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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (61906)	5/24/2006 3:35:27 PM
From: James M. Belin	Respond to of 110194

To all: So far prices of homes in the Phoenix market have remained stable. There continues to be an incredible amount of complacency. The conventional wisdom is that prices will stabilize for a while before resuming an upward trend. My realtor friend says that so far he has not seen a surge of forced selling. However, if inventories remain this high, forced selling will follow. For comparison, inventory of homes in Phoenix in May 2005 amounted to 6,000 homes. In April 2006, 6,731 homes were sold in Maricopa county. At the April 2006 rate, inventory stands at about 5.9 months. The permabulls in Phoenix would say that the market is in rough balance. I strongly disagree. I continue to believe that if by July 2006, inventory levels have not dropped substantially, sellers will begin to be scared. By the way, the real estate bulls in Paradise Valley continue to believe that this posh suburb is bulletproof. I know of a home that just sold after being on the market 217 days. The original asking price last summer was $3,100,000. The final selling price was $2,375,000. Now there is no question that the sellers still received a windfall. The mortgage balance was around $450,000. However, the 23% drop in selling price was something that almost all of the realtors in this town would have said last summer was impossible. I cannot tell you how often I heard people who live in Paradise Valley brag that homes there only go up in value over time. Jim