Because the real estate market is very illiquid. Each property is unique. It's not easy to figure out the right price. Trading isn't even bad, it's contributing to price discovery in the market and makes sure that the average sale price is close to the actual market price.
The problem isn't that speculators are evil people but rather that the "arbitrage" they are doing is fueled by regressive housing policies. Increasing the efficiency in the housing market exposes the fundamental housing problem. After all, it can't just be that speculators are snapping up properties, there must be buyers that are willing to buy properties from the speculators, otherwise the speculators lose money. Those buyers don't even need to think that the house is overpriced, the house could genuinely be a good deal for them.
The problem isn't that speculators are evil people but rather that the "arbitrage" they are doing is fueled by regressive housing policies. Increasing the efficiency in the housing market exposes the fundamental housing problem. After all, it can't just be that speculators are snapping up properties, there must be buyers that are willing to buy properties from the speculators, otherwise the speculators lose money. Those buyers don't even need to think that the house is overpriced, the house could genuinely be a good deal for them.