Housing Doom

We’re taking an early look at April sales in Phoenix, and the numbers aren’t promising.

There are a couple problems with looking at the early numbers for year-over-year (YOY) comparisons. One is that realtors have three days to update listings, so all sales for the period may not be in yet. Another is that a majority of closings happen at the end of the month, so you cannot extrapolate these numbers to estimate monthly sales. Still, the YOY preview has been giving us a reasonable indication of the general sales trend. Here’s the numbers as of 4:00 p.m. yesterday:

Based on the 967 sold number, sales appear to be down around 25% off of 2006, which was down 35% off of the 2005. Inventory however, continues climbing into new uncharted territory.

Even with sellers lowering prices, buyers are nervous and demand is low. With tougher lending standards thrown into the mix, everything is in place for a truly lackluster April.

Read the rest of this entry »

It’s a "whodunnit" of billion dollar proportions- Who is responsible for the subprime meltdown?

CNN Money said yesterday:

Some 2.4 million homeowners are in danger of losing their homes, many because of bad subprime loans. Critics are pointing their fingers at who is responsible - here are the main targets:

1.  Mortgage Brokers- Brokers steered borrowers to loans they couldn’t afford.
2.  Appraisers- Inflated appraisals put home buyers in immediate jeopardy.
3.  Regulators- Government agencies such as The Federal Reserve did not use the authority granted them under the Home Ownership and Equity Protection Act to prohibit substandard lending practices.
4.  Lenders- Lenders relaxed underwriting standards far too much and made loans they should have known would not be repaid.
5.  Wall St.- Investors bought securitized loans with no regard for whether they met underwriting standards.
6.  Real estate agents- Salespeople fed the frenzy.

What was interesting was who DIDN’T make the list- the people who took out the loans in the first place.
Read the rest of this entry »