or sell at a loss-- but speculators get no sympathy from me.

[chet everett]

Shiller is an odd bird. He seems to acknowledge there is really very little that can be done to either "protect the stupid from themselves" or even to insulate the broader society from the negative consequences of their irrationality, yet he does strive to use the financial markets underpinnings to both create stronger financial institutions AND design more better forms of social insurance. http://www.publicpolicy.umd.edu/IPPP...Exuberance.htm

Good luck -- I prefer a much more succinct maxim, often seen over desks of active finacial traders: Bulls make money, bears make money, PIGS get slaughtered.

In the present context, it is entirely plausible that an investor could purchase a damaged home at a deep discount in otherwise attractive area, make some cost effective repairs and sell it for a resonable profit. Thus the "bearish" seller would feel OK, the bullish investor could do fine.

OTOH a "pig" would underpay for the home, harming the seller, yet be unable to find ANY buyers and GET SLAUGHTERED end up in default himself.

No PhD, but I think Shiller and I may have more in common than either of would admit on the surface...