We are at a point where there are as many foreclosures as there are new homes being built in the United States.
This means that even if (and that's a big "if") there are as many buyers as there were last year, there are now twice as many homes in supply. Now add the fact that there are a large percentage of homeowners that were financing their lifestyles through interest-only loans (see top 5 cities and the percentage of loans that were interest only as of 2004) that are going to get readjusted this year. You can bet the number of foreclosures will increase in 2007. Most foreclosures take eight months to come to the market.
Basically, we should see increases in foreclosure numbers across the country through at least mid 2008—meaning that the market will not stabilize until 2009, thus the price will increase at the beginning of 2010.
1) San Diego: 47.6%
2) Atlanta: 45.5%
3) San Francisco: 45.3%
4) Denver: 43.4%
5) Oakland: 43.1%
