Stuck in Phoenix, the Epicenter of Housing Crisis

[ej510]

Source: Market Watch

Commentary: It may take years for housing to bloom again in desert

In metropolitan Phoenix, two-thirds of all residential mortgages are underwater. Of these, some 200,000 are 50% larger than the current market value of the properties. Many homeowners have come to doubt whether they'll ever retrieve their lost equity.

In this city of 4 million, the 14th largest in the United States, the median home price is down 53% since the bubble peaked in 2006 to just over $120,000. Only smaller cities such as Las Vegas and Orlando have witnessed equally catastrophic drops.

Paul Hickman, the head of the Arizona Bankers Association, says for Arizona the current recession is worse than the Great Depression of the 1930s. "Then," he told Cronkite News of Arizona State University, "our economy was young and we were just barely a state." Now, he says, Arizona is suffering because it became excessively dependent on a "one-dimensional housing economy."

Phoenix is no stranger to booms and busts. Home prices here fell in the late 1980s after the savings-and-loan debacle brought down several local developers, including the notorious Charles Keating of Keating Five fame. Now 88, Keating lives quietly in Phoenix, having served a 4½-year prison term for fraud after his Lincoln Savings and Loan collapsed in 1989.



Read more: http://finance.yahoo.com/real-estate/article/113212/phoenix-epicenter-housing-crisis-marketwatch?mod=realestate-sell

[wilt the stilt]

1. I almost bought a short sale in Scottsdale

Glad I didn't. We would be down right now.

[midnight]

2. "one dimensional housing" never heard of this before..

"Paul Hickman, the head of the Arizona Bankers Association, says for Arizona the current recession is worse than the Great Depression of the 1930s. "Then," he told Cronkite News of Arizona State University, "our economy was young and we were just barely a state." Now, he says, Arizona is suffering because it became excessively dependent on a "one-dimensional housing economy."


I love the State of Arizona... So sad to keep hearing about these problems... I don't remember all the details, but read McCain was tied into the Keating five fame.

[SpiralHawk]

3. RepubliConomics = FAIL up the feaking wazoo

as usual

[Lex1775]

4. It didn't help

That California home prices shot up so high that thousands of Californians sold their homes and then came here and bought a couple of houses each... which in turn sent our home prices through the roof.

[Mosby]

5. It's a great time to buy real estate in Phx.

Some of the outlying communities like queen creek, goodyear, avondale, buckeye and surprise probably won't recover for years and maybe never.

[cbdo2007]

6. Yeah, I know people in Phoenix.....

who bought a house in 2004. In 2005 they sold their house for twice what they paid for it and bought a bigger house. In 2006 they sold that house for twice what they paid for it and bought a bigger house. Now they're underwater in their current mortgage but they made such huge profits during the boom that they haven't complained once, they just know they'll have to stay there for the next 15 years.