Real Estate Speculation Expected to Rise

As with any recession, at some point the direction of prices is going to change. In most cases, real estate speculators purchase at low prices so they can later sell at a higher price. Currently, speculators are most likely to be sellers, not buyers, since home prices are already high, and are expected to decrease in 2021 as sales volume continues to drop. Once prices start dropping, as buyers are waiting for prices to bottom out, sellers are looking to sell as quickly as possible to get the most money. With more seller willingness, buyer speculators are also coming in 2021.

Given the current high buyer demand, a sudden increase in seller willingness is going to look like the beginning of a recovery. Don’t be fooled by this. Speculators are generally people who can afford to be wrong. This increase in activity is not going to be a result of a stabilizing economy, but of opportunists who were largely unaffected by the recession wanting quick sales. Speculators generally only constitute 20% of buyers. For an actual recovery, the rest of the populace needs a stable income. That means job recovery, which isn’t expected until 2023.

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More: https://journal.firsttuesday.us/prepare-now-for-the-return-of-real-estate-speculators/73795/

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