Increasing Foreclosures is a bullish sign.

Foreclosures are increasing because people who bought a house responsibly are now getting caught in the net because they have lost their jobs through no fault of their own. The Sub-Prime, over-leveraged borrower has already been flushed out. Now the Prime borrower is feeling the pinch because of the reckless behavior of the Sub-Prime borrower and the banks, AND the FED.

How can an increase in vacant homes be a bullish sign?

 

The homes are not vacant. People living in them but not paying a mortgage. Lots of people figured out that banks cant kick everyone out and have unoccupied homes that can be vandalized and unkempt.

 

why when they can live rent free in the house they are being forclosed on for a long long time. I know some people who are doing this as we speak. Have lived in their homes for the past 1-2 yrs without so much as sending the bank a dime... like they say the responsible got bamboozled on this one...

 

Why then do washington wants to push housing prices up?

Cheap housing means less outlay to mortgage and more to the economy.

If homes were 50K only then that means much less payments and more money in the economy.

 

just like price equilibrium theory in the marketplace - same will happen in real estate..

the OP makes sense in actuality..

 

Many people walking away from their mortgages not because they can't pay it, but because they are upside down and will always be upside down on it.

I don't think we are getting bullish signs from the foreclosures because of the massive surplus of empty homes. There is no job creation, so few new buyers will emerge.

When we start seeing jobs, then I will get start getting more positive.

 

Dont underestimate the deep pockets of real estate speculators - there will be a price where everything sells

 

back in the day it only took 1 wage earner to pay the mortgage.

Maybe homes need to drop to those levels.

 

Maybe they'll sell, but who will live in them?

 

Spot on. Irrationally high housing prices have been an ongoing plague on the US economy for roughly two decades. As the system resets over the next 5 years or so and the 30%ish drop becomes a permanent fact of life, budgets will be loser for the majority of Americans by a couple of hundred a month. That's the equivilent of one of those Bush 'stimulus' checks in terms of economic impact every single month.