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So When Will the Foreclosure Snowball Stop Rolling?

In January 2009 I wrote about the foreclosure snowball. We all know the story about the heated real estate market, the popping bubble and the resulting foreclosure and economic crisis. Foreclosures have dragged prices lower which in turn created more foreclosures which again lowered prices which again caused more foreclosures and so on.
Foreclosures will continue to put a drag on prices until their numbers decrease. Distressed sales make up around 45% of the Sarasota Florida real estate market (the percentage of distressed sales in the luxury markets like Siesta Key, Longboat Key, Casey Key, Bird Key and Lido Key are much lower).
So when does the foreclosure snowball stop rolling?
1) The economy and confidence
The economy needs to improve. People are hoarding any money they have and are reluctant to spend it. When the economy improves people will become more optimistic and more likely to spend money. This will bring more home buyers to market. More home buyers equals more sales and lower inventory. A renewed level of confidence will also keep some people in their homes who might otherwise quit paying thus decreasing the number of foreclosures.
2) Jobs
No one is going to buy a house ... more

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