[quote=CA renter][quote=peterb]Thanks, Russ. Sounds like a logical explination of events. Cash buyers. Nice. Skin in the game.

But no move-up buyers. Sounds like sector compression is coming on strong. Wonder what this would look like if all the NOD’s (Shadow) were let loose on the market?[/quote]

I’m thinking a lot of this “cash” is from hard money loans and large investment pools.

Not organic demand. This is pent up supply, too.
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Yep Peter, I predicted that “compression” on the spring prediction thread, remember? ;).

People on the 500K-800k and above buying threshold should hold out. Not saying others should not, but with weak sales in this price range I sure would.(I would also watch the loan mod activity and such). The hype was created where it didn’t belong by the fact that people tend to flock to the same deals,I made that warning many times here.It is also easy to blur activity from lower price ranges.

As far as the demand/supply. This is what makes talking about RE crazy making. No one really knows what projections to make. It looks like lots of people think that low end is in the “over correction” territory already and that is why you see so much activity in a fundamentally bad economy.

PITI debt ratios are still very liberal for those buying using loans too. My guess is that the powers that be are gambling that inflation and recovery will catch up. That or else they are just temporarily trying to put some of these homes in government insured,non- foreclosure status to white-wash the bank’s books, buy time and make fees.FHA is pretty hot now. Maybe we will have a wave of HUD foreclosures in a few years. That would be O.K.
I like the way HUD sells houses after they make a mess.