Zeev's Turnips Patch-No Politics (ZEEV)

[Newly2b]

It's simple supply and demand.

One thing that tends to depress housing prices is a high number of foreclosures coming onto the market (as a result of lowered lending standards and higher unemployment). The banks need to get these properties off their books quickly, so they are priced at "bargain" prices compared to the rest of the market, forcing other sellers to reduce their prices to remain competitive.

When the number of foreclosed properties for sale rises, and the number of qualified ready, willing and able buyers drops (due to higher interest rates, joblessness, lack of funds available to purchase, etc.), only the property that represents the "best deal" for the money is going to sell, competition sharpens and prices begin to decline.
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