There are still plenty of concerns in the market, with homes priced over $500,000 selling slowly, and short sales accounting for about 30% of the homes on the market. One interesting wrinkle is that bank owned homes have become a scarce commodity. Just a few months ago bank owned properties also made up about a third of the transactions, but today only represent 5% of the homes for sale. REOs, especially in the lower price ranges, are in huge demand because of the relative simplicity of the transaction compared to a short sale, and the market is hot. Most bank owned homes are selling within a few days or weeks, and often at full price or higher. The Wall Street Journal has even dared to use the term "bidding war"!
There has been talk for months about a so-called moratorium on foreclosures related to the Federal financial bailout, TARP, and consolidation of banks, with speculation that it would soon end. This, of course, could lead to a new round of foreclosures and another influx of REO inventory on the market. That might lead to more downward price pressure, but it also might signal the final phase of a long and painful process.
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