Personal opinion here waiting to buy. I think the investors left 4S a long long time ago. Perhaps a few bonehead realtors were left over buying places but that number is few and far between. I doubt you have seen an investor purchase in 4S for a long long time.
Resellers are typically not adept at competing with new inventory on pricing. It doesn’t matter if there is 1 new home for sale or a 100 homes for sale. Most resellers don’t get it until it is to late. The 4S exception is that demand has been strong and continues to be. This spring I expect it to continue.
While the existing REO’s have been sold in 4S to think that there will not be anymore is a fallacy. Distress lists in desireable locations will vary over time and do not monotonically increase or decrease unless a clear trend is established. So you have variations of bursts of distressed properties coming on the market followed by dryer spells. Expect to see increased sales this spring. Expect to see more distress (from homes that didn’t sell, not necessarily reos or shorts) come July/August. My main point is that I do believe 4S will be flat/decrease but it will be over an extended period of time. If your timetable is to seek a smoking deal in the next 12 months then I would be wary. If you have a 24-36 month horizon then the odds seem to be in your favor.
