Housing Doom

From CNBC this morning:

Democrats and Republicans in the U.S. Senate agreed Tuesday to draft a housing rescue bill that could deliver billions of dollars to homeowners facing foreclosure and help steer the economy away from a deep recession.

Democratic leaders want the federal government to pay for more mortgage counselors, rehab projects for empty homes and tax breaks for borrowers stuck in unaffordable loans. Perhaps the most controversial provision of their plan would let bankruptcy judges erase some mortgage debt.

Lawmakers and policy-makers on all sides agree that the country is facing a tough economic crisis led by a wave of failing home loans, but Republicans generally resist a big government bailout.

A "bailout" bill can only partially address the symptoms, it cannot solve the problem.  The problem is that there are too many homes for sale, and the price of these homes remains above the fundamentals.  Until these conditions are gone, falling prices will continue to wreck havoc with the housing market and the economy.

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Many thanks, as always, to M for pulling the numbers from ARMLS for our March preview.  Do remember that agents have a couple of days to add sales in, so this number may be slightly lower than the number ARMLS releases at the middle of the month:

 ARMLS is reporting home sales of 3445 in February, so month-to-month March saw a lot more activity, but this is typical for the season.  This is the worst March since March 2001[the earliest data available to me] when 5704 homes sold.

There was one big surprise this month- there was a marked increase in sales in Queen Creek and Maricopa:

QC-Maricopa

Active       2,990
Sold            337          +68.8%  YOY.  

8.8 months of inventory

M asks "But is this sustainable?" I have to ask the same question. Particularly when he gives us the following breakdown for Queen Creek sales:

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In January 2007,  Doom received information that a  mortgage office had shut down- and that the contents were being sold at auction.  Files remained in the cabinets and the hard drives were not wiped.  Mortgage files contain a great deal of personal information, and with the large number of lenders that have gone under, the disposition of these files is a serious concern, and the potential for identity theft is huge.

I was perusing Broker Outpost last night, [a bulletin board for mortgage brokers] and ran across this comment:

A company across the street is throwing away full loan files…with credit reports, bank statement, etc….who do I call to report this to?

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