One more thing. I beleive in shadow inventory and never said the issue I brought up of 2nds was the end all, be all but rather one of many things that will prevent much of what you beleive is shadow inventory from hitting the market in a torrential flood. Disressed properties absolutely exert downward pressure on prices just like limited inventory does the opposite. The strength of each side of the supply-demand equation will determine where we end up.
Here’s another of the many things that could weaken the shadow inventory flood case. Just got an email for a bulk sale of about $50M BPO value mostly in North County. Dont know if its real and I forwarded it to one of the posters around here to look into. We’ll have to wait and see if there’s anything to it. If true I would guess thats 100 or so properties that wont hit the open market as REO listings. More likely they would turn into rentals with great cash flow for buyer or fix/flips at retail. Once again, this is not the single answer but another piece of what is a very complex puzzle.
