If you are saying that bank foreclosures over a period of 6 - 12 months in the mortgage belts can force down median prices in those areas, then ofcourse you are right, that can happen.
But I keep urging people to think of the next step.
When those families experience a forced sale where do they go? Since they still need to have a roof over their heads they rent somewhere else. Sure, if they all moved in with other friends and family and did not consume another house then prices can drop everywhere.
BUT IS THIS HAPPENING? If so, in what numbers? If so, for how long? Forever? This would a massive social change.
We could come up with any number of theoretical scenarios but we need to be realistic if we are to determine likely scenarios as opposed to fairyland stuff.
In previous difficult economic times we saw some areas, some segments, suffer whilst others boomed. For example, in the early 90's top end houses dived in value whilst 2 and 3 bedroom apartments went up in price. The median level 3 bedroom brick veneers saw no effect at all, they just sat there in price.
So you need to discard the idea of a general across the board crash IT AINT GUNNA HAPPEN and you need to see all this as opportunity. If you think in terms of say 5 years, you have great scope to make some serious dollars.
Kincella, Bernard Salt is on my buy list and I subscribed to his email service on your recommendation. I think his demographic investigations are brilliant and can help guys like us be more targetted and efficient in anticipating demand in coming years. The guy does everything I wish I could do if I had the time to hunt all the figures. He is well worth reading.
