Does Real Estate Speculation Have an Effect on the Current Housing Market?

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Real Estate Marketing Insider's Tobias Nergarden remarks on the question of whether or not speculators are going to be responsible for salvaging the low housing market.

Tobias Nergarden of Real Estate Marketing Insider (REMI) issued his observations on the question raised over whether the real estate market will be rescued by the work of real estate speculators today, and his expert opinion is that this will help home sellers because if speculators are buying homes at a steady rate, sellers may be able to find buyers easier especially if sellers are advertising for real estate they have on the market.

Sy Harding of Seeking Alpha raised the question over whether real estate speculation helped create the housing bubble that was, in part, responsible for the 2008 financial crisis. Now that many people are suspecting that housing prices have bottomed out, speculation is a topic of discussion. This is because private property sales are up, which is boosting the economy, partially because speculation has again become popular. Studies by the National Organization of Realtors have shown that 25% of current home sales are to real estate investors. This is seemingly keeping housing prices from going any lower.

Real estate speculation is the idea of buying property based solely on the rising and falling of prices instead of the attributes of a particular piece of property. The idea is to buy when prices are dipping, and sell the property shortly afterward when prices rise, even slightly. This can be a very risky activity, as demonstrated with the 2008 financial crisis, when housing prices fell, forcing many speculators to default on their loans.

The 2008 financial crisis was major downturn in the global economy that put not only many financial institutions at risk of disappearing completely, but also caused a huge rise in unemployment. Much of the damage to the banking industry was due to the collapse of the housing bubble, when property prices reached unsustainable levels in 2006. Although many people claim that the housing bubble was the sole cause of the crisis, experts disagree and argue that the issue is far more complex.

The National Association of Realtors (NAR) is a powerful organization with a significant amount of political clout. The purpose of NAR is to protect the interests of realtors and anyone else involved in the real estate industry. One of the most important things done by the NAR is to govern the use of Multiple Listing Services, which allows brokers and realtors to share information on various properties.

Real Estate Marketing Insider today commented on the idea that ongoing real estate speculation is not only sustaining a bottoming of housing prices, but will eventually cause prices to rise, which may in the long run help the housing industry.

About Real Estate Marketing Insider:
Real Estate Marketing Insider is a professional publication that helps real estate professionals to understand current market trends, sales strategies, and events relating to real estate marketing.

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