The demand building on the sidelines is nothing compared to the demand that we experienced at the height of the exotic loans and the most lax point in underwriting. Currently home prices are falling, we are getting into some nasty resets in Prime Option Arms, so the default / foreclosure story is still intact. The return to easy loans is way way way down the line and I doubt we see that type of phenomena again at least in Mortgage Backed Securities. Are there qualified and…..Confident…..buyers that will jump in this Spring, yes. There is just not that many of them. Also a recent poll just came out that most Americans now believe we are in a recession. People don’t buy into shaky RE markets when they have the thought of recession in the back of their head (we did not have that in the Spring of 07). In order to move the glut of inventory that now permeates most of the California market there will have to be a bid that is perceived to be under market value. That is how you return to equilibrium.
