After reading the article, "After months of declines, homes sales up" in a recent edition of the Arizona Republic, I felt compelled to weigh in my thoughts.

Though well written, the article bounces on the notion that today's real estate crisis may soon turn itself around. This is a jest I find rather absurd. The article claims home listings in the valley to be around 54,000. At last count I saw closer to 60,000 on the MLS (which makes a big difference, believe me!)....but those numbers don't even include builder properties and for-sale-by-owner! This number may actually be closer to 65-70k! 

How does anybody expect the market to turn around quickly with so many unsold homes and only 2-4 thousand being sold a month? If it took us three to five years to get here then how is one to two years going to make a difference? And what about the new properties that are being listed every day? During the boom several years ago there were only about 5000 homes on the MLS...we would have to sell five to six thousand a month now to even out a year from now or at least bring back healthy figures. 

A lot of people look to lower bank rates as helping to save this crisis from getting worse. In a nutshell, what these people aren't understanding is that the lower interest rates are being given to the banks by the feds, not to the consumers from the banks. That equates to banks having tougher standards for new homeowners. If it hasn't already happened it's going to be, "If you can't put down 20% or don't have an 850 beacon score, don't let the door hit you on the way out."  

Predicting the bottom is as sure as predicting the second coming of Christ. We still don't know how outside variables (rising oil prices/the weakened dollar) may contribute to the number of foreclosures. What if the dollar continues to fall? We may see a spike in foreign investors but what about the people being forced into foreclosure? On a similar note, the number of foreclosures are driving retail homes prices down. At which point will the homeowners lash out for not being able to make a profit off of lost equity?

It's one thing to be optimistic but it's more important to be realistic. We need to focus attention on buying out these foreclosures first to grab a hold of tumbling prices. What do you think?