Foreclosures Drop 9.4%, But Problems Remain

Jul 18, 2014 by

Foreclosures Drop 9.4%, But Problems Remain

Although house values in California, including Silicon Valley, have appear to have increased dramatically during the last year, the driving force behind that increase is the serious imbalance between the number of houses for sale and the number of people who want to buy houses. Too few houses are for sale (the “supply”) and too many people want to buy them (the “demand”). The big bank mortgage servicers have held foreclosed houses off the market and have delayed selling seriously delinquent houses – for the purpose of reducing the supply. As a result, prices have been driven up unnaturally – this is what is called a housing price “bubble.” Yes, we are there again. Time will tell how this plays out over the next two or three years.


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