Speculators who were looking to make some quick and easy cash by ‘flipping’ properties are seeing bad times all over the US, but it’s particularly bad in Clark County Nevada (Las Vegas) – One in every 30 houses there started the foreclosure process last year.
More than other states hit by the mortgage lending crunch, the high foreclosure rate in Nevada, California and Florida was driven by speculation, said Rick Sharga, vice president of marketing for Realty Trac. â€œIt was a combustible mix of risky loans and risky real estate deals,â€ he said.
Russ Valone, the chief executive of research firm MarketPointe Realty Advisors, said speculators in San Diego were putting deposits on downtown condo units under construction, assuming they could sell them at a profit when they were finished.
â€œThere were guys out there that were rolling the dice just as if they were going to Las Vegas,â€ Valone said.
When the market slowed, many buyers forfeited their deposits, or let their properties get repossessed by the banks. As a result, the inventory of unoccupied condo units downtown since early 2005 has soared fivefold, he said.
That article also mentions that predictions of a 1% price decline across the US in the next year has pretty much killed ‘flipping for a profit’ in these previously frothy markets.