If you build it, sometimes they won't come. Good article actually from the Arizona Republic today - didn't have the usual realtor and builder quotes. Congrats! But the paper is still full of ads for these projects - those developers have gotta be a little pissed at the coverage today of their impending doom...
Seriously, it's hilarious all the condo projects going up or being advertised in Phoenix. Hilarious. And you know any would-be flipper has pulled out, leaving the developers many a sleepless night... and margin calls are just around the corner
On prime pieces of land across central Phoenix, Scottsdale, Tempe and recently even in the bedroom communities of Mesa and Ahwatukee, signs are going up promoting upscale condominium towers and lofts.
But at many sites, those signs will be the only things erected for a while. Maybe ever.
The pricey residential high-rises going up now have more competition than just the more affordable tract homes on the edges of the Valley. Many investors who bought units in the first wave of high-rises now are trying to sell.
"Condo developers are now competing against speculators," said Jay Butler, director the Arizona Real Estate at Arizona State University's Polytechnic. "A lot of the early condo investors in the Valley can sell for less than what is being sold new and still make a profit."
March 05, 2006
Phoenix: Valley flooded with condo projects - High-rise units won't all be sold, analysts fear
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US mortgage bonds face risk if house prices fall-BIS
Sun Mar 5, 2006pm ET
FRANKFURT, March 5 (Reuters) - The expansion of new types of home loans in the United States means mortgage bond holders may be exposed to bigger than expected losses if the housing market cools, Bank of International Settlements staff research said.
An article published in the latest BIS quarterly review said the boom in private mortgage lending and the extension of loans to households with less than perfect credit histories had exposed investors to higher risks.
"The significance of this additional risk has been disguised in recent years by housing price appreciation," researcher Allen Frankel said. But now there were signs of the market cooling.
"To the extent that some investors may have failed to recognise the degree of sensitivity of their MBS investments to housing market developments, they may be exposed to losses in excess of what they had anticipated."
Non-traditional mortgages helped extend a five-year rally in the U.S. housing market by reducing monthly payments and allowing homebuyers to afford ever-pricier houses.
But some economists now worry that as interest rates rise, so will defaults as borrowers may find themselves unable to make payments, also pressuring the banks that offered the mortgages and the investors who hold much of the risk due to their purchases of mortgage-backed securities.
The BIS said while the U.S. mortgage market was still dominated by the government-sponsored Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac (FRE.N: Quote, Profile, Research), non-agency MBS issuance had almost doubled in recent years.
At the same time, more than 75 percent of new loans issued by private lenders now went to borrowers who missed out on the top "prime" credit rating and who often paid higher interest rates as a reflection of the added risk of default.
The BIS said the common practice of using average credit scores to price mortgage pools could lead to a systemic underprediction of default risks and leave investors exposed if housing prices turned down.
Market pressure, driving down mortgage costs, also made it more difficult to assess the risk of borrowers refinancing and paying off loans ahead of time, depriving investors of a revenue stream, BIS said.
http://yahoo.reuters.com/news/articlehybrid.aspx?type=comktNews&storyid=urn:newsml:reuters.com:20060305:MTFH58138_2006-03-05_20-01-16_L03315106&rpc=44
azcentral admits prices are falling
"It's anybody's guess how far they (prices) might drop down."
story
Builders will stop building , in five years the supply will go down again and demand will start its ugly head up again as long as interest remains belows 8% In the
short run flippers and people who have to sell will get hurt a little . The bulk of people are long term owner occupied people who arent even concerned about the real estate cycle .
Did HP's campaign to straighten out those hacks at the newspaper have an effect?
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