As a point of order, the fact that the seller’s company booked the loss instead of the seller has nothing to do with the data point itself. There was a purchase at the beginning and there was a loss at the end. The only difference this time being who paid for that loss. If not for the relo this seller probably wouldn’t have had any reason to sell, but that doesn’t mean their equity position wouldn’t have suffered nonetheless.
Now if you’d care to make the argument that the relo company could have done better, possibly even avoiding the loss, that’s another discussion entirely. One of the things relo companies do is obtain 2 separate appraisals for those properties prior to buying them from the employee. If there’s a variance between the two appraisals they reconcile it, and by that I mean that one or the other is corrected; they aren’t averaged.
The relo factor in this paired sale situation underscores the fact that there are always a certain number of must-sell transactions at any given time. What’s different during a downswing is that there are more of them because of other factors that don’t normally come into play during good times. Obviously, if enough of these must-sells accumulate they are of effect on the rest of the sales.
We’re not at that tipping point yet, but I think we might possibly get there by the end of this year.