If a good CV home that I want to upgrade to is now 50%, I’d rush to the bank and buy it.
I would meet and possibly slightly bid up the price to beat out everyone who has to carry a loan to buy the home…
So to answer your question, yes there are people who would buy at 50% off, since we don’t consider this the end of the world.
That said, I *doubt* most people will find 50% homes anytime soon in the coastal areas available to be bought. I see three tiers of buyers.
1) Wholesale: this will be the private equity groups that buys homes in bulk. They are the ones that will have the resources to buy homes in desirable areas 50% off. They’ll come in with cash in hand and buy in bulk. and try to resell it for a profit.
2) Discounted: these will will be people that pick up homes slightly marked up from wholesale. They have financial capital in hand (near or close to near cash deal, but lack the capacity to do bulk deals). Mostly these are folks looking for primaries
3) Retail: folks that buy from agents,mls,etc and pay more than discounted. Typically people that will need to carry a loan to buy a home in these coastal areas.
Short of having cash on hand or access to cash on hand or connections with banks, me thinks those tier 1 & 2 buyers are going to scoop up these 50% properties (if any)…
As Rich has writen about, Japan might not be the model to follow in drawing parallels to the U.S. Afterall, americans are a net debtor, not a net saver. Deflation as a public policy, probably isn’t the solution.
