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Northrim Bank launched the Alaskanomics blog to provide news, analysis and commentary on Alaska’s economy. With contributions from economists, business leaders, policy makers and everyday Alaskans, Alaskanomics aims to engage readers in an ongoing conversation about our economy, now and in the future.

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Friday, December 03, 2010

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Gum

Foreclosures will weigh on prices in some areas. Others not so much. We are three years into tiegthr lending practices but I think we need to put 5 years between us and the end of the subprime era before we really get the majority of the bad loan defaults flushed through. In addition to those there will always be foreclosures related to the usual suspects, (divorce, bad economy, job loss, etc). I don't expect to see it decline until 2012 and even then much will depend upon the state of the economy. I am skeptical of seeing even the modest 3.8% appreciation next year. The purchase of bargain priced foreclosures by house flippers who then fix them up and sell them for a premium will help diminish the damage on price averages, but I am still skeptical of an increase. Really cheap bargain-basement homes or really super unusual or very exceptionally nice homes are the only two types selling right now. An average nice house with an average market price is just deadwood in the current market.

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