After talking to several agents that deal strictly in REO/Foreclosure properties, all of the agents agreed that we may soon see 1998 prices. Prices will go lower, however watch the interest rates!
I predict that we may see Jimmy Carter Era interest rates more then 10%. (banks have to recover someway) Interest rates are so low it is amazing there is anything left for sale.
The absorbtion rate for homes is going down slightly, but I look for a glut of homes to come on the market as the Adjustable Rate Mortgages reset in the month of June. The new trend in real estate investing seems to be hunting for low priced short sales, which is trick in itself. Why are people pursuing these Foreclosure/REO's when they get into these "bidding wars." It does'nt make sense. Even the new homebuilders have got the prices right. One new home builder in Las Vegas even guarantees the price will not go down for up to 5 months while in contract or they will adjust the price.
So where does that leave the Housing consumer? When people ask me, "When is a good time to buy a home?" I tell them, in good times or bad, "When you find the home of your dreams at a payment you can afford."