Just to clarify my statements below, I dont think we'll be back to a "normal" market in 2014/2015, I believe we'll be out of the "mess". I term the "mess" as all of the politics, delay and pray tactics shielded as loan modifications and the unclear foreclosure process. What I believe will happen is we will see 2-3 years of banks offering incentives for homeowners to do short sales and once we get a defined foreclosure process back and homeowners start seeing action on the banks parts instead of waiting for the knock on the door, homeowners will seek out qualified REALTORS to pursue short sales and they will not enter the foreclosure numbers.
I believe you will see in 2013/2014, the continued increase of short sales and the increase of bulk sales in the loan process to 3rd party investors (your seeing that now with FHA "loans" not the assets themselves).
The unfortunate part is the banks have created a false Sellers market and what we really need is some inventory for homeowners to take advantage of the great rates.
The crazy part is I've heard over and over again, the last few years of the recovery may be the worst for homeowners to get things like short sale approvals etc as once foreclosures move out of the media and we focus on a recovery of the economy (anyone's guess on this one), there will be less incentive for the banks.
But inventory wise, any "shadow inventory" will be altered greatly by purchases from hedge funds and 3rd party investors converting assets to rentals in a buy and hold strategy
Let's timeline this one and wait and see, its anyone guess
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