Discussion in 'Economy' started by Gunny, Jun 9, 2008.
more ... Lenders slash prices to dump foreclosed homes - Mortgage Mess - MSNBC.com
Lookin' for a good deal? - buy a foreclosed home...
Discount for Foreclosed Homes Widened in 2010
Thursday, February 24, 2011 - The gap between the average sale price of a foreclosed home and that of other properties grew wider last year, giving homebuyers who snapped up bank-owned homes big discounts.
Let the good times roll. There is a bottom in the Marianas strait.
Domestically a very important topic. But hardly of consequence in the broader scheme.
If only real estate would find it's bottom tomorrow. But then again be careful what you wish for.
I'm hearing of bidding wars in the Tampa Bay, Sarasota areas.
Home prices fall near 2009 low...
Home prices near a double dip
March 29, 2011 -- January home prices fell for the sixth month in a row, edging closer to a double dip.
Here's the way it works based on the early stages of the S&L bailout, a much smaller downturn:
The sale of foreclosures lowers prices.
Here is where it gets tricky. Lower prices drive at least three independent effects:
Investors stop paying on their worse performing properties while collecting rents to spend on tax sales and foreclosures and try to do so without screwing up rental revenues. Since literally all investors are trying to do the same thing at the same time the probability of turning whole neighborhoods into abandoned housing is high.
Two boarded up houses in the same subdivision of say 200 houses will drop property values on all of the houses. Current vacancy rates are significantly higher than the 10% frictional vacancy rate that has little effect on prices so long as time vacant stays relatively short. But once the first house gets boarded up to prevent theft and vandalism the ball starts rolling towards slum.
A lot more people will go upside down as housing prices go down but as long as lower housing prices doesn't increase unemployment that is not a problem.
However once critical mass is hit the whole neighborhood goes down hill fast and all three effects reinforce each other. About Sept. we will find out whether there are a lot of new Detroits being created.
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