The Positive 800 Pound Gorilla the Media is Ignoring

I think we need to start a TV channel called PTV, for positive tv. It seems like the media can talk about nothing but gloom and doom. Too bad I can't put them all on a prozac IV and cure their depression.

What the media seems to be ignoring in this market where all the "experts" are calling for as many foreclosures in 2009 as in 2008, is that their vehicle to these foreclosures, the nasty adjustable rate mortgage, is actually adjusting DOWN and not UP. That little thing called the LIBOR has dropped so much that unless one has lost their job, why would they leave their home if their mortgage drops? Every lender I speak with said the banks are doing their best to get these people into longer term stable mortgages of 15 and 30 year fixed products and to get out of the ARMs even though their mortgages are dropping.

Why would you leave your home if your mortgage drops?

Well maybe if you work for CNN/NBC/CBS/ABC/CNBC, etc, etc, etc.

Of course these same experts could only call the market down turn once we were in a free fall. With expertise like that, I think getting ones' palm read is essentially more accurate than the soothsayers in the media.

I keep daily stats in my market here in Metro Phoenix. Pending homes under contract as of 5 minutes ago hit 8702. On Jan 1 it was 5600. Dec 1, 4100.

Every lender I have talked to in the last week is hiring help because of all the buyers and people refinancing. The bottle neck in home sales is the banks can't perform, and I suspect the title companies with their massive layoffs are also short.

December sales were up 30%. Jan was the third best Jan ever.

When Feb/09's numbers come in, the media may start to pay attention. But I doubt it. Doom is the name of the game right now.

I am telling anyone who has been thinking of buying in this market to buy now. Our foreclosure listings are below the 12,000 mark for the first time in over half a year. This inventory may dry up a lot quicker than most people realize.I have been telling my clients if we hit 10,000 pending, this game is over. The buying opportunity will close a lot quicker than people realize.

Jan 31 we had 7462 homes under contract pending to close. We could hit 10,000 by the end of February. Once the banks and title can catch up and the closings start to get closer to 10,000. The opportunity will be closing quickly. We are already seeing inventory drop. 2000 last month. 6 more months of that and we are down to normal inventory levels. I expect this month to drop more if the banks and title companies can get their mojo together.

This is the slow time of year too....May always averages 3000 closings per month more than January. This summer could be extremely busy with bubble equivalent numbers.