Condo Flipping "Sport" Could Meltdown
Inman News has a story up about buying condo's as a "sport". "A $609,000 'pile of dirt' in Florida that ended up selling as a $740,000 real estate deal. 'It's always a worry when you start talking about one-half million dollars like it's nothing. But we're not talking about a (dot-com) or an Enron or something like that.' Real estate is a tangible thing, he said. 'People need to live some place. They need four walls and a roof.'"
Then there is this Prudential report. "The potential fallout from a meltdown in the condo market is unquestionably one of the biggest risks facing the real estate industry. the effects of a shock would reverberate throughout the industry..it could disrupt the multifamily debt markets."
"Loan delinquencies could increase sharply, and liquidity in the debt markets could dry up very quickly, at least until lenders can assess the impact of falling property values."
Even the Inman piece has some flippers remorse. "'I haven't been in there that long. I don't know where this is going.' People may not realize what's happening 'until we all get burned.It's just like the stock market in the late 1990s. Now, we're all in real estate. Real estate's the new stock market. Which we all know can't last forever.'"