Investors Retreat From Hottest Markets(December 7, 2005) -- While residential property investment continues to thrive in many parts of the country, investor activity is waning in what had been some of the hottest markets for housing speculation, including Las Vegas, Miami, and certain California destinations. A slowdown in the pace of home appreciation has made it more difficult for investors to turn a fast profit, prompting some to reconsider their strategies. The signs include: investors owning up to 30 percent of properties for sale in the Phoenix area, increasing cancellation rates for new condominium units in the District of Columbia and Florida, and a nearly 50-percent drop in the number of investors purchasing property in San Diego. Experts say the trend is certain to accentuate any downturn in home sales. Without the increased contributions of investors to the housing market over the past two years, according to Fannie Mae chief economist David Berson, home sales probably would have been more than 7 percent lower. He expects that the pullback in investor activity will play heavily into the anticipated 10.4-percent decline in home sales over the coming two years.
Source: Wall Street Journal (12/07/05); Simon, Ruth
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