I don’t know anything about foreclosures, but would like to respond to waiting for a price drop.
Past real estate cycles in SD took 6-8 years to go up and the same time to go down. If you are waiting for the bottom, it will take many years.
The rash of foreclosures will hit in 2007 and 2008, because in 2007 we have $1trillion of ARMs resetting in the US, and presumably most of those borrowers will be forced to sell. That is when prices will really drop.
As Rich once said, RE is a slow moving ship. We have just started turning in the other direction. Once we turn completely, and sentiment is negative, price drops should go much faster. Sentiment is still positive today.
Once prices drop in earnest, you still have to decide whether to catch a falling knife. If the answer is no, you’ll end up waiting 4-6 years for the bottom.
Foreclosures and ARMs will put pressure on this market, but it will happen in 1-2 years, not now. Imagine you are racing a car and you want to go 100 mph from a stop light. How long will it take you to attain maximum speed? 4 seconds? 6 seconds? That’s my point. It cannot be attained in 0 seconds. Everything of maximum speed takes time to accelerate. Think of RE like a slow moving ship or like a car that must accelerate.
The stock market does the same thing. Slow drops. 1/2%. Another day 2%. Before you know it, 5%. As of today, the major indices are negative for the year. This will get a momentum of its own. So will housing.
I would say this is still a seller’s market, because if they price it just 1-5% below market, they can sell. Buyers still want to buy. We’ve got many optimistic buyers out there.
