Blame this on the tree on which I became concussed earlier but here’s a not-quite-muddled thought.
Let’s all assume we agree that real estate prices are driven by supply and demand. Fair enough? Let’s also assume that most foreclosed properties carry fairly realistic price tags – the bank is less interested in squeezing the last dollar from the sale than getting the home of their books.
As more and more homes are foreclosed upon they will add to the inventory while at the same time eliminating the vast pool of phantom inventory caused by the ever-present short sales.
As more and more buyers look at bank-owned properties as the source of the “deal” everyone’s trying to find, is it possible the increase in demand will cause the market to at least level off?
When the inventory is flooded with “can’t be sold” short sales, is the evolution to foreclosures completely negative? Or does the move toward sellability (which I just made up) negate at least a portion of the negative impact?
In short … can an increase in foreclosures and the accompanying perception by buyers that there are deals to be had if only they make the move create the bottom everyone’s looking for?
Your thoughts, addled or otherwise, are welcome.[tags]Phoenix real estate, real estate foreclosures, real estate short sales[/tags]