...and you thought Tysons had traffic now.

[G.Irish]

He's right, the foreclosure doesn't have an impact on it. It's the re-sale after the foreclosure, and how long that takes that has the impact. And if it's only one or two foreclosures it has a very minimal impact, as foreclosures aren't used as comps.

First of all, his analogy is totally wrong because of the fact that car pricing and real estate pricing have nothing to do with each other.

Secondly, while a foreclosure is not typically used in a comp it can and will affect prices when it gets sold (assuming its, you know, comparable). Not to mention the fact that right now the foreclosure are the fallout from a negative price trend.

I disagree with your last line. The people that are foreclosing are foreclosing because they can't afford their new mortgage payments. People don't walk away from a house that they CAN afford just because it's depreciated some. A guy whose house lost 50k in the last two years, but had a fixed rate mortgage for an amount he *can* afford isn't going anywhere. Most foreclosures are happening to foreigners who didnt know what they were getting into, and literally can't afford to stay in their house because the payments jumped, not because of a negative price trend.

Depends on how you look at it. If your rate reset and now the payment is too high the preferable option would be to sell the house no? Or refinance maybe. Can't really do either if the house is losing a bunch of value...

And I doubt that most of the foreclosures are foreigners. There are plenty of stupid Americans to go around.