There is always an end in sight which is proven by historical patterns. The market will always recover after a downturn, and it will always experience its lows. I'm sure your brother and nephew did not have a crystal ball, but they had common sense, and common sense says not to be greedy on neither the ups, nor the downs. Regardless of whether or not the "economic downturn" is "over" or not, real estate in Phoenix is on sale, and when you can buy a property for which the monthly payment is less than or equal to rent in the same area, then it's time to buy.
As I have stated over and over... The housing market will improve when employment figures move in a positive direction.
Until then, I will continue to sell homes 250k or less to retiree's, 2nd home buyers and first time home owners from across the US as I have for the last 2 years now since this turn.
The issue that is key for any home purchase or sale right now is "where" the home is located and James is very accurate in stating that you must look at the housing market by it's "zip code" but taking it even further than that, you need to look by each neighborhood for desirability and location based on the criteria I have outlined above.
The "next wave" that everyone has been talking about are people who own luxury homes near 1 mil and up who simply aren't able to hang on to the home and have been using their savings to help make the payment. They have had their income cut in half or next to nothing or have lost their jobs.
The rental market is of coursed based on employment and as long as the job market suffers it will be negatively impacted.
The other issue is lending and not residential lending that many complain of. I have a close friend who is a resort developer that was mid stream in a multimillion dollar project when the bank cut off funding for the project. That effected not only his personal finance, but all of the companies and their employees left out to dry.
We may not see stability for quite some time, but we are seeing signs of recovery as small as they are.
It's like watching grass grow. Painfully slow...
Signature Realty Group
2008-2009 Master of Real Estate Award
There is no end in sight to the Economic Downturn.
My brother and his son did some serious real estate investing in Scottsdale / Mesa / Chandler
during the real estate boom. They knew when to get out.
Others have not fared so well... just like so many in my state of Florida.
Know when to hold 'em, know when to fold 'em...