According to the article below (or click on title above) you can see that the "shadow inventory" we have been reporting is not only real, it's staggering. Banks are already sitting on close to 17 months worth of housing inventory THAT THEY HAVEN'T EVEN PUT ON THE MARKET YET!!! With defaults growing daily and not expected to peak until at least 2012 how much more shadow inventory is going to be created?
One report I read recently suggested that perhaps banks are accumulating this inventory to play a high stakes game of chicken with the US Government. There are currently very, very few banks who have the capital necessary to sell these properties and realize the losses that until now they have not had to acknowledge. If in fact banks are waiting for our politicians to bail them out yet again and somehow allow them to never have to realize these losses, who will ultimately pay for that? Whether the banks are bailed out or not, what will happen to prices as this shadow inventory is ultimately disposed of? Even an elementary understanding of the law of supply and demand would allow you to clearly understand that active supply on the market today is large enough to cause prices to continue to fall.
Couple all of this with rising unemployment, rising skepticism from potential buyers, rising interest rates (yes Toto, you will again see fixed rates in the 9-10% range and possibly much much higher,) a falling dollar, a continuing shrinkage in the availability of credit, the shadow inventory and the rapidly approaching demise of the commercial real estate market and you have a recipe for prices to fall, nationally, another 30%+ from today's current levels. The bottom, nationally will not occur before 2014, at the absolute earliest. Are you prepared? Would you like to be? Raise your hand, ask for help and I will contact you to discuss options, simply comment to this article with your contact info and I will be in touch.
http://www.businessinsider.com/chart-of-the-day-housing-overhang-2009-9?utm_source=Triggermail&utm_medium=email&utm_campaign=Clusterstock%20Chart%20Of%20The%20Day%2C%20Tuesday%2C%209%2F29%2F09
