From USA Today, this is an interactive chart (click the link for the interactive map) showing the population trends in the U.S. over the past six years ending 2006. No surprises here with Maricopa County one of the top growth centers in the nation, but like all things in life a picture is worth a thousand dry statistical words.
"Son, if you really want something in this life, you have to work for it. Now quiet! They're about to announce the lottery numbers."
Homer Simpson
From MSNBC, Fed cuts key rate by half-point:
The Federal Reserve Tuesday responded aggressively to a housing downturn that threatens to spread to the broader economy, cutting its main benchmark interest rate by a half-percentage point and broadly lowering borrowing costs.
"Today’s action is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time," the Fed said in a statement.
While a rate cut had been widely expected, the aggressive half-point move surprised analysts. The stock market soared immediately after the announcment, with the Dow Jones indutrial average jumping more than 100 points in the initial minutes.
It's important to learn lessons from the past, even if that distant "past" was just in the Spring. As the market was twisted and inflated with easy money, so went prices and people stretched or being forced beyond their means. The housing market, like the stock market, can give you a burn when you're in the wrong place at the wrong time. And so go the tales as we witness the aftermath (fear not locals...urban Phoenix is weathering the storm quite nicely). Phoenix, not surprisingly rates far down the list. Although real estate was in a frenzy and prices reflected this lucky reality, Phoenix started this boom with lower prices and cheap and available land. Although we were frothy in some submarkets in the Valley, we were not on steroid overkill like the extra frothy, foamy, triple latte, mocha venti x-tra hot markets on both coasts. While Phoenix rates in at 13.9% of the population spending 50% of their budget on housing, markets such as Los Angeles, San Francisco, San Diego, CA inland cities, Miami, and New York are paying upwards of 20-26% of their budget on housing stretching those household dollars real thin. Housing costs punish family budgets:
The world has hardly crashed in on us yet its time for us all to "get real" in the new housing and mortgage environment. This blog will continue to help you understand the housing and mortgage market and the forces that are shaping change today. Yet I am hesitant to simply quote the "mainstream media" and their sometimes calculated take on the days news. The market will remain in Phoenix; a little softer, perhaps subject to a mild downward migration in prices in certain locations (and in the outlying new suburbs and exurbs - it's going to be a long painful 2008 for you!), some buyers sitting on the fence (although I'd argue that should only affect the investors - otherwise the market is now very buyer-friendly), and a painful market period for all but the luckiest investors that purchased in the past 1.5 years and are trying to sell for a profit. Starting today I'm going to start quoting more blogs and "non-traditional" sources. Many are written by people from the industries affected by change and most with the credentials to best understand what's going on: without agendas, deadlines, or corporate or political pressures.
So I'll quote outside sources more often to give the broadest possible opinion on the "state" of our housing, mortgage, and national economic market. There are a lot of bright people blogging and disseminating information out there. I'll do the research to find great opinions, and then I'll stand out of the way and let them have their say.
