[quote=davelj][quote=paramount]Banks are keeping a large number of foreclosures off the market to create a sense of scarcity.[/quote]
This is an absurd notion. The lenders (most of whom are not banks, by the way) want to get properties listed and sold as fast as they can. The problem is they lack the manpower to handle the volume.
Are some servicers stickier than others about lowering foreclosure sale prices to a market-clearing level? Sure. Are some moving a little slower than others in hopes of an expanded “bailout for homeowners?” Yeah. But, for the most part, they just don’t have the personnel or decision-making structure to deal with the volumes. That’s the crux of the problem.
Trust me, there’s no one on the planet who is under any illusion about scarcity of properties available. You cannot be serious.[/quote]
I agree that a coordinated effort to accomplish this is absurd. However, the cumulative affect of the lack of processing ability is, in a way, is creating the affect. For example: Some company finished a 27 unit bld behind the one I live in. Its been sitting empty for 6 months and nobody is trying to sell it. Now in my zip code that is over one month supply, almost 2. If I thought about it I could probably count another 5-6 months supply of inventory that is not on the market. Are you saying that if all these finished units were put on the market it would not affect prices in the area? I think increasing inventory by 50%+ all at once surely would.
