Mav Realty

Hi,

Each week I get a couple emails from lenders and title companies about the market- what has happened and what is expected.  I am including some exceprts from this week's emails, as I think it is good to point out some of these things.(I am not quoting a source, as this particular email is received from a couple different people.)

"... when Gentle Ben (Bernanke) briefed the Senate on Thursday, the markets slid. Investors didn't like the Fed chief's comment there could be some bank failures amidst all the credit market turmoil. They curiously ignored his more significant observation that capital ratios remain good among the largest banks. Too bad, because all those negative vibes around the financial sector and the economy kept things sliding enough on Friday to result in a losing week (on Wall St).

The Dow ended at 12,266.39, down 0.9%. The S&P 500 fell 1.7% for the week, closing at 1330.63. The NASDAQ had a shallower 1.4% decline to 2271.48.

Economic indicators were up and down too. We got worse than expected reports for new home sales, the producer price index, consumer confidence, durable goods, weekly initial jobless claims, and the Chicago purchasing manager's index. But we also got better than anticipated existing home sales, personal income, and personal spending. The economy has slowed, but is clearly not in recession.

It would be hard to tell that from the media. But the number of economists who think we're heading into a recession is still in the minority. Most experts believe we are experiencing a slowdown but do NOT see the consecutive quarters of negative growth that define a recession. Many look for the benefits of the aggressive Fed rate cuts and the huge fiscal stimulus package to kick in starting early May.

Turbulent stock markets drove quality hungry investors to Treasuries. The benchmark 10-year T-bill gained over a point, its yield dropping to 3.535%, from 3.788% the previous week. This is good news for mortgage rates, which should remain at very favorable levels."

Regarding the housing market - "The numbers reported last week showed the housing market overall is still in a weakening trend. Sales of new single-family homes were down, slightly below estimates. Price declines continue. But here are some silver linings for the dark clouds the media loves to float over us...

In January, sales of single-family existing homes increased slightly -- for the first time in eleven months!

In addition, the inventory of new homes fell by 2,000 in January, to 482,000 -- the lowest level in more than two years!

This could indicate that a peak was hit in December and that we could be near a bottom. Many people feel that the inventory of completed new homes is the number that has the greatest impact on future building activity and price trends. "

Now for my periodic diatribe on the media.  It still confounds me that the media is so negatively driven.  Why is it always the worst side of things that are shown.  I guess it is the same reaon that for years the major local news stories include the murders, and other crimes as the seemingly most predominantly covered.  Imagine if our newscasts focused on the positive stories each day and not the crimes.  Maybe that would help to breed a more positive attitude and there would be less crime.  No, I am not living with my head in the clouds, this isn't Utopia.  But the negativity continues to breed more negativity.  The same would happen in reverse if the positives were transmitted.  I am not hiding from the fact that there is bad in the market, but a better balance of reporting would let the market take it's own course and not push it in the direction the media wants it to go for better ratings.

OK, I'm done.

Have a great day!

Adam Tarr, ABR,ePro, Assoc. Broker
RE/MAX Excalibur
Scottsdale, AZ
480-483-3333
adam@WeAreAZRealEstate.com

www.WeAreAZRealEstate.com