Interest rates and housing

[ThePythonicCow]

Re: Interest rates and housing

What happens when/if that supply comes "loose"?

Can we think of that overhang of REO homes as a large number of calls ... anytime Bank of America could actually sell one of them at the price they want, they can "call" up one of these homes from the overhang, basically for free.

A low put/call ratio (more calls than puts) is bearish. This overhang would seem to guarantee no significant upswing in "real" inflation-adjusted housing prices until the overhang is worked through, or rots out.

[cjppjc]

Re: Interest rates and housing

Can we think of that overhang of REO homes as a large number of calls ... anytime Bank of America could actually sell one of them at the price they want, they can "call" up one of these homes from the overhang, basically for free.

A low put/call ratio (more calls than puts) is bearish. This overhang would seem to guarantee no significant upswing in "real" inflation-adjusted housing prices until the overhang is worked through, or rots out.

Rots out is right. You can't keep a house vacant for years and not expect damage. Imagine all the ways water can get in.