Is the buyer likely to be the family on the left or the guy on the right?
Via zerohedge...
...It also means that far from rising rates - a gambit which was meant to spoof potential home buyers into rushing out to get a mortgage ahead of rising mortgage rates, a gambit which has since failed - the Fed will have to come up with a way to lower interest rates even further just in time for the US to finally decouple with the Emerging Market debt crisis and the Quantitative Tightening courtesy of the collapse in commodity prices.
Referencing the picture above, Housing Bubble 2.0 has long since run out of the guys on the left. Unless you're trying to move a truly "prime" property in Irvine or Arcadia. What little action that Johnny-come-lately extreme home debtors were providing seems to have petered out as well. And the recession hasn't even started yet...
International Valuation Standards defines market value as "the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion." Compulsion and a lack of prudence have been the norm during Housing Bubble 2.0 as have a dearth of willing sellers vis-a-vis willing buyers. This is no longer the case.
The market value of residential RE in the Bubble areas is being adjusted as we speak. Asking and closing prices are down in all but the most exclusive enclaves and they have been trending down for almost a year. As every single other bust has shown downward price momentum tends to over correct. Sure the timing is difficult, but it is the point of maximum financial opportunity.
Be patient true believers of math and market economics. The end of Bubble 2.0 is nigh...