Once again, we have to remember that sales are picking up **because** prices are down.
In the lower-end neighborhoods, I believe you can buy now and risk only $30K-$60K in potential losses, at worst. This would be for $250K homes or less. That’s not bad, compared to $200K+ losses.
They are still offering “funky” mortgages, and the upward swing of the housing bubble is still fresh in everyone’s mind. They are anchoring to 2005 prices, and things look great to buy!
If the economy continues to get worse, rents will fall, and I think this is key. Rents are in their own bubble right now, IMO. Too many LLs asking $2K+/mo rent for really basic housing in average neighborhoods. I do not think this is sustainable over the long run.
