LOS ANGELES -- March 22, 2006 -- Scores of real estate investors are fleeing Southern California and taking their profits to more affordable housing markets -- including coastal Florida areas.

At its peak in the first half of 2004, investors accounted for 14 percent of sales in Los Angeles and Orange counties. However, investors still make up a large portion of sales in Phoenix, Las Vegas, coastal Florida, and Central and Northern California. According to DataQuick Information Systems, investors and second-home buyers accounted for nearly 40 percent of home sales in Arizona's Maricopa, Pinal and Pima counties in 2005.

Research by LoanPerformance, meanwhile, shows that investors snapped up 11,000 homes in the Phoenix area during the first nine months of last year, versus 5,000 homes in the Los Angeles area. Investors are leaving Southern California due to the lack of new developments and the absence of substantial price gains -- and, therefore, less opportunity for whopping profits.

Experts believe that a decline in speculation could be good for the local market by minimizing price gains and preventing a severe drop in property values.

Source: Los Angeles Verdana,Arial, Annette Haddad, (03-18-2006)