Looking For Scapegoats In The Housing Bubble
An odd line of thinking is popping up in the media these days, as reflected in this MSNBC story on young flippers. "Chris Schartiger may sound like a professional real estate investor, but he is in fact a 25-year-old investor and one of a growing group of young real estate speculators buying condos, often before they are built, and using them to turn a fast profit."
"For me, it was a no-brainer to go into real estate with the housing market as hot as it has been recently."
Indeed, the major media has cultivated that very notion for years, even as they now act shocked at all the 'speculation' that they described as 'investing' only weeks ago. This is where the media tries to pass off the bubble to a bunch of twenty-somethings.
"But next time he’s out looking to buy a condo, Schartiger might not find a welcome mat waiting for him. Seasoned realtors are concerned that these speculators are inflating the housing bubble by creating phantom demand. In many cases, these speculators are only putting down a small deposit that they are willing to lose if the market drops sharply. That leaves the developer with a property that he could have sold to a legitimate homebuyer for a lot more money, and now has to sell for a great deal less."
So who is to blame if the developer has to sell for less? "Thousands of new condos are going up, and they are selling for upwards of $1,000 a square foot."