One of the biggest benefits of more REOs coming on the market would hopefully be to send a message to those sellers who think that they can beat the odds.
This house on Rawl in Solana Beach typifies the optimism, and whose sales history is a great snapshot of the bubble:
SP: $560,000 8/97
SP: $1,030,000 1/03
SP: $1,760,000 5/08
LP: $1,895,000 3/09
It looks like a potential nightmare, but the current owner paid cash for this 1,266sf showplace – who or what is going to convince them to lower the price?
There are only seven Solana Beach houses scheduled for trustee sale currently, and I know that one of those, and maybe two, that will most likely be cured.
Unless dozens of REOs hit the same neighborhoods at the same time, the coastal regions are going to have a lot of delirious pricing. Bankers, bring on the REOs, please!