If buyers can achieve a good rental surplus (properly calculated) at the current level on purchase
This bit seems like a big “if” to me… if this is happening, I imagine it’s just in a few pockets and not widespread enough to form a regionally generalizable floor.
It still seems to me like the market, even the REO part of it, is pricing in a quick price rebound. People sometimes talk about getting positive cash flow without accounting for the opportunity cost of their down payment, or they talk about good deals where cash flow (often based on optimistic assumptions) is only slightly negative.
From a non-investor standpoint, there’s no doubt that despite all that has happened, there is still a sense of urgency for many people to get into a house. It wasn’t like this before the boom.
It still seems like the sentiment hasn’t been ground down to a point where there would be enough of a floor to offset all the REOs.
That’s my semi-coherent Friday afternoon 2 cents anyway…
