schadenfreude on house flippers

[greenman3610]

http://www.huffingtonpost.com/russell-shaw/real-estate-crash-coming_b_20235.html

"The problem for recent homebuyers is not just that prices are falling; it's that prices are fallng even as the buyers' total mortgage remains the same or even increases," he writes. Eventually, the price of the house will fall below what homeowners owe, a state that economists call negative equity.

"Homeowners with negative equity are trapped," he adds. "They can't sell - the declining market price won't cover what they owe the bank - but they will stil have to make those (often growing) monthly payments. Their only 'choice' is to cut back spending in other areas or lose the house- and everyhing they paid for it - in foreclosure."

You know what? Sometimes the only remedy for foreclosure is bankruptcy- but thanks to the new law in place voted in by Republicans heavily backed by the real-estate investor class- that option is a lot more cumbersome than it once was.

I hope no one gets foreclosed upon, and I certainly don't want to see people get hurt. But for some of you materialistic, selfish and lucky real-estate investors, you need a taste of humble pie. Maybe then you will get a sample of how the other half lives, and the real-life economic and other fears they have to deal with every day.

[SmokingJacket]

1. What a nightmare for those people who can no longer afford their

house, but can't sell either. I feel for them, and am grateful I bought a house some years ago on the cheap.

But I agree: those people who bought up property not to live in, but just to reap a quick profit, deserve to lose their shirts. It's the profit seekers that made so many neighborhoods unaffordable to ordinary people.

[blonndee]

2. That is a really nasty thng to say. Most "flippers" aren't rich.

If they were, they'd be clearing and developing, not working on one house at a time. I can't imagine what makes one think that flippers "need a taste of humble pie." How awful to take pleasure in someone else's potential financial ruin.

[Syncronaut Seven]

4. Flippers are why I can't afford a home.

They are cancer.

[Yollam]

6. They're not poor either, but they are knowing participants...

...in a speculative bubble. Are we supposed to feel sorry for people who put all their money on "red" in the casino?

I reserve my respect for people who WORK for a living, who MAKE something. Not people looking for an easy buck by slapping a coat of paint on a distressed property and waiting for the debt-and-speculation-inflated bubble to bring them a big windfall. Sorry, I wasn't raised that way.

Flippers may not be the sleaziest people our economy has to offer, but they are not what I'd like my kids to emulate, either.

[blonndee]

8. They are NOT all people "looking for an easy buck"

and a lot of them work hard to restore homes, not just slap a coat of paint and inflate the price. My dad builds new homes but he and my mom have also bought and remodeled homes in need of work and then sold them. Tell me that isn't hard work, and making something. My dad has built houses his entire working life and he works his ass off doing it. Your brush is far too broad, as both of my parents' livelihoods depend upon real estate. They are far from being greedy and materialistic--in fact, they're not even close to being able to retire, and they're only about five years away from the official retirement age.

So thanks for wishing hardship upon my hardworking family.

[Yollam]

9. I'm not wishing hardship on anyone. That's the OP.

But I don't think all that highly of house flippers in general.

If you want to live in a house, then buy it. If not, leave the "distressed" properties alone so lower-income working people can maybe afford to buy it, instead of turning yet another regular house into an unaffordable McMansion.

And you know darn well there is a whole industry built up around the easy money fast concept of house flipping. Your family is the exception to the rule - fine, but overall, flippers are one of several drivers behind the "tulip mania" of our times. When housing values plummet - and they will - it will be people who had no choice but to buy their homes with risky loans at overinflated prices who will really suffer, not flippers, who really couldn't give a fig about the homes or the neighborhoods they are transforming.

[Malikshah]

3. In South Florida it's the condo-flipping

folks buy condos pre-built, hold them for a few months, weeks, days, hours (!!!) and sell at a profit.

(Remember, the frikkin building, monstrosity on the shoreline that it is, still has YET to be built) These speculators affect the prices of all homes in the area-- even those 6 miles inward (i.e. mine) Our home has doubled in price and it's worth more than we owe (even w/ equity line)

We invested the money in the home and restructuring of debt-- most folks just rack up more debt and live off the cash cow that their home is (was...)

Party's over folks.

You don't have to go home, but ya can't stay here!

[susanna]

5. In my neck of the woods...

SOME flippers do a great deal of good.

We are in a declining neighborhood that still has a strong sense of community. Flippers can actually HELP here. They bring up properties that would have been left to the drug trade and get new families in, holding off the blight, bit by bit. So it really depends on where you live, I think.

For example, we live in a two-family flat that we bought 10 years ago in the same neighborhood I just mentioned. Its value, with no improvements, has tripled in the past ten years. We could make a quick buck by selling it, actually, and it would go quickly (rental properties don't last long here). Guess what? We are not selling.

We have lived in this house for ten years; we love it and have taken good care of it. Eventually, we hope it will provide a replacement for a pension that my job does not provide (my husband has a pension, if his job survives). To provide said income, it will need to be rented in the future. As I would never rent a home I would not live in, this house is a serious investment. Long-term, and no kidding. We are improving it, as we can afford it, without incurring new debt: a new, premium roof goes on starting tomorrow; we have replaced the plumbing, both baths and both kitchens. Next year, we will convert the whole house to forced air from gravity heating and remove asbestos with a certified contractor (it is an older home).

So be careful in lumping all real-estate investors into some "materialistic, selfish and lucky" basket. We are not all the same. So says me...this place might get rented out by 2020.

[anitar1]

7. In my area, mobile homes, [pre owned,] are selling

quickly these days. I am talking senior parks. Seems seniors are selling their homes for high prices and then buying a used mobile home, modestly priced. No doubt saving their profit for their future needs. This has driven prices up, over the last 6 or 7 months.