Our friend Morgan at Blown Mortgage called Friday August 3 The Day the Credit Died. Anecdotally I have heard from mortgage brokers that this has created difficulties in funding mortgages, but I have not had any hard data.
I never have the patience to wait for the end of the month numbers, so many thanks to M for pulling these numbers for me. There is a slight bias in using the early numbers, as agents have several days from closing to update the MLS, so when looking at YOY, remember that the drop might be slightly overstated. Checking in the middle of the month however, I expect that discrepancy to be slight.
Hold on to your hat folks, here’s where the Phoenix market is at in August:
[Last year there was actually a slight increase in the total sales from July to August, 6093 to 6155 according to ARMLS.]
There’s "blood in the water" as Phoenix sales go from horrible to….????
We’re down 22% MOM.
AUGUST 1-14 1,272
JULY 1-14 1.638
As for year-over-year?
AUGUST 1-14 2007 1,272
AUGUST 1-14 2006 1,990
That would be down 36% YOY. If the sales figure for all of August does indeed drop 36%, that would be a drop comparable to the declines we saw between the frenzy of summer 2005 and the lackluster 2006.
As a disproportionate number of loans close at the end of the month, there is frequently a difference in the mid-month and end of month percentages. Therefore I am hesitant to extrapolate this number and predict a 36% drop for August. However, this drop is significant enough for me to believe that due to several factors, [Inability to finance, loss of loan programs, market psychology] that August home sales will be severely impacted in Phoenix.
I’m already contemplating adjectives to use for our August headline, and I’m not contemplating synonyms for "moderate" or "normalized."