Is the housing market starting to show some signs of a rebound, or does the slowdown continue? It depends on whom you ask or what indicator you look at.
• Home-building permits across metropolitan Phoenix climbed to a five-month high in January, reports housing analyst RL Brown. The chart on the cover of his February newsletter is still “code red,” signaling a market alert to slowing, but he’s considering changing it to yellow, signaling caution.
• The number of spec homes is still high. Brown estimates there are 12,000 to 14,000 Valley-wide. Metrostudy’s figure is similar. That’s quadruple the number of homes built, but not bought, from a few years ago. Cancellation rates in some subdivisions are as high as 60 percent. But some builders have dropped prices and are drawing buyers to developments in the fringes again.
• Valley resales in January fell by 100 from December to 4,520, according to the Realty Studies at Arizona State University Polytechnic. The median price climbed $4,000 from December 2006 to January to reach $260,000. But that’s partly due to many higher-priced homes selling.
• From national housing analyst Tim Sullivan’s newsletter sent out Feb. 22: “Many of our home-builder clients in the Southwest report a notable uptick in sales in the last four weeks. None of our clients are going so far to say that the market has been corrected, but the general sense is that the last month or so has been better that any in the last six to eight months. Now if builders can continue to pay attention to sales prices, the market might find some equilibrium.”
• There were almost 16,000 new listings for Valley homes in January, down a couple of hundred from December 2006.
Subprime crackdown
Freddie Mac, the second-biggest buyer of home loans in the country, said last week it will stop buying subprime mortgage that have “a higher likelihood of excessive payment shock and possible foreclosure.”
Economists look for more subprime lenders to close their doors, because if they don’t have a secondary market to sell to, they don’t have a business.
