The Recession Diaries, #3
Posted by JimIt is being widely reported that the long anticipated second shoe is about to drop. A second wave of foreclosures is directly off-shore and moving quickly to make landfall. To make the whole picture even more gruesome, the politically imposed temporary moratoria on foreclosures is shortly ending. All of this spells a huge swell of cheap real estate that will shortly flood the market.
Even with this new inventory, the bottom portion of the market has set a price foundation. Under $250,000 homes are not going to depreciate any further as the demand is just too high for these bargains. Banks have priced these cheaper properties at irresistible levels and they all seem to get the multiple offers lenders wanted. The open question out there involves the higher-end properties. Thus far this market has been characterized with low sales volume but also low loss of value. Notices of Defaults are moving higher in the pricier communities so it stands to reason prices in places like Del Mar, Mission Hills and La Jolla may be seeing further price erosion.
