Arraya in the perfect scenario prices will continue to drop, but I must say our government is becoming very good on the supply side of control. I am on the east coast for a month in search of RE investments and funny enough they are few and far between.
I have been to trustee auctions from Florida to the Northeast and if you think the banks are taking less than the failed mortgage amount you are mistaken. Banks are playing into the same game as the FED (maybe because they have no choice). Florida is a scary place right now. The condo associations will probably start filing BK in the boat loads as many are just walking away). SFHs in places like Florida are still way over priced and have a lot of room to drop.
It doesn’t matter how much inventory the banks hold, how many more there are to come and where unemployment is because the banks are obviously in no need to unload inventory or by FED standards are unable to. I truly believe our government has a much bigger plan than any of us can imagine. Even if there were 3-4 million in the shadow inventory on the horizon there has to be a plan to create some sort of income whether it is moving the units or renting them. My guess is the plan to rent is a huge possibility. Property taxes and HOA’s that remain the responsibility of the banks will create an ever bigger problem if banks continue to be on the hook for these.
I predict 2010 will be one of the most interesting times in regards to real estate in the history of this country. You can only play the same game for so long before one side loses!!!
