[quote=DWCAP]3) We follow a trend line that looks speciously like they line from 1991-1997. Spring rallys fizzel into fall declines as the economy just kinda sputters and frets. RE agents bottom call every spring and remain suspeciously silent as fall drops egg’s on faces. Happy talk from government is loud and perminate, as they are obviously big belivers that if everyone thinks itll all be ok, then it will regardless of everything else.
Personally, I am not waiting for a backlog of houses from the banks to magically make things change direction. They obviously have chosen to not take that path anymore. REO will trickel in at a rate that can be managed by the banks and will flow for years to come.
Id wait for two things to happen:
a) interets rates hit 5.75%+
b) October.[/quote]
I agree except for the slow trickle for years. Right now the banks are like a dam for REOs. They keep getting foreclosures piling up behind the dam but only let a trickle flow out. These are not good investments for banks, and not something that’s in their best interest to hold onto. They are insolvent because of them and only something like RTC2 will solve that.
They still have a 700k strong inventory of REOs they have not sold from the 1st wave of subprime defaults and now we have much bigger waves hitting.
The Gov. and banks know there are x amount of people out there that will participate in bidding wars and buy at today’s REO prices and they want to get those people tied up before they move to more drastic measures like RTC2?
