Phoenix AZ real estate, Scottsdale Real Estate and even Paradise Valley real estate are continuing a steady decline even as the $700 Billion economic packages is starting to create liquidity in the banking system.

The problem is that the banks are not required by the legislation to lend money. Yes, you are reading correctly. They can sit on the cash, shore up their balance sheets and not lend. As a result, only the most credit worthy borrowers are able to get car loans, credit cards and mortgages. Mortgage being the most difficult as re-finances are next to impossible due to falling home prices and purchases require 10%-20% or more to qualify for a fixed-rate mortgage.

As a result of weakened financial stability demand for Oil continues to Drop. If there is a flicker of shining light, but very small, consolation prize of the severe drop in the economy, consumer spending and credit crisis are falling gas prices.

Now, I know this may be insignificant compared to the anxiety of job security, real estate decline, and inflation. However, we may for the first time so a drop in all consumer products as demand drys up for all goods, food, energy, consumer staples even small luxury items like Christmas gift.

We have not seen this before in our lifetime (most of us) . However, I predict and it is likely that food, consumer staples and even luxury items drop 10-20% in the next several months and beyond.

Wal-Mart, Costco, Home Depot, Coca Cola (to name a few) and retailers and service providers are going to have to lower prices so that they can sell goods and services.

In our lifetime, we have only seen inflation.  Pepsi goes up, automobile prices, bottled water, gas, bread, bank fees, movie tickets all continue to go up. Now, we are in a recession. Some say headed towards a depression (though, I disagree).

Are companies going to lower prices, shrink profit margins, even take losses so that in tumultuous times consumers can more easily pay for basic necessities and enjoy a higher quality of life.

I believe so. Yes, auto manufactures are already offering discounts. Gas prices have dropped and interest rates are down. Expect it to continue.

If there is a silver lining to the storm clouds of Phoenix AZ real estate is that home prices are down, interest rates are down, energy prices are down and food and consumer staples are headed in that direction.

If you are homeowner, be patient, Scottsdale real estate will stabilize. If you are a new home buyer, and can truly afford a home, have a down payment and job security take advantage of opportunities that  come only once or twice in a lifetime.

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Copyright © James Wexler *Scottsdale AZ Real Estate and Oil continue to Drop – are food prices and consumer goods next? *

If you are considering life in Phoenix AZ or living in Scottsdale AZ  hire a real estate broker who knows the area and has the experience to get the job done.

Call james wexler today at 480.221.8080 to find out more about Phoenix AZ real estate and life in Scottsdale