The herd's leaving: Real estate speculators, pulling back, help fed remove `froth'

Classic end to a bubble, frenzy, Ponzi scheme, or pump and dump... the fast money is heading for the door - leaving the community holding the bag

Lisa Tershak is offering to pay $5,500 in cash to anyone who buys her three-bedroom house in Leesburg, Virginia, near Washington.

She's reduced the investment property's asking price five times since July to $464,900, not far from the $450,000 she paid for it in March. ``There's too much inventory,'' says Tershak, 35.

``Everyone felt the bust coming and decided to dump their properties at the same time.''

Investors who helped fuel the U.S. housing boom by bidding up prices are now so desperate for buyers that some are offering cash bonuses in such markets as Washington.

That's a sign the Federal Reserve is succeeding in removing some of what Chairman Alan Greenspan called ``froth'' from the market. Inventories of unsold single-family homes are near a 17-year high as demand from speculators wanes and mortgage rates have risen more than a percentage point from a four-decade low reached in 2003.