Tsunami, or Preamble to More Government Intervention?

I used to be in the camp that believed a "tsunami" of foreclosures was about to hit the market, creating an influx of supply and thereby putting significant downward pressure on prices.


But that tsunami never came. And despite month after month of extremely limited (and declining) supply of bank-owned properties, anecdotal evidence would continue to emerge, typically from "a cousin's friend's fiancee's vacuum-repairman's niece," insisting they had it on good authority that banks would start stepping up foreclosures any day now.

And once one bank starts dumping properties on the market, other banks in the cartel will have to follow suit to get ahead of the rapidly declining prices. It'll be a bloodbath!

Yeah. Whatever.

Long ago I gave up on the idea of free markets in this country, and wrote the foreclosure tsunami off as more wishful thinking from buyers (like me) who simply wanted to buy a reasonable house for a reasonable price. A flood of new inventory -- priced to sell -- would certainly do the trick in returning prices to realistic levels, so it made sense for buyers to cling to such a hope. Alas, the government machine was too powerful, and would apparently stop at nothing to keep home prices artificially inflated and out of line with typical household incomes.

But interesting little info nuggets -- not quite hardened fact, but more than just anecdotal -- have popped up recently. To wit:

Calculated Risk: San Diego Surge in Foreclosures

Irvine Housing Blog: BofA to Increase Foreclosure Rate by 600% (hat tip SR)

Breitbart: Foreclosure Rates Surge, Biggest Jump in Five Years

RealtyTrac: March Foreclosures Highest on Record

And this from Redfin:

Long Beach March trends:
Inventory up 8% vs. Feb
Inventory up 9% vs. last year

So, what do you think? Is this the "tidal wave" of market-clearing REOs beginning to crest, or is this just another excuse for the .gov to create another acronym-laden program to keep deadbeats in their (our) homes?

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