Prepare For The Coming Housing Collapse
Sept. 6, 2012
For months, a slew of pundits have pointed to figures which allegedly show that home prices are now on the rise around the country. Nearly all refer to the Case-Shiller price index which has become the gold standard of what’s going on in housing markets. The June index revealed that the year-over-year price declines for 20 major cities had finally ended. Prices in June were higher than May in most of these metros. Analysts were most excited by how Phoenix had turned around. The Phoenix index was up by nearly 14% year-over-year.
Okay, let’s see what is really occurring in Phoenix. My source is Phoenix realtor, Leif Swanson, whose charts I have used in several previous articles. It is not an index and shows the raw sales data for homes sold in Maricopa County where Phoenix is situated.
In the spring of 2009, 2/3 of all sales were REOs. A year ago, it was still nearly 40%. By July 2012, that percentage had plunged to a mere 11%. For the last year, the banks have tightened the spigot and dramatically reduced the number of foreclosed properties which they put on the active MLS.