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David Eichner's Blog

By David Eichner | Agent in Phoenix, AZ
  • We Need More Foreclosures!!!!

    Posted Under: Home Buying in Phoenix, Home Selling in Phoenix, Foreclosure in Phoenix  |  July 3, 2012 9:08 AM  |  141 views  |  No comments


    We Need More Foreclosures

    Now, here is a headline that many of us never expected to read. Foreclosures are not a good sign for anyone and hoping for more foreclosures would seem to be the antithesis of any hope for economic recovery. Yet, we have some logic here. First, with the economy sagging right now, we have made a point that the housing market finally has a chance to play a part in lifting the economy up instead of dragging it down. The housing market is basically running ten percent of last year while other sectors of the economy are languishing. When existing home sales were announced for last month, they were down slightly but still up from last year and prices were rising. It was argued that sales would have been higher if not for "constrained supply," which is supporting rising prices in certain sectors of the country. How can there not be enough homes for sale? We were supposed to be flooded with foreclosures now that the national servicing settlement has occurred. But this has not happened -- yet.

    Want further proof of this constrained supply? New home sales were up over 7.5% last month. New home sales have struggled during the real estate slump because of competition from low priced foreclosures and short sales. Let's make one point clear. We are not hoping for a flood of foreclosures. Nor are we hoping that more new loans go bad. However, we are hoping that we clear out the so-called shadow inventory of bank owned properties a bit more quickly so that we can have a balanced recovery in the real estate markets. This is especially important while rates are so low and the demand is there. Higher home sales will provide a lift for the economy -- and we need a lift right now, especially while Europe is providing a major drag. Right now the focus is upon events overseas and the news is not good. We need some good news to focus upon and therefore, bring on the foreclosures!

 
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