I couldn’t help but notice these two different points of view on the Phoenix market yesterday:
From Catherine Reagor in the Arizona Republic:
No one is calling for the Valley’s housing market to crash as it did in the late 1980s.
From Doug Duncan of the Mortgage Bankers Association, quoted in Yahoo Finance:
The worsening performance [in mortgage delinquencies] was driven by two factors — heavy job losses in the Midwest states of Ohio, Michigan and Indiana and the collapse of previously booming housing markets in California, Florida, Nevada and Airzona.
So no one is predicting the Valley’s market to crash, as it has already collapsed? Or do we assume that the rest of the Arizona has collapsed, leaving Phoenix crash-proof?
Or maybe we assume that the Phoenix market is viewed a little more objectively from outside our borders than it is from within?
Twist,
The Phoenix market is viewed with much disbelief here in Wisconsin.
I tell a few coworkers how I sold my last house in Peoria for almost double what I paid for it the year before and jaws drop. Then I tell them I did the same thing in Scottsdale a year before that and they look freightened. Now I just sold my house out in the country after living in it for 2 years without losing the cash I put down (I broke even) and I add that it sold in 6 weeks and they hate me. Houses are taking a year or more to sell out here. I must be on a winning streak.
No one is calling for a severe housing price crash in Phoenix?
Really Cathy? Please read more.
The late 1980s? You ain’t seen nothing yet.
This article also touches on another issue: the idea that the Phoenix housing crash (yes, crash, CR) is a sudden, somewhat recent development. This really is not true. While the Phoenix bust (along with national lending/housing bust) may be progressing a bit faster than past downturns, it was far from an overnight phenomonenon. By late summer 2005, the bidding wars (at least the legitimate ones) had largely disappeared. Many houses were still selling at “peak” prices, but the “add 10 grand to last month’s sales price and sell in a few days” model was already over. Some closings brought the peak prices forward a couple of months in terms of final sales dates.
In the suburban areas like North Peoria and Surprise that I have watched closely, generally speaking, the highest sales price recorded between August 2005 and November 2005 remains the highest sales price to this day. Two years of post-boom decline (accelerated in the last six months by the lending meltdown) and it feels like we still have not reached second base. If someone in a housing-related business really thought that this just suddenly happened, they simply were not paying attention. If they had a better grasp of economic fundamentals, they would have seen it coming in late 2004 (earlier in bubble markets outside Arizona).
Russ-
I usually get an email when Igor’s got a comment in his clutches. I just found yours down in the dungeon when I was kicking around down there. I wasn’t notified. My apologies for the delay.
As we know, Catherine Reagor can’t see past the Republic’s advertising revenue.
When she says “No one is calling for the Valley’s housing market to crash” she means “everybody that pays us is praying that the Valley’s housing market doesn’t crash”. Oopsies, too late.
“I usually get an email when Igor’s got a comment in his clutches.”
It is not the biggest deal in the world, but I have been clutched much more recently than in the past. Am I doing something to trigger it?
Russ -
All we can say is … Igor moves in mysterious ways
Russ-
In theory Igor is suspicious of anyone posting two or more links, or certain “spammish” words. [i.e. I think he's suspicious if one were to mention say "Viagra" or "prescription medicatitons."]
In reality, we’re never quite sure what sets him off- that’s how he earned his name!