Good news: Speculators are back

Urban Land Institute gatherings on the Gulf Coast aren't as much fun as they used to be.

There are fewer attendees at these real-estate industry events and those who still show up swap war stories on the latest firm to go out of business or who got laid off.

Still, there were nuggets of good news at a recent ULI meeting in Bonita Springs. Michael Timmerman, an economist with Fishkind & Associates, says speculation in single-family homes has returned. “Speculation in the marketplace is a good thing because it's stabilizing prices,” he says.

The steep decline in home prices in the last two years will set the stage for the rebound as speculators snap up homes at below-replacement cost. “High housing costs were the biggest impediment to business growth,” Timmerman says.

On the commercial real estate side, David Farmer of Keystone Development Advisors says some banks are selling properties at market-clearing prices. Although painful, that will bring new investors into the area.

Dennis Church of Community Development Advisors says some builders are buying distressed lots selling at 35% to 60% off recent peak prices, mostly in the Tampa area. And foreclosures are concentrated in residential areas that consist mostly of scattered lots, not master-planned communities.