Manufacturing Industry

Confirming some bubbles?(speculative buyers)(Brief Article)

Professional Builder (1993), August, 2004

If speculative buyers contribute to the formation of pricing bubbles, this is not good news: In the July 14th Wall Street Journal an article by Queena Sook Kim seems to confirm speculation is on the rise in a number of markets.

Some large builders, including KB Home, Standard Pacific and Shea Homes, are instituting policies to stop speculative buying, specifically in Arizona, California and Virginia. Builders--large and small--are taking similar action in Nevada and Florida.

In these hot markets, real estate investors are "flipping" houses within months, sometimes weeks, often before the houses are finished. The WSJ story points out that speculative buying in the late 1980s left many builders with gluts of inventory houses.

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