Phoenix housing market hit by unprecedented plunge in demand
Goodbye cash buyers
ZeroHedge is taking aim at plunging home values in Phoenix. Is the blog kicking the on-again, off-again housing market while it's down?
No. There is a reason Phoenix is special selected for unique scrutiny, the blog explains:
"The Phoenix housing market has a special place in the heart of housing bubble watchers: together with Las Vegas and various California MSAs, this is the place where the last housing bubble was born and subsequently died a gruesome death which nearly brought down the entire financial system."
Here's what's going wrong today, in a nutshell:
Cash purchases have been running at an unusually high level but this has been on a declining trend over the past year. In Maricopa County the percentage of properties recording an Affidavit of Value and purchased without financing was 25.0% in May 2014, significantly down from 32.3% in May 2013. We consider 7% to 12% the normal range for cash buyers, so mortgage-lending still has a long way to go to get back its normal share of the market.