Investors helped with causing the runup, but I'm not aware of any area where they amounted to more than 35% of the buyers. That is a minority in causing the problem. However, if you take 35% of the buyers out of the housing picture, houses will sit longer, prices will be forced down further, and the economy will suffer more and for a longer time. Simple law of supply and DEMAND. Take 35% of the buyers out of the picture for any commodity and prices fall. It is self-feeding. Those homeowners now holding on by a thread will fall and the abyss deepens as more properties enter foreclosure.That is good for me, but very bad for homeowner and the economy. I'm not condoning the investors' actions. I'm just saying this will keep the real estate mess going on. Someone posted on the cb yesterday that he thought Utah had hit the bottom of the cycle. imo, not even close, and these changes will hurt. This will help slow down inflation, but also further stagnate the economy. More money will sit on the sidelines since real estate is not a viable source for many and the stock market is getting more like a roulette wheel every day. I just turned 60, am well versed in the investment world, and I've never been as concerned about our economy as now. I really hope I'm wrong about this, but I think this will add several years to the real estate mess. Only time will tell if I'm wrong.
My prediction is 2-3 years till bottom in most states, including Utah. If there are more radical changes, like obama, it may be longer.
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