[08/15/11: Author “told-you-so” update – We saw rising home prices in Phoenix from foreclosure activity much earlier this year.)
From HousingWire: “Rise in REO value cuts Freddie Mac holding expenses by 90%”
“The decrease in REO operations expense was primarily driven by an improvement in both REO holding period write-downs and disposition losses as REO fair values stabilized during the second quarter,” Freddie said in its second-quarter earnings report.
There’s demand out there leading to overall market price stability.
Using Phoenix – a REO-laden market – we’ve seen this story before with the tax credit in 2009-10:
Phoenix is less seasonal and inventory is constrained compared to recent years, yielding short-term price support:
When the remaining shadow inventory hits the active market, the tide might change, but for now, there’s a clear indication that short-term demand is supporting prices across the board.