Quote from Kassz007:
Area specific for sure. But the original comment made that I took exception to was that houses are sitting there unsold without any buyers, but that is not true. In many areas, prices have declined so much that there is indeed buyers. Sometimes many buyers. No buyers @ pre crash prices, of course, but buyers nonetheless. And yes, not in all areas, but overall I would say this is the case.
I completely agree there are people buying in certain areas because of what they perceive as relative value.
On a strong hunch, I'd venture these are the types who like the area, and plan on staying for a while, and not investors or want-to-be investors, for the most part (though investors with big money for long term carrying costs of real estate portfolio building are in certain areas, too), and can finally afford the house or type of house they've dreamed of being able to afford for a few long years during the past bubble madness.
The users who want to live there won't be crushed if they see further depreciation, necessarily, assuming their time horizon is long enough, the area is where they want to be (e.g. close to work and recreational areas, etc.), although they won't exactly welcome depreciation, obviously.
The are viewing a house purchase as a quality of life issue, and will risk further depreciation, assuming they can afford the payments and assume the risk of shrinking equity for some time. These people are typically cautious but want, or more likely, need something now, further risks be damned.
The one area I'm actually hearing nibbling in is Tennessee.
But credit is tight, will remain so as banks and lenders in RE are quite sorry with their massive losses on their books, and the types of buyers that can afford conventional loans (with good FICO scores) or cash purchases is quite limited.
The fact that negative equity means non REO properties require sellers to bring cash, sometimes in bulk, doesn't help.
