If anything we have seen in the past 4-6 months of the Phoenix real estate, we have seen an artificially stable market in terms of high buyer demand, increasing sales year-over-year, and stable inventory.

This kind of environment supports a notion that large banks and associated lending institutions can manage the ‘bad news’ of foreclosures on the market and their earnings picture by limiting supply. As well, if they put more emphasis on short sales and letting more of these succeed prior to foreclosure, then they can further manage their ‘inventory pipeline.’

The hardest thing for a corporation is to have wide swings in its current earnings picture and outlook. So, my concern is that there would be more emphasis on a steady management of the problem even if it protracts it. More broadly speaking, the lenders and banks may also perceive that it is better not to deluge the market at risk of creating more short sales and foreclosures, reducing the values attained for the properties, and creating possibly a second downturn.

I don’t think anyone across the Financial Sector or Federal or State Governments really wants a second downturn even if they know it draws out the pain over a longer span of time.
.-= Chandler Real Estate´s last blog ..Hoover Dam Bypass Expanse – An Amazing Feat of Engineering =-.

Do I see another bailout on the horizon?