An irreverent look at Wall Street
I think that might be your January call that you're smelling!What exactly do you disagree with?
Author stated that foreclosures beat down prices to levels that were tempting to first time buyers.If 40% of homes sold were foreclosures, isn't that pushing down prices already?Anecdotally, I know realtors are just swarming with business. This won't be reflected until a few more months.We heard the same about the auto industry. That cash for clunkers was stealing demand from the future. Now we'll hear they are doing better because they're benefiting from Toyota!
But there are plenty more foreclosures in the pipeline, which will continue pressuring prices. How many non-performing loans are banks just sitting on right now?What about all the Alt-A's that reset this year?Maybe a gigantic housing bubble, ten years in the making, really can bottom for good in a year, and all is roses again. But I doubt it will be that easy.
Without a doubt there is a huge pipeline.If the job market doesn't start improving, then that pipeline would be a negative.But in FL, they are already trying to change it into a non judicial state regarding mortgages. In other words, the days of free rent of a house in foreclosure are over.Why would the banks be pressing for that if they didn't see a brighter future?And as far as resets--with .25 Fed funds rate? That's why its where it is at
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