We did not let the market correct properly. Instead of letting the foreclosure process run a natural course, our government said no. Sacks of money were given to banks. A large number of homes did not hit the market that should have. No inventory glut occurred. Interest rates have been pushed WAY LOWER then the bubble interest rates ever were. Many people who should have lost their home did not. Loans were modified, and in some cases reduced.
Presto we have created conditions that were even WORSE then the original conditions that led to the bubble. It perpetuates itself. Those who were underwater soon will not be as the market marches higher.
Showed a home in Scripps yesterday. After 2 days on the market it has over 20 offers.
If you are a buyer looking for a deal in the I15 corridor or Carlsbad, my advice is to either come in very strong or go rent for awhile. Conditions like this may cool down some at the end of summer, but if people are predicting a reversal of the trend, well they are flat wrong. The trend will not reverse until rates rise substantially.
