Now look at the Alt-A troubles headed our way and you have to ask. If you were a bank president would you hold all your Non-performing assets for another year and hope they will increase in value?
There are Hedge Funds that are buying large quantities of this product as non-performing notes. They do this on the down-low and are slowing working through the inventory peeling off the goodies they want and bundling the rest for remarketing. My question is why take so long in the process. They stalling the velocity of money and contributiong to a major pool of dead properties sitting in America while REO or NPN inventories continue to rise. Perhaps they are expecting inflation to kick in and raise the value of the assets. I wonder?
My only comment about the behavior of Hedge Funds is that they are totally Myopic
!
“(BusinessWeek) New Barclays Capital research from Sandeep Bordia and colleagues shows that the recasts in the next year or so are expected to be a minor event. But by mid-2011, these borrowers are forecast to see payments that are 50% to 80% higher than what they are grappling with now. (Many of these option ARMS are concentrated in former hot-spot real estate markets, such as California and Florida.)
I have smart investors from California calling and because they see the SFR downturn in California continuing into 2012 they ask for Multi-family. Now normally I would tell ya all this is smart but times are not what they used to be. See the chart and draw your own conculsions.
Note that peak to peak time windows are 10 years, if this holds or even if it 7 year this means the vacany rates will not go down in mass and with great impact until 2015 or later.
Now review many sources in my review of this topic and I can tell you the Markets are heading for a major down turn in September time frame. Perhaps the Banks will see the benefits of selling now instead of sitting and waiting.
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