Real Estate Market Update for Scottsdale/Phoenix

Well we have survived the mortgage melt down and homes are still selling. YES! Oh and thank you to the Federal Reserve for lowering the Federal Funds rate by .5%. That has not really lowered interest rates for mortgages, but it will help for all the variable rate mortgages and LOC. I expect the Fed will have to act again in the near future. The problem today is not supply as much as it is demand. The net new listings (supply) are running 33% lower than this time last year, however that is matched with sales (demand) being down 44% from the low levels of 2006. This time last year, in 2006, our sales were equal to the sales in 2002. So, they were very low last year. Where has all the demand gone??? I believe a few things are happening: lack of 100% financing, No more "stated income" loans, Strickter mortgage guide lines, buyers waiting for prices to drop, buyers renting, too many foreclosure homes and HUGE builder incentives. Builders are in my mind the biggest culprits. They allowed speculators to buy their product and get around their rules. They knew who was an improper buyer and they still let them close. "Don't tell us the truth, you can't buy, but blantantly lie and it is OK. Builders keep building homes too, they just won't slow down. It use to be a builder would not start building until you sold your existing home, they need to start that up again. You see too many people are buying new homes with unrealistic expectations on the value of their home. Then they walk from the new build. Those SPECS are then sold with huge discounts, just destroying the resale market. Hopefully the builders will start to catch on. They hold the key to recovery in this real estate market.