I've been in constrution/property mangement for about 19 years, I own rentals, and used to flip as well. The banks are holding properties longer, they can't simply flood the all ready over supplied markets without hurting themselves even more. If I bought 3 homes today, 2 would simply be rental homes for 2-3 years and the one with the most potentail profit would be on the market in 2-3 months, just lke any other hedge out there. Times have changed, it used to be like scalping an uptrend, with everyone getting approvals on loans, prices just keep going in the right direction, now it more like postion trading based off the fundalmentals. The Flipping BIZ is not for rookies anymore, u have to be able to put a realistic budget togather, and control costs very tightly, and have it done on time, trust me it's much more complicted then most think. It's like any other biz most will fail, u just hear about the ones who succeed
Of course this website is about speculation. But there is a difference, and it is that exchanges hold you responsible. So for example if I buy a stock and loose money it is my money that is lost. Imagine for a moment that there was no exchange. We would have major issues with a functioning market. When somebody flips a house it is not on an exchange and it is done on leverage and it is not tracked on how many houses you can and cannot flip. How would I change things? Do things like they are in Canada. For example one of the things they are asking for are higher down payments (min 20%). Canada is not saying don't house flip, but they are saying if you are going to do this then you better have capitalization to manage this. Just like an exchange says, "if you are going to short this option you better have the cash available."
Interesting bring in a red herring argument to make a point on something else... The problem has nothing to do with socialism. The problem is that incomes are not enough to allow people to pay for housing. Thus they have to rent as they cannot afford more. This is what is happening to America. Think about it. The driver in the article is making 14 USD per hour. This means that they have a maximum income of about 28K per year not including taxes. If they have a partner that means they might make 35K per year after taxes. If they get a 200K house they have 14K in yearly mortgage payments. An acceptable load would be 10K, resulting in a 170K house. Simply put Americans can't afford homes!
Im guessing you are canadian as canadians always try to say how much better canada is, yet 80% of them live within 30 minutes from the US border. Why not make it like China or other asian countries that require 40% down. Many sellers in Asian countries do owner financing too. You put 40% down and they give you 5 years to pay at 0% interest. It works out pretty good that way. Say you want to buy a $200k house...you put down 40% and pay 2k per month for 5 years and now your house is paid off. That way is much better than putting 3.5% down and $1100 per month for 30 years where you end up paying an extra 190k in interest payments so your house ends up costing you $390k
Wow yet another grand assumption... Yeah I am Canadian, but I have been living the last 16 years in Europe. With 11 of them in Switzerland. You know Switzerland, a country that has direct democracy, low taxes, completely private health care, and we know how to manage our money. After all the Swiss were one of the few governments that managed a surplus. Now regarding Asia, I don't know much about Asia, hence do not reference them. Do I find the 40% down a bad system? I would say not.
Not many people have 40% to put down let alone 3.5%. 20% down is the usual norm but still out of reach for most, propping up housing has pushed many potential buyers out of the market.
I just don't get how people fail to understand the reality expressed below. We need to let prices fall so that a vibrant demand renters the housing market. Somewhere -- 10%, 20% maybe even 30% -- down from current prices significant numbers of people will be willing to buy. Let's let the market bring them in.