chasman

Over-Correction in the Phoenix Housing Market

sure the banks could lease the houses out, but that would require them to hire new staff to manage a portfolio of houses, and get into the rental leasing business. more added costs, right?

cost benefit analysis and time value of money in this environment where every bank needs as much cash on the books would lead them to the quickets solution - sell as quick as they can, and get rid of inventory to raise cash. same thing every retailer is doing by slashing costs this holiday season - sell inventory as quick as possible b/c it is not stabilizing anytime soon. if they aren't buying now, then what pushes buyers to start buying in the next 6 months. especially with estimated 500k more job cuts per month over next 3-5 months.

phoenix was the poster child of quick "noveau" money - home equity, real estate developers, brokers, agents, construction, etc. everyone wanted the quick buck now, to further their glitzy Hummer, 5 BR Palm Springs like lifestyle, with nothing put away for savings, nor any real thought to real value creation. Phoenix is one big house of cards. Scary part - the movie Pump up the Volume was a great foreshadowing of the damage to come.

if you throw out "easy" solutions, do some more due diligence on what it actually takes to implement those solutions.