2 REASONS THE MARKET HASN'T HIT BOTTOM YET

I live in the Inland Empire in Southern California. The Real Estate market in which I live is so diverse that it changes from neighborhood to neighborhood. I read so many articles and studies of different areas of our country and am baffled at how different our Real Estate is compared to everywhere else. It answers to no one and follows it's own star. There are pockets of the IE that follow national trends but within a months time they can completely disregard that trend and do the exact opposite. There are many areas that I cover that are appreciating and with the FHA changing the 90 day flip rule, my guess would be that it would continue to appreciate if it weren't for 2 major factors.

Factor #1 The Foreclosure Moratorium: I'm not a big fan of it. It was almost comical to see how quickly the banks started to pay back their TARP funds when the current administration said "Alright now that we've given you $700 Billion, we want you guys to hold off on foreclosing and we'll tell you when you can start taking back your assets." It is my opinion, that if the government would have just stayed out of it we would have had a year of serious depression (June '07-June '08) and would already be on our way to a recovery. Instead of a quick depression period we are experiencing a lengthy recession. Realistically we're not even half way done with this recession, which pains me to say.

Factor #2 The Dreaded "Short" Sale: I could dedicate a whole week to writing about this factor but I wouldn't want to take my frustrations out on my keyboard (it would just end up adding to the already giant pile of eWaste). With 75% of the current properties for sale being distressed there is no wonder why banks aren't capable of handling the demand. I am negotiating several short sales and my longest one has been going on for 8 months (thank you Wells Fargo), though I've heard of some horror stories taking as long as 18 months to close. Like I stated earlier there are areas where I service that are appreciating, assuming it were a normal real estate market. How is a market suppose to get better with transactions closing based on offers written 6+ months ago?

Flipping is huge right now and the smart investors are doing that now because the majority of bulk REO deals have dried up. But do not fear, the days of bulk REO deals are headed to make a strong push towards the end of this year and well into 2011.