IMO it is just the beginning. I think we will plow through any old records and not by just a little bit. I do believe and I know this is broken record time) that there will be wide variations on the price drops based on neighborhoods. Even within neighborhoods there will be severe discrepency. Using my own area Scripps, of which there is new and old Scripps. New Scripps will get pounded pretty hard and indeed the majority of the 95 listings active in that area right now are new Scripps. Old Scripps has continued to have very high demand. I would forecast most all distress sales will happen due to overextended buyers in the new housing including Stonebridge.
I think this will hold true for many neighborhoods. Places that are overbuilt, overbought, but have no redeeming value other then to provide a home for people will get pummelled hardest and will have the highest distress rate. Lump in flipper havens with these as well. These are your Eastlakes, and downtown condo market, even other speculative condo areas. Even nicer neighborhoods may fall into this category like 4S and some Carmel Valley cookie cutters. Other lower income neighborhoods that ran up fast for no reason. Look for these to get socked, Lemon Grove, southeast San Diego, and many many more. Places that have established owners with alot of equity will ride it out pretty well… to the frustration of people like me who want to live there.
but we already knew all of this… Let’s keep our fingers crossed the government keeps their darned nose out of this.
Right now percentage wise REO and shorts are a small percentage of the market. Also the lenders haven’t gotten desperate on pricing yet. Even if the numbers of REO’s gets large what we really need are desperate lenders. Personally I havent seen them get desperate on pricing yet. I cannot wait until they do… that should be fun.
