Based on my experience during the last bust as well as what I’m seeing in this bust, I am of the opinion that the foreclosures don’t start driving the pricing until they pass 25% or 30% of the total sales. Once that happens the lenders start competing with each other instead of with the discretionary sellers. That’s when they get more agressive in their discounting.
We’re obviously not at that point yet, but I’m pretty confident we’ll get there within the next year or so.
