Dr. Housing Bubble 10/04/09

[Crewleader]

Real Homes of Genius: 3 Westside Shadow Inventory Homes. Santa Monica, Culver City, and Rancho Park. Banks will not Hold Inventory Forever.

The shadow inventory is probably one of the most pressing issues determining the future of real estate prices. In recent weeks, mostly those with close ties to the real estate industry, have started having faith in the banking industry that somehow incompetent banks that wouldn’t know a loan modification if it bit them in the rear are going to somehow systematically pump out real estate in an orderly fashion. Really? This of course is based on their tiny subset of localized information. I’ll get into the macro reasons later why the crutch holding real estate up right now is merely temporary. The argument is basically a gut reaction of, “well I know banks are going to slowly put homes into the market because they can.” The Popeye argument unfortunately doesn’t work here. This is similar to the old NAR argument that real estate prices always go up because they always go up. In reality the U.S. Treasury and Federal Reserve have purchased a window for banks and toxic inventory. That is it.

Banks Becoming Greedy Dad or Loser Dad?

http://www.doctorhousingbubble.com/real-homes-of-genius-3-westside-shadow-inventory-homes-santa-monica-culver-city-and-rancho-park-banks-will-not-hold-inventory-forever/