Elementary economics is being manipulate in the local housing market here in Kissimmee and Saint Cloud , Florida. Supply and Demand. It appears that the supply is being controlled by the banks. As the market has stabilized, inventories are declining. Bank Owned homes under $200,000 have been priced between $68 and $82 a square foot. In this past week, the trend has been to price these distressed properties at $100 a square foot. If there are buyers, and the inventories are drying up, these prices are bound to raise. Inventories are being manipulated.
There are many families in homes that they have stopped paying their mortgage for 10 months or more, and the foreclosure process hasn't even been started. Traditionally, 3 missed payments triggers a foreclosure filed. The delay, the lenders are saying they have too much inventory to start the process.
The only cynical answer I can come up with is lenders are being subsidized by our government for mortgage non payment.
Short sales have also slowed way down in the negotiating. Lenders, with large REO inventories are not trying to negotiate a settlement in lieu of foreclosure. Just more delays.
Government intervention will stretch this "Housing Crisis" past the time for normal recovery.
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