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The Phoenix Market |
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THE PHOENIX MARKET TODAY
Phoenix underwater mortgages show housing’s threat to recovery. One
year ago, there were signs that housing was healing; new home sales
were up and prices rising. Now, new home sales are below levels hit at
the depth of the recession two years ago, and 23 percent of all
borrowers -- more than 11 million homeowners -- owe lenders more than
their homes are worth. The renewed weakness is keeping a lid on
consumer confidence, consumption and growth.
“It keeps the recovery from being all that strong,” says Mark Vitner,
senior economist for Wells Fargo Securities in Charlotte, North
Carolina. “We don’t see how the economy can get above 3 percent
growth, except for a short period of time, with housing being so
deeply underwater,” he said.
In the 18 months after the recession ended in June of 2009, the
economy grew at an average annual rate of 3 percent a quarter. A
survey of economists by Bloomberg News produced a median forecast that
growth slowed to a 2 percent rate in the first quarter of this year,
not enough to ease the nation’s unemployment crisis.
Further home-price declines this year -- expected by analysts such as
Robert Shiller of Yale University -- would push several million more
Americans into negative equity. Home prices dropped 5.7 percent in
February from year-earlier levels, according to the Federal Housing
Finance Agency, the fourth consecutive month of backsliding.
In Phoenix, the problem is especially acute. Nearly 202,000
individuals are 50 percent or more in negative equity, according to a
Corelogic Inc. analysis prepared at the request of Bloomberg News.
More than one in every five Phoenix-area mortgage holders would need
their homes to double in value just to break even.
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"NEW MARKET REPORTS"
PRIMEAU FINANCES:
Golf Courses
Shopping Centers
Self-Storage Units
Apartment Buildings
Construction
Office Buildings
Gas Stations
Refinance
Restaurants
Funeral Homes
Hotels/Motels
Mobile Home Parks
Retail Stores
Car Washes
Automotive Services
Mixed-Use Buildings
Marinas
Auto Dealerships
Retail
Shopping Malls
Raw Land
Bed & Breakfast
Assisted Living
Condotels
Parking Structures
Condominiums
Light Industrial & Warehouses
Other Income Producing Properties
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