I think the main thing that has caught me by surprise has been the relative ease with which these lenders have given up over the last few months. I fully expected them to put up more of a fight.
It’s clear that these portions of the market are being dominated and driven by expectations of the lenders. In addition to pricing the REOs, which set the pace for the decline, they also control the pricing on the short sales. A short sale can’t go any lower than it’s lender will allow it to go.
Right now, the REOs and shorts comprise fully 70% of a few of these markets, and I expect that trend to spread. They’re completely in the driver’s seat and everyone else is just along for the ride.
