In the spring of 2007, we heard that a mortgage company had closed its doors. By summer, several lenders had failed, and no-documentation loans were history. The median price of a Phoenix home had peaked at $262,000 a year earlier and was now down to $252,000. By September 2007, the credit crisis was in full swing, and more than 1,000 escrows canceled because the buyers no longer had financing. That December, there were almost 60,000 homes for sale, and only 3,318 sold, meaning the average seller could expect a sale in 18 months.
In 2008, prices tumbled, and we didn’t see a bottom for 16 months. In January 2008, the median Phoenix home price was down to $235,000; by April 2009, it was half that ($117,500). During this slide, foreclosures flooded the market, and almost everyone agreed that the way you practice real estate had changed forever.