[quote=SK in CV]
I guess, if you define speculator as anyone who buys property with the expectation that the value will go up, then you’re right. Speculators cornered the market. That would include those with intention of flipping, intermediate and long-term landlords and those acquiring property to occupy. So everyone who buys property is a speculator. Yep, they cornered the market.
As an aside, debt holders, including agency debt-holders and guarantors, didn’t bundle distressed assets to do a favor for investors. It wasn’t an inside deal to funnel profits to special friends. It was the only efficient way for them to liquidate distressed inventory. Those buyers are the Marshalls, Home Goods and Big Lots of the real estate business. Is Big Lots an evil blight on the retail market?[/quote]
People who buy owner-occupied homes should not be buying because they expect prices to go up. They should be buying because they want to have a home of their own — where they can paint, add-on, and change things to their own liking. They also buy because they want to control their housing costs and, if done right, so they can have a paid-off house when they retire so that they can have a lower cost of living. Additionally, they will usually want to pass something along to their heirs. That is not speculation, it’s what housing is supposed to be used for.
And you and I disagree about the need to sell REOs to these investors. It would have been far better for the REO/debt holders to sell to the highest bidders. The GSEs and other agencies should have auctioned these properties off via a website where pre-qualified bidders (Joe and Jane Sixpack) could bid for these houses. It would have accomplished multiple objectives: more owner-occupied housing, more stable neighborhoods, and more affordable housing for those who plan to actually live in these homes.
Having worked with Big Lots before as a vendor, they are great when you want to quickly get rid of inventory, but there is no doubt that the seller is getting far less than they would if they were to sell on the open market. With housing, there are other objectives than just getting rid of inventory, and I would argue that an efficient auction setup would have accomplished what they wanted — yielding more to the sellers while also offering more affordable housing to the end users.
