<< What you say makes perfect sense theoretically, but it is not what is actually happening in practice. A broker I know in the Palm Springs area took an all-cash offer on a short sale to the bank for $475,000. The bank dicked around and dicked around, and finally the prospective buyer got pisssed off and walked away. The owner got pissed off too and took the home off the market, only to put it back on a few months later. Long story short, my broker friend found another all-cash buyer for $350,000 and the bank accepted!!! I know it's not rational, but neither the banks nor the owners are completely rational at this point. >>
This happens all the time. Go to YouTube and search under Jim TV (Jim the Realtor). He has some great video's and stories of what is going on in southern California - he was also on 60 minutes or Dateline or 20/20 (own of those shows) last year talking about the market.
<< BTW, the same broker friend of mine, who has been in the business for forty years, just wrote two loans, Freddie and Fannie, for 4.62% on a 30-year fixed. That means you can borrow $100,000 for $514/month. That's the lowest he has ever written a 30-year fixed loan for. Maybe this will begin to nudge home sales a bit. >>
I was able to get 4.60% on a 30-year fixed in February 2009 so low rates have been around a while for people with a solid credit score, sizeable downpayment, etc. And obviously the very low rates help affordability (for now) but the oversupply of existing homes/condos is going to take a number of years to work itself to a more normal level as new households are created. The key is what happens to real estate prices when mortgage rates increase to a relatively normal level (7-8%) from today's historic low level's...
10nis
Market Data 
Markets 
AI
