Phoenix Business Journal – by Adam Kress
Single-family home prices are dropping at record levels, and the Phoenix area is getting hit harder than most.
According to the National Association of Realtors, home prices dropped 7.7 percent from first-quarter 2007 to first-quarter 2008. In Phoenix, the numbers were down more than 15 percent, to a median sales price of $220,200 for the period.
The NAR said this was the largest year-over-year decline since the group began reporting prices in 1982. The national median sales price was $196,300 for the first quarter, down 4.8 percent compared with the last three months of 2007.
The Housing Crisis is over?
May 9, 2008
In the opinion piece, The Housing Crisis is Over?, from the Wall Street Journal, reports that Cyril Moulle-Bertaux suggests that April 2008 marked the bottom of the U.S. housing market. And in his R.O.I. column WSJ’s Brett Arends makes a similar argument. He looks at the data on housing starts since 1972, which shows that new housing starts slumped below the one million mark in March. Every time that has happened in the last 50 years, Mr. Arends writes, it proved to be the bottom of a recession. Mr. Arends points out that Bill Wheaton, a legendary real-estate professor at the Massachusetts Institute of Technology, has also suggested that fears about the real-estate crash were overdone. And he points to a private portfolio manager in London, who said the homebuilding stocks on Wall Street were at last a “buy.” In the Journal editorial, Mr. Moulle-Bertaux suggests that the housing market will revive, as more first-time buyers are lured in by falling prices and lower mortgage rates. “Homes on average are back to being as affordable as during the best of times in the 1990s,” he writes. “Numerous households that had been priced out of the market can now afford to get in.”
Older Homeowners Cautioned On Use of Reverse Mortgages
March 17, 2008
The Financial Industry Regulatory Authority urged homeowners over the age of 60 to carefully weigh their options before tapping into their home equity through reverse mortgages to obtain additional income for their retirement years. The group, formed by a merger of the NASD and some regulatory functions of New York Stock Exchange parent NYSE Group Inc., warned that a reverse mortgage — an interest-bearing loan secured by the equity in a home — can jeopardize their financial futures.
With a reverse mortgage, a bank makes payments to a homeowner instead of the homeowner making payments to a bank. The loan is repaid, with interest, when the borrower sells the house, moves out or dies. Reverse mortgages have high fees — typically about 7% of the home’s value — and they make it difficult for homeowners to leave the property to their heirs.
Read the whole article at realestatejournal.com.
