Speculators are the main force behind high Manatee County housing prices
Last year, when my wife and I were thinking about buying a larger home, we visited dozens of weekend real estate “open houses” we found either through classifed ads or by driving around neighborhoods we found attractive and following “Open House” signs. What we learned by talking to Realtors and direct sellers has led us to believe that cash-rich speculators, not people buying homes for themselves, have created the so-called “real estate boom” in Florida’s Manatee County.
Our first clue to this situation came early in our house hunt. We walked into an open house and the Realtor holding it asked us how long we expected to hold onto whatever property we bought before “cashing out.” We must have looked puzzled, because the next words out of her mouth were, “You mean… you mean you actually want to buy a house to live in?”
Well, yes. We were looking for a place to live. The amazed Realtor told us that of the 50+ people who had looked at that house that day, we were the first ones who weren’t looking for investment property. Then she asked us whether we had cash or would need a mortgage. When we told her we’d need a mortgage, she seemed to lose interest in us, even though we told her we’d been pre-approved by several major lenders for more than enough to purchase the property she was showing. “I’m really looking for a cash buyer here,” she said.
This experience was repeated, with variations, many times.
We also met a fair number of speculators who were holding their own open houses, trying to get top prices for homes they had bought cheap and “renovated” with cheap paint, cheap (but new) appliances, cheap carpet, and cheap cabinets. At least a few of these places had major deficiencies such as warped floors, bad wiring or visible mold in closets and other enclosed spaces. When we pointed these problems out to the sellers, they shrugged. One flat-out told us, “Someone will buy it anyway, probably as a rental.”
As we continued our search, we noticed that almost all the houses we looked at, even those in shockingly poor condition, had new occupants shortly after we looked at them. In most cases we didn’t bother to find out whether they had sold to homeowners, had sold as investment properties or had been withdrawn from the market and rented out by the people who had been trying to sell them. But in one case, we later learned that a duplex we had rejected because of obvious structural problems — including a roof that sagged to the point of visible droopiness — sold not once, but twice within six months after we looked at it. And it’s on the market yet again; the current owner has a “For Sale” sign in front of it even though one of its two units is now occupied by tenants who signed a two-year lease.
We know this because after all our searching we finally managed to find a house we liked — and could afford — in Bradenton’s Village of the Arts, and the saggy duplex is only three doors down from us. Other houses on this street have also sold since we moved here last November, but as far as we can tell my wife and I are the only new owner-occupants on the block; all the other new owners are apparently investors who, so far, haven’t shown any signs that they intend to improve their properties.
Almost everyone who visits us says, “This place is a great investment. You can’t go wrong. Property around here is bound to go up.” The problem is, we hope to live here for the rest of our lives, not sell out at a profit in a few years. We want to live in a neighborhood full of homeowning artists and art appreciators, not one full of rentals owned by speculators who can only profit from their investments if they manage to push real estate prices in the Village of the Arts to the point where only other investors, not working artists, can afford to buy homes here.
We would be happy to see housing prices here stop going up or even fall if this is what it takes to get the speculators out of the neighborhood and bring in other homeowners who will help build the Village of the Arts into the vibrant community we hope it will become one day. From our point of view, this would give us a better long-term return on our investment than owning a house that is “worth more” every year in a neighborhood dominated by absentee landlords.