People who watch housing prices have predicted for months that another deluge of foreclosed homes would soon hit the market -- once again crushing Sacramento-area property values.
But the flood of bank repos hasn't materialized. And now, a leading California foreclosure analyst says it probably won't.
"From the things I'm seeing, there's not going to be a wave any time soon," said Sean O'Toole, president of ForeclosureRadar, a Contra Costa County firm that tracks mortgage defaults and foreclosures.
Despite a growing number of loan defaults and delinquencies, O'Toole said banks are now selling more homes than they're repossessing -- and political pressure on them to work with homeowners is slowing foreclosure rates. Other market watchers also see banks slowly dribbling out their supply of repossessed homes.
"From all appearances, it does look like they're managing it better," said Charlene Singley, president of the Sacramento Association of Realtors.
If the supply of homes for sale remains in balance with demand, the danger of another sharp downturn in prices is lessened, at least in the short run, O'Toole and others said Thursday.
The prospect of another wave of new foreclosures has long threatened to destabilize a capital-area market precariously balanced by massive repo sell-offs, curtailment of new-home production and buyers enticed by lower prices, low interest rates and tax credits.
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