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The only value of this data below is trying to predict how home buyers and sellers will interpret it.

Because the accuracy is suspect. For example, the ‘homes in foreclosure process’ for San Diego is more than 20% higher than the 12,561 properties shown to be in default by foreclosureradar.com. But you could also wonder about the +7.5% increase in prices too.

Sellers are happy to ignore any bad news, but how about the buyers? Does the frustration cause buyers to settle after months or years, or do they get more determined? I think there is a little of both – in my experience the buyers are holding out more for the best quality, but once they find it, they’re willing to add a little extra mustard to the price if that’s what it takes to get it over with!

The media perpetuates the idea that more foreclosures means lower prices (whether it’s true or not). But with buyers squeezing for better quality, we’ll probably continue to see the best-quality homes getting bid up, and the inferior homes getting beat down.

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