by Calculated Risk on 6/13/2011 09:04:00 AM

A couple of articles ...
• From the Sacramento Bee: Real estate scavengers flip foreclosed homes in Sacramento area (ht picosec)

As more Sacramento homes slip into foreclosure, scores of house "flippers" have swooped in to buy properties ... and sell them for quick profits.

... if the price is right, investors pounce. They snag a fifth of foreclosures in the region, according to figures from real estate tracking firm DataQuick Information Systems.

Eighty percent of these homes will be flipped within a year. Typically, they will fetch about $30,000 – or 20 percent – more than the flipper paid.

Flippers often pay cash and buy starter or midlevel homes.

This is very different than "flippers" during the boom. Back then flippers used highly leveraged financing and held the properties off the market for some time (a type of storage). These new flippers usually pay cash and try to sell as quickly as possible.

For a discussion of speculation and storage, see my April 2005 post: Speculation is the Key

• And from the TimesUnion: To buy, or not to buy, a home? (ht Justin)

[F]our years after the bubble began losing air, the challenge is to determine where the market is headed. Is the worst behind us? Or is the bubble continuing to deflate?

Many potential buyers, locally and nationally, seem convinced of the latter. ... Brokers say attitudes among potential buyers have changed. Once the desire to own a home burned red-hot at any price, in part because housing was seen as a way to quickly build a nest egg.

Now, the mood toward housing seems almost indifferent, agents say, despite low interest rates and dramatically improved conditions for buyers.

Yes - in 2005 it seemed everyone was getting rich, and people didn't want to be left behind. Besides house prices never went down (Greenspan said so), and it was easy to get a loan - even with no income and no job - and buy a home with no money down. What could go wrong?

Weekend:
• Summary for Week Ending June 10th
• Schedule for Week of June 12th
• Updated List: Ranking Economic Data