Hey it brought back Mr. Mortgage, that’s fantastic! He’s even using his old name, his last chance for redemption has arrived. It will take a few months and the Tsuinami may just be wave that is absorbed, but the real news is the cleaning of the books and going back to 90 days and you need to start looking for a place to live. It’s needed in order to truly begin the recovery. Heads are being pulled from the sand and I think that bodes well for the future.
There will be a ripple in supply in some areas, but not all. There will be a drop in price in some areas, but not all. The lending standards changed a few years ago, probably about 3 years back. So the pipeline is emptying and the number of distressed properties that have already been churned through is significant, so this will likely be the last system shock. I personally believe recovery, a slow one albeit, will follow. We will not have $10k beachfront properties and we will not see 50% declines since affordability metrics are already normal. What we might see is a very short overshoot in areas with lots of properties that were not foreclosed on but should have been. I believe the overshoot (if it happens and in the places it happanes) will be short lived and we wont see it again, at least not for a decade or two when the next cycle occurs. Actually I’m not sure we dig this hole again in my lifetime, it will require time and a generation to erase the memory.
The point of the thread, is that something will come, not earth shattering and not likely in the strongholds that are somewhat immune or the areas that have already been churned through. So for the estimated 20% of the piggies that are still sidelined, I think you should keep your eye on the ball if you are serious, this might be the last leg down you see.
My anaology of choice is actually about housing and bad weather, blending housing prices and tsuinamis quite nicely. Think of it as a series of storms or hurricanes hitting an area unusually hard. With one last storm on the horizon, the houses that have not lost a shingle will likely be fine. The ones that were already knocked down and rebuilt with brick with be fine too. But the ones the barely survived the last storm and have not been repaired, they will fall. Where they are will probably be revealed in the coming months.
