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I made the same argument over a year ago, the sooner banks dump there inventory, the better financial shape they will be in the long run. It's probably too late now.
Actually, this is a positive feedback loop. The pile up of foreclosures causes banks to dump houses which causes prices to go down which causes more foreclosures to pile up which causes banks to dump houses which causes prices to go down.
Investors would be seen as a negative feedback loop keeping prices from dropping below 'cash flow positive' levels. Prices go down, which makes investing cash flow positive, which causes investors to buy houses, which cause prices to go up, which makes investing not cash-flow positive, so investors back off.
Negative feedback loops mitigate inputs and drive towards stability. Positive feedback loops accelerate inputs and drive systems towards greater and greater responses.
Why are we looking at articles that are 2 years old? This article is from 2011!
Maximum offer is 50% of listing price & that's if you've lost your mind.Of course everyone has the right to go into even more debt to overpay for overpriced houses so the seller & commissioned sales people can make Mo' Money. Buyers are so thoughtful.
Dr. HousingBubble presents some real data, showing foreclosure rates are exploding across all loan types. As price fall accelerates, more and more owners will find themselves underwater, defaulting, and filling up the pipeline again. At some point, instead of trying to hold out for the better deal, banks will be competing with each other over prices, trying to dump their inventory, before the other bank does.
http://www.doctorhousingbubble.com/bad-bank-model-bofa-7-charts-us-housing-market-option-arms-win-worst-performing-loan-7-million-distressed-loans/#more-4349
#housing