The LA Times is reporting that the Phoenix housing market is out of it’s bust and is in a quasi-boom.  They tell the stories that the agents on the streets are telling, too.  

Multiple offers.

Frantic bidding wars.

Paying over asking.

Placing 15 offers before getting acceptance. 

Lack of selection and inventory. 

Sound a little familiar?  Maybe like 2005?  

Here’s my take:  

At the request of the federal government most of the large financial institutions put a moratorium in place starting toward the end of last year that wasn’t lifted until April 1.  The moratorium halted many foreclosures.  My short sale clients in foreclosure were getting automatic postponement of their foreclosure dates 30 days at a time.  

Now that the moratorium has been lifted I see the tell-tale signs that the banks are ramping up their foreclosure inventory.  I do BPOs (Broker Price Opinions — like a mini-appraisal) for several companies and there have been more BPOs lately than I have ever seen.  The banks are determining values on homes and getting ready to start a new wave of foreclosures.  

So, we’ve had conditions that have inticed the buyers to come back into the market (mad-crazy low pricing, great rates, 1st time buyer incentive tax credit) but not added 6 months worth of foreclosure inventory into the market.  

What does that do?  In my opinion, it creates a false frenzy.  A skewed supply/demand issue.  Bidding wars, multiple offers, increased pricing.

It IS (no doubt) a great time to buy.  But I caution you against starting to that we are out of the woods yet.  Go buy a house.  Better yet, go buy a house with me.  But be careful that you don’t get caught up in 2005 mentality again.

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