Phoenix Prices Up

On September 28^th  S&P/Case-Shiller Home Price Index shows that as of July, Phoenix home prices were up 3.4% from July 2009 throughout  the city.  While encouraging, this is a modest  gain and wording in the press release is that  “home prices crept forward,” and that anyone expecting a rebound to 2005 levels are off the mark. 

Mortgage Delinquencies Decreasing

I think we’re all aware that the distress inventory, short sales, REOs or bank owned properties,  has weighted us down with inventory, putting supply versus demand out of whack, and also contributed to pricing  drops in nearly every community.  While this creates an amazing buying opportunity, to return to a balanced (supply versus demand) market, the flow of distressed properties to the market must begin to ebb.   An encouraging report  today regarding mortgage delinquencies may be a harbinger of this ebbing:   

Serious Delinquencies Fall for Fifth Month in a Row  (Nathan Becker, Wall Street Journal, 9/30/2010) 

 “Fannie Mae said serious delinquencies on single-family mortgages slid in July from June, the fifth-straight month of declines, further signaling that home-loan problems were on the downswing. 

 A host of data have shown delinquencies easing this year as the U.S. economy heals. The number of serious delinquencies in Fannie’s portfolio—loans at least 90 days behind for single-family homes—dropped in March from February, marking the first month-over-month decline in three years. They have been sliding ever since. The rate fell to 4.82% in July from 4.99% in June, reaching a 10-month.” 

A Market Rebound in 2011?

Although many experts report that we have a way to go,  a few more brave souls point toward stabilization being within sight, some even saying the situation is ripe for a rebound.  In A housing rebound? Yes, it’s possible,  Nim-Hai of Fortune writes this month that although we still have a glut of inventory, and the weak market is not behind us yet – some are seeing good signs of “traction.”

Credit Suisse says “the worse is behind us and that the fear of another hit on the housing market is just overreaction.”  She points out that Bill Wheaton, economist at MIT’s Center for Real Estate, thinks that  “the housing market is poised to make a strong comeback, and calls home construction ‘a sleeping giant that is about to wake up.’  Like a cool and refreshing breeze, he goes on to say that housing demand will return to pre-recession levels in 2011, and that recovery of the home construction sector will be a a major economic trend.