If anyone is going to cope with the downturn in an effective manner it will be the developers. We have already seen them cut prices, and reduce the quantity of homes per phase release.
I cannot tell you whether this is a cat bounce or not. I am looking to buy for several reasons and will be buying before the bottom hits. One thing that I notice is that for all the bashing that goes on, the bottom line is that all the indicators are pointing to a secular decline over the next several years, however the true bottom line is that we do not know.
So this particularly non-helpful post will try to just stick to the facts. NODs and defaults are higher then they have been in many many years and will continue to rise. By the same token, the pricing for these distressed properties not only has not affected pricing of resale homes, but even the lender owned homes have not been priced aggressively yet. The overall inventory is NOWHERE NEAR the expectation level of the bears. In fact inventory is significantly lower then where it was last year at this time. Why sales have picked up is also speculative. It could be that sellers are pricing are more aggressively. However I am seeing plenty of 700k and up homes going into escrow. So, however screaming the deals are, homes are not anywhere near what I would call affordable.
As you know secular trends all have cyclical runs in them. In my opinion this is a cyclical run that will continue through the rest of the spring. Hopefully things will slow down in the summer but that is hope on my part and not based on fact. My read is a long secular run that will be flat to down for the next few years. I tend to think that if the collapse that some of the posters foresee, happens, then both renters and homeowners will be in alot more trouble then any of us care to admit.