Well..I believe this is a calculated move as far as short sales and foreclosures go.
1) Banks that hold the mortgages in the same location do not want to flood the market with REO's because this will drive down sales prices and burst our little bubble here in Southern Cali a little more.
2) Because of this the banks allow people to sit in the homes without paying the mortgage longer and longer...
3) The federal government has launched several programs that actually give people money to pay their mortgage! Look up the recent SD Union Tribune article. They interviewed several people getting money to pay their mortgage..one of them was getting over $1,800.00 a month!! This results in less people listing their homes for sale when they can no longer afford it themselves.
4) Banks are reducing principal mortgage amounts and obtain subsidizes from uncle same to try to hold off the inevitable.
Traditional sellers are trying to wait out the dip if they can and don't want to sell their homes at a loss. Most have refi'd themselves into oblivion so even if they bought there house at current market rate they took so much cash out during the height of the market they would have to bring funds into close.
It is frustrating for a new homebuyer...I have made several offers always full price or over asking, immaculate credit ect..ect but I am always outbid due to lack of supply or the house goes into an MLS abyss..only to resurface 6 months later in the same condition..One would think it was a sellers market..No..it is just a trickle down affect by the powers that be!
