Loan business is slowing...so brokers go speculating
In one office, the broker was all happy because they were buying another property! The house they bought in Phoenix has "gone up $200,000 in 6 months!" so the broker was going to buy another "cheap" house in the 250-280 range. They bought their current house for about 375k or so. Another house in the neighborhood just went on the market for 620-640k. So the broker put theirs on the market to sell in the high 500's. Their house is nicer than the 600k one...so they figure buyers will see the price tag on that house, then see their house as a "great deal". They haven't sold it yet...but "it won't be any problem". The broker told me that they can't wait for 2007, because they are going to keep buying properties with the equity...and flip them every 6 months for the next year or so. WOW! I wish I had thought of that. I just nodded, smiled, and wished them luck.
I didn't even bother bringing up the staggering increase in inventory of over 24,000 properties. I told them a while back to be careful with the Phoenix market...but they "proved" me wrong with the 200k "gain" in 6-months. Oh well. It will be interesting to see how it all pans out. Maybe I'm totally wrong and property will continue to skyrocked people into millionairre status by flipping houses for another 12-24 months.....or maybe not.
THEN I went to another office where both of the brokers were out of town. They had flown to Texas to buy some investment property. I think the property that they are buying can actually be rented at break-even, or maybe just a little bit one way or the other. I don't know all the details, but it is just interesting that because the "loan business" is slowing down some, that some brokers are starting to speculate on real estate at this point in the game.
That reminds me...the first broker thinks they are getting "good deals" because people are getting hesitant around the holidays, and they want to get in before things take off in the spring again.
What do you think?!?!?!?!?