Housing.com News, Analysis & Opinion: Buying & Selling: Flippers Flop As Market Cools

Jason Beaver, a Sunnyvale, Calif.-based Apple Inc. programmer, got caught up in the talk of the hot housing market from friends who bought multiple homes in Las Vegas and made a killing. His name was drawn in a buyers' lottery in the Solera subdivision and he put $35,300 down on a $353,000 home in February 2004. The community is restricted to people age 55 or older; the 37-year-old Beaver had no intention of moving in.
That summer, the housing market began to soften. He nervously put the house on the market for a break-even price the same day escrow closed. He got no offers.
A tight market had suddenly become flush with resale homes as investors sought to cash out. Pulte was one of several builders to slash new home prices, in some cases by as much as $80,000 in a single day. Beaver and others are suing, but the company has said it was simply reacting to new conditions in an overheated market.
Beaver has been renting the home out for about a $1,000 a month, despite monthly expenses around $2,000.

I think these are the people Rob Dawg was talking about when we discussed whether or not to be merciful to f$#ked borrowers. People like Beaver are amazing--they're all about the market when it benefits them, but things suddenly go wrong and they want to sue? The kind of conditions he fell victim to were written on the wall months in advance--if the blogerati could see it, why couldn't they?

Because they didn't want to. Because people will start with a belief and selectively look for facts to justify said belief, no matter how crazy. And because of the shortsightedness and selfishness of people like Beaver and specuvestor poster boy Casey Serin, many honest buyers are going to be locked out of the market due to severely restricted credit and tighter loaning standards.

I hope people like Casey and Beaver can learn from their mistakes and provide examples to benefit others, but I can't shake the belief that this could have all been averted if they'd paid attention to the warning signs earlier on.

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Sunday's Associated Press had a marvelous gem chronicling the faltering fortunes of flippers in a cooling market: Jason Beaver, a Sunnyvale, Calif.-based Apple Inc. programmer, got caught up in the talk of the hot housing market from friends who bought multiple homes in Las Vegas and made a killing. His name was drawn in a buyers' lottery in the Solera subdivision and he put $35,300 down on a $353,000 home in February 2004. The community is restricted to people age 55 or older; the 37-year-old Beaver had no intention of moving in. That summer, the housing market began to soften. He nervously put the house on the market for a break-even price the same day escrow closed. He got no offers. A tight market had suddenly become flush with resale homes as investors sought to cash out. Pulte was one of several builders to slash new home prices, in some cases by as much as $80,000 in a single day. Beaver and others are suing, but the company has said it was simply reacting to new conditions in an overheated market. Beaver has been renting the home out for about a $1,000 a month, despite monthly expenses around $2,000. I think these are the people Rob Dawg was talking about when we discussed whether or not to be merciful to f$#ked borrowers. People like Beaver are amazing--they're all about the market when it benefits them, but things suddenly go wrong and they want to sue? The kind of conditions he fell victim to were written on the wall months in advance--if the blogerati could see it, why couldn't they? Because they didn't want to. Because people will start with a belief and selectively look for facts to justify said belief, no matter how crazy. And because of the shortsightedness and selfishness of people like Beaver and specuvestor poster boy Casey Serin, many honest buyers are going to be locked out of the market due to severely restricted credit and tighter loaning standards. I hope people like Casey and Beaver can learn from their mistakes and provide examples to benefit others, but I can't shake the belief that this could have all been averted if they'd paid attention to the warning signs earlier on.