You have likely heard of the Phoenix, the mythical firebird that would rise from burning ashes, but did you know that this Phoenician tale played out as a metaphor for death and rebirth?
The new rising Phoenix was rising from the burning nest set ablaze by its parent (or its former self if you prefer immorality) in the final days of its long life… so new life resulted from a conflagration of death and destruction.
In the present day metro area housing market of Phoenix though, it may feel like renewal is a long way off.
Phoenix ignited in mid-2006 and still burns to this day.
Looking at the Radar Logic RPX 1, 7, and 28-day aggregate residential home price indices below (click for full-screen super cool interactive chart), you can see that the price of residential real estate has retraced all the way back to levels seen in 2000.
Will the decline in Phoenix end now that the housing bubble era pricing has all but been erased?
Not likely since that market is now seriously impaired.
Although the statistical price level has reverted, the actual real-world physical market is left with the real physical aftermath… continued excessive inventory… crushed and bankrupt builders, bankers, brokers and other third parties… a local, state and national economy teetering on the brink…
When a boom goes bust, many participants would be happy to simply snap back to the life as it was in the pre-boom era but that’s just wishful thinking… the reality is, it will be many years of cleaning up the aftermath during which time prices will likely overshoot the mean and drop lower than anyone expects.
Even the mythical Phoenix had to wait three days before it could rise up again and carry its egg of myrrh to the city Heliopolis.