The National Association of Realtors, a trade organization that represents real estate brokers, said in a study being released on Tuesday that the percentage of homes bought for investment might be as high as one-quarter of the 7.7 million sold last year.

“Americans are treating real estate as a viable alternative to stocks and bonds,” said David Lereah, chief economist at the Realtors association. And some are buying at least two properties at a time.’ 3/31/05

The second home market now accounts for 38 percent of the existing housing stock and 36 percent of all homes purchased last year, NAR said.

“These aren’t second homes. You know where that down payment is coming from. People are leveraging one price asset against another on a pure momentum play. We couldn’t be at greater risk right now,” said Robert M. Campbell Campbell a San Diego-based realty broker, investor and author of “Timing The Real Estate Market”.

According to La Jolla-based DataQuick Information Systems, 37 percent of buyers in local condo conversion projects last year were nonresident owners. Conversions – in which a developer buys an apartment complex, performs cosmetic upgrades and then sells the units as condos – have become popular as prices for new homes and condos have soared.

Downtown, nearly 30 percent of new or converted condos that changed hands were bought by nonresidents last year, according to DataQuick’s analysis of property tax records. Countywide, nonresidents make up only 15 percent of owners. “We’re convinced that the number of speculative investors in the downtown market hovers in the 30 percent range,” said Gary London of The London Group, a San Diego real estate research firm. “The market has been so hot, and people have profited from the relatively small number of units put on the market relative to demand.”
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