demand and supply vs rate cut + banked owned homes

**sac25274** · 02-12-2008, 10:49 AM

Hey folks, I don't know much about the real estate industry but there's something I need to ask. I noticed there are so many homes being built, but those numbers exceeds the number of buyers in the real estate market. According to the law of demand and supply, if there are more supplies that demand, then a house would lose its value or be worth less. But since the Fed has cut rates to half point, will the numbers of demand increase or will other factors discourage consumers from buying? If more buyers decided to step into the market, when should one expect to see an uprising trend?

What about the numbers of bank-owned homes? Will this number increase or drop in anytime soon? Don't this factor have any effect on the market? Your opinions would be appreciate. Thank you.

**brechtp** · 02-20-2008, 09:01 AM

2008 should see an increase in bank owned homes and foreclosures. This will lower prices. Easy and cheap credit will increase demand except for the fact that guidelines are becoming so much more stringent that many will not be qualified to borrow. Every market is different housingpredictor.com offers an unbiased outlook in my opinion.

**Codythebest** · 02-20-2008, 09:28 AM

The new construction has also the problem that builders had a plan and permit years in rear. They begin to build when the market slow down and they can go back. Same think when the maket begin to increase, builders see an opportunity, ask permit, and build years after...
Supply and demand react strange here in East TN. We have overnight cabin rental at the foot of the Great Smoky Mountains, a big deal here and very touristic. Some of there are set at 20% CAP, bring a couple of thousands of dollars NET every month but they're not even shown by others agents. So, that's a dead-flat market!!!
Lots of people are living with their own problem. Until one day, one buyer will realize that , with owner financing-0 down, he will make 2 grands/month/unit...The market will be back again then...