in the past several weeks, many large financial institutions and major depositor banks have been giving indication into the current and future financial impact into their impact of the sub-prime debacle.
Many large banks, if not all, were extremely hard hit by exposure to sub-prime mortgages and warned of potential heavy losses going forward as a result. 
Almost every major depositor bank and Investment bank has reported their 2nd quarter earnings.
These stocks and the financial sector as a whole hit drastic annual lows on and about July 15th in anticipation of severe quarterly losses .
However, since July 15th, these stocks have rebounded as a group dramatically.
- Morgan Stanley has gone from $32 - $45; up 40% in 3 weeks.
- XHB (home builder stock index) has gone from $14.70 to $19 today; up 30%
- XLF (Financial stock index) has gone from $17.20 - $22 ; up 28%
Yes, the companies remained cautious in their outlook going forward.
However, the effect on earnings as a restult of sub-prime exposure was less than experts and analysts predicted.
In fact, it looks like Wall Street may have overreacted in its estimates of damage to credit and housing based upon these earnings reports.
What does all this mean?
Wall Street seems to interpret this, at least today :) , that although, their may be some further pressure on the housing market, that possibly the worst of the sub-prime market and the tightening of credit, may be moving into the rear view mirror.
Analyst Alex Potter, said, the "outlook statement is very muted" , however, "the U.S. performance was well above worst fears."
I urge you to be cautious as the future is still a little unclear. We have some unique issues in Phoenix, Scottsdale, Tempe, Fountain Hills, Mesa, Peoria, Glendale, Paradise Valley that differ from the rest of the Country.
However, if you have been planning on buying a home, can negotiate a great price and most importantly, can afford your fixed mortgage payment, this may be the time to buy that you have been waiting.
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Copyright © 2008 By James Wexler, All Rights Reserved. *a sign the sub-prime mess is behind us! *
Contact James Wexler (480) 221-8080 for all your Phoenix Scottsdale area Real Estate needs.
I dont follow the stock market. but, it seems that overreaction is what caused the bubble, and then stock market drop of last 9 months and now an overreaction on home prices. as a lender we are seeing a pickup in buying now that prices are much lower.
James - That's very encouraging news! I certainly hope you are right! We are beginning to see signs of an "emerging" marketplace here. . .But I think many of us are still a little gun shy!