For months the Luxury Real Estate Market in Phoenix Arizona has pushed on strong despite Maricopa County's sales velocity being down 70% from the high's of 2005. But that too is starting to slip and pricing pressure increasing due to high inventory levels...

Sales of Million Plus Dollar homes in Maricopa County in the 1st quarter of 2008 was down to 284 units - down 40% from 2007's 478 units over One Million.

There are nearly 4000 homes actively listing for sale in the Phoenix Market priced over one million. In Phoenix Suburb Ahwatukee, only 2 homes have closed escrow with a sales price over 1 Million thus far in 2008 - down significantly from 2007.

While all of this could turn into a mere blip on the radar, it is possible that the once immune luxury market will continue to cool off due to rising inventory and tightening credit markets making it more difficult for buyers to obtain creative financing solutions. 

It will be interesting to watch developments in second quarter of 2008.

Here it is...8:18 pm, I think my day is finally winding down, I'm de-stressing, one final email check (always a dangerous thing to do at night) and I get a message from a agent-friend of mine at ReMax. He sent me a link to a YouTube Video. And instead of being funny...it kinda opened the fear-flood-gates a bit (not exactly the type of email you want to get a couple hours before you turn in).

It's about "Lock Bumping". And evidently, the Internet is loaded with step-by-step instructions to open 90% of locks with a special key being sold on the Internet for a few bucks.

Anyway, here's the video:

Here in Phoenix, homes are still selling at a good pace. In all likelihood, the Phoenix market is skipping along the bottom in terms of sales velocity. However, with high inventory rates, there continues to be downward pressure on home values and as a result, home prices are still in decline mode. 

The most common mistake that home sellers and/or their agents make is "following the herd". Despite what the media says about market conditions, the highest value, best priced homes (the top 10%) are still going pending at a healthy pace...and often quickly! These are homes that are priced well from day 1 of activating on the market. Where home sellers fail is pricing their home in the same cluster as everything else. Sooner or later an well-educated (in market conditions) seller (and their agent) will come along, price well-below the cluster and go pending quickly...then "the herd" slowly, often begrudgingly lowers their price to what was once a value for the neighborhood - at this point the price adjustment is often too late...it becomes the new baseline and no longer perceived to be a value or "steal" to buyers.

Go lead the herd!

Since this website is focused on the housing market in Phoenix, we'll stay focused on what fed rate cuts means to us here in Phoenix. In short...it doesn't have any immediate impact on the market - houses aren't going to start flying off the shelves...so if you have your home up for sale, don't expect a slew of offers just yet :-).

Rate cuts are anticipated by lenders and therefore interest rates are normally adjusted prior to this...what does matter are the comments made by the fed that may or may not indicate further cuts - which may have an impact on rates (lower or higher).