Nforeman257, Renter in Scottsdale, AZ

Do you expect the housing prices to drop more?

Asked by Nforeman257, Scottsdale, AZ Tue May 8, 2012

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I believe the under 100k homes have hit a "hard bottom", meaning an investor can still get a great return at the prices homes are trading at and should stabilize this price point. As the banks have been caught in the robo-signing scandal they have been slow to notify home owners that they intend to foreclose which has created a very low supply of inventory. As you know from supply and demand when inventory is low, buyers will compete for limited supply and prices will increase.

That being said, the lenders now have in place the proper mechanism to properly notify homeowners in default that they are going to foreclose. When a homeowner receives this notice of default they have 90 days to come current with all past due payments and penalties. Many homeowners will delay the foreclosure by looking into modification options, thus pushing the eventual foreclosure or short sale listing out further than the original 90 days. As more homeowners feel the pressure to sell or let the home go to foreclosure inventory will tick back up giving buyers more options. I think Q3 will bring a slight dip in property values before we see some stabilization in 2013 and look for slow, healthy appreciation in 2014.

Of course, you must take into account that mortgage rates are so ridiculously low that its hard to imagine that both pricing and rates will be this low at the same period of time, which still makes it a great time to buy.

As I tell all of my clients, there is a lot of terrible houses right now selling for more than they should and let other buyers snap those up. When you do find the house you really love jump in with both feet and get that home so you can take advantage of these historically low rates and home prices.

Hope this helps
2 votes Thank Flag Link Tue May 8, 2012
You need to step back and analyze the specific market you are looking at to get a correct answer. Then apply basic economics to see what direction the prices will be doing.

For example, is inventory increasing or decreasing?

What is the average days on market before a home sells (and is that trend increasing or decreasing)?

My favorite is figuring out the "absorption rate"! Take the number of active listings and divide the number of sales in the past month to figure out how many months of inventory there is. Is that number increasing or decreasing?

If there is an excess supply, prices will drop. Conversely, if demand exceeds supply prices will firm up and increase!

Real estate typically goes in 5-7 year cycles so this cycle of dropping prices should for the most part be over.

Hope that helps!
Jim
1 vote Thank Flag Link Sun May 13, 2012
I am sure that the Real Estate Market is not right for you;

I would urge you to abstain for another year or two, at least.
1 vote Thank Flag Link Sat May 12, 2012
Here in Chino Hills, CA prices dropped about 10% a couple of years ago, and only about 4.5% last year and the prices now seem to ve at least leveling out. Almost all of the reports I've read in the past month show prices stabilizing this year and possible even increasing slightly. Also, inventories seem to be down which would lead to higher prices; i.e. "supply and demand".
Web Reference: http://www.larryhodel.com
0 votes Thank Flag Link Mon May 14, 2012
I feel the market is stabilized due to the decrease in mortgage interest rates.
0 votes Thank Flag Link Mon May 14, 2012
Hi Nforeman257, Housing prices in California are starting to stabilize in some areas where there is strong demand. Are you planning to buy in AZ or CA?
0 votes Thank Flag Link Mon May 14, 2012
In our area the lower priced homes are already seeing increases. This can vary by state, city and even subdivision. Check in with a trusted local professional and request a free market value analysis and opinion.
0 votes Thank Flag Link Mon May 14, 2012
There was a very interesting blog just recently published on Trulia about this topic. Scanning through the other answers, I don't think anyone has mentioned it yet, so I'll go ahead and point it out:

http://pro.truliablog.com/industry-2/rising-home-prices-comi…

As it mentions, you shouldn't necessarily expect much in the way of price drops overall. If anything, the market is certainly lending itself to showing prices increasing. Rents are also increasing (see here: http://richardschulman.com/2012/05/10/news-for-investors-ren…), yet interest rates are still low for the time being - making this an interesting time to buy!

Richard Schulman
Keller Williams Realty
0 votes Thank Flag Link Mon May 14, 2012
You mean, do I have a crystal ball?? Markets are so sensitive right now anything can trigger a boom or bust. Right now we are having a very low, low inventory and multiple offers on everything here in coastal San Diego county. Will it last??....who knows!
0 votes Thank Flag Link Mon May 14, 2012
As an agent, I expect prices to rise slowly. As the economy improves, the inventory will change with more confident sellers moving on with their lives. The financing options will change, slightly rising interest rates. Buyers in good shape now will increase in number. Already move-in condition homes are receiving multiple offers. But for Arizona, where you are, local conditions prevail. If you don't really need a house, (which is implied in your question), but you want a house and can buy a house, you are missing the one element necessary to take action. Until you need it, you will not take action. You will try to time the exact bottom of the market locally and wait forever and never know if you were correct until it is too late.
0 votes Thank Flag Link Sun May 13, 2012
Answering this is like asking if a stock has hit its max value.....market fluctuations, economical influences, etc play into this. And location is a big factor in terms of unemployment and economical trends. Speaking of my local area, we have areas that are trending upwards and we have aeconomically distressed reas that are saturated with sales and still trending down in value. Overall I think my market area is favorable, but in answer to your question, we are seeing both ends of the spectrum.
0 votes Thank Flag Link Sat May 12, 2012
I find that the National News does a broad stroke on market conditions. My experience in the Wickenburg, Arizona area is the market is stable with inventory down and the banks are taking multible offers. I'm seeing more owner homes being sold and price per square foot going up. What is really exciting is the building contractors are now taking advantage of the price point in residential lots with the forcast of the new buyers market and low inventory.....makes for the perfect storm. There are still some great buys out there.........you'll just have to pay a little more.
0 votes Thank Flag Link Sat May 12, 2012
Depends on what area; my local market (Rancho Cucamonga, CA) has hit bottom and is already on the way back up. Inventory is everything lately--simple supply and demand is driving prices up here because we have too many buyers and not nearly enough homes that are move-in ready.
0 votes Thank Flag Link Thu May 10, 2012
Your in the wrong town. There is no question that in Rochester, NY the houses are selling and increasing in Value. Come and join us. This town gives you the best house for the money, wonderful schools, The great Lake Ontaio and the Finger lakes (all fresh water). The great Genesee River flowing through it much less the old Erie Canal ... Can't beat that for beauty!
0 votes Thank Flag Link Thu May 10, 2012
Well it really depends in what area of a state you are living and even it which part of that state....
But as a general info, the prices in some area will level out and in other they will still go down somewhat especially if and when more foreclosures and short sales hit the market. And then there are a few markets where the prices are going very slightly up, after they have been going down in a big way.
EdithSellsHomes@gmail.com
YourChicago and Northern Illinois - NorthShore Specialist
http://www.tinyurl.com/MeetEdithHere
0 votes Thank Flag Link Thu May 10, 2012
In short: NO. All statistics now have about 2-3 mos. of proof that says after such a long period of "down" , it is now time to start going "up". So, hook up with your favorite realtor, and start lookin" !!

And, good luck. Now is the best time to purchase a home I have seen in many, many years.

Phil Griffith
Associate Broker
Russ Lyon Sothebys
602-330-7860
0 votes Thank Flag Link Tue May 8, 2012
Very difficult question to answer. I can't quite image them going much lower, if at all, but these past few years have shocked me. I hven't lived through times like these, so I don't want to speculate into the future. Your guess is as good as mine,
0 votes Thank Flag Link Tue May 8, 2012
I think your asking the wrong question.

MOST buyers are looking to buy a monthly payment.

If rates go from 4% to 5% then the price a house just went up by 25%

That would me the price of a home would have to fall 25% (NOT likely) just to stay even

Rates WILL NOT stay low forever, they will eventually go back up.

Hope this helps.

Terry S. Smith
Arizona Resident for 46 Years
Grew up in Scottsdale, AZ
DPR Realty LLC
8341 E. Gelding Drive
Scottsdale, AZ 85260
(602) 763-1858
ScottsdaleForeclosures@Gmail.com
http://www.ScottsdaleLenderForeclosure.com
0 votes Thank Flag Link Tue May 8, 2012
The market is now a sellers market which means they have many buyer offers to choose from and their asking prices are met or exceeded, depending on price point. Every client I have under $450k is seeing the demand and bidding wars. When I list for my sellers we can look at comps and price above recent sales in most cases depending on condition/location and command a better price.

My clients in the higher price points are finding homes that they can bid on without multiple offers yet some sellers are not priced correctly so coming to terms is a longer discussion that sometimes works and sometimes the buyers move on.

The housing inventory is about half of what we need to see to be balanced. Beginning of 2011 we had about 55k units to shop from sustaining the buyers market we've been in. While sales met some record numbers during these months our increase in inventory did not and we are now under 15k units to shop from where a balance is about 33k.

Prices could have some variables on a global scale that could effect a drop in latter part of the year yet it is all prediction vs ability to give fact on this.

If we had too much inventory again, a global dissonance, jobless rate increase this could shift demand and supply and put a strain on values again. However, what I see is that prices are increasing in certain price points which returns to 2004 levels where we were affordable but caution to all not to be part of 2005/6 increases. There is a balance.

One quick example is a home at $185k list gets bid to $218k which is an immediate 15% appreciation if the appraiser values it there BUT guess what...it's a cash offer so no appraisal will be done. Once closed = new comparable and that just has to happen a couple times and the neighborhood just got their face lift. Appraisers do need to reflect on this and adjust so we see a healthy improvement not a repeat of the past.

Cheers
Laura Myers
AZ Real Estate Consultants
Keller Williams Arizona Realty
480-600-6213
0 votes Thank Flag Link Tue May 8, 2012
Not likely. The Valley has had the prices increasing for a while. Multiple offers have been driving up the prices along with low inventory. Values are up from a year ago, with one report showing increases as much as 20% higher in some areas. More and more banks are working with sellers on short sales and re-financing to help the home owner so many are speculating we won't get the large amount of foreclosures as was previously expected.

If you need assistance with buying or selling in the Phoenix Metro area, please do not hesitate to contact us. You can also search the official live MLS just like we do through a link on our website at http://www.CunninghamHomesAZ.com

Best Regards,

Brenda

Ron and Brenda Cunningham
West USA Realty
602-980-3133
Ron: 602-499-0694
http://www.CunninghamHomesAZ.com

* Recognized in the Phoenix Business Journal as "One of the Top 50 Realtors in the Valley" *
0 votes Thank Flag Link Tue May 8, 2012
As the others have said, we are seeing prices rise in Scottsdale as well as the rest of the valley because of the low inventory and the need for homes. Right now we don't see prices going down as the bottom has seen to hit. Even the luxury market has picked up and most of the deals are cash. Personally I wish more inventory would come on the market so we can satisfy buyers that are having a hard time getting an offer accepted.
Best regards,
Lorrie Feld
Keller Williams Integrity First
480-570-1074
0 votes Thank Flag Link Tue May 8, 2012
NO, but I don't have my crystal ball on.
0 votes Thank Flag Link Tue May 8, 2012
The answer may depend on what you are wanting to buy? What price range etc?

No one answer is correct without knowing what bracket you are actually interested in.

We are in housing, what price range?

Scottsdale or some other area?
0 votes Thank Flag Link Tue May 8, 2012
As the foreclosure rates drop, and banks work with homeowners for alternatives to short sale and foreclosure- we have seen fewer homes on the market. AS inventory drops, demand climbs. Homes are selling now with multiple offers and in some cases over the list price. While no one has a crystal ball- if things continue on the current path, we will see home prices stabilize and see overall appreciation. I think it is safe to say that our housing market is recovering!
0 votes Thank Flag Link Tue May 8, 2012
Good morning,

Due to low inventory the prices are starting to go up and buyers are "bidding" on homes. A house for sale that is in good condition we are now getting 10 offers + at above listed price in increments of $10,000 within 24 hours. That is the market today in "certain" area of the Valley.

Please email or call me for more details.

Carmelle Bernier
602-321-4533
West USA Realty
carmelle@carmelleazhomes.com
0 votes Thank Flag Link Tue May 8, 2012
Hello N Foreman,

I work the Scottsdale area and in both the Rental market and Sales market the prices are going up as well as having multiple offers submitted in both aspects. If you would like more information on trying to get the upper hand on a prospective property please contact me.

Have a GREAT day!

Vivien L Biggs PLC
602-615-9137
Prudential Arizona Properties

Check MLS for homes on my website
http://www.realestatecore.com/
0 votes Thank Flag Link Tue May 8, 2012
Hello Nforeman:

All indications are we bottomed out late last year. The over-all Phoenix market has experienced slightly increasing prices for the past 5 months. One analyst predicts The Valley will see 6.5% increase over the next year, with some neighborhoods already experiencing that. As indicated, many of my clients have been out looking for some time now and are experiencing bidding wars and accepted prices above list price.

So, nobody knows for sure, but things have changed dramatically in the very recent past. This is the Valley of the Sun, after all, and it is hard to keep people away for long. I am sure not surprised we are one of the areas rebounding the quickest from the housing bubble which burst some 5 years ago.
0 votes Thank Flag Link Tue May 8, 2012
The prices may start dropping if the inventory goes drastically up. For now, we have a Seller's market in the Phoenix metro area, including Scottsdale. Demand is high, available homes for sale are three times less than 3 years ago, plus interests rates are as phenomenal as they can be, if you are a Buyer.
Please email me if you'd like to receive daily or weekly market insights for a particular section of the Phoenix market.

Steffy Hristova, MBA, SFR, Realtor®
HomeSmart
Tel: (480) 966-9353 Fax: (602) 507-3703
3131 E. Camelback Rd. #125
Phoenix AZ 85016

http://www.talktosteffy.com
Web Reference: http://www.talktosteffy.com
0 votes Thank Flag Link Tue May 8, 2012
HERE IN MARICOPA COUNTY SUPPLY IS VERY LIMITED. I MUST HAVE A DOZEN BUYERS THAT HAVE BEEN LOOKING FOR MONTHS AND ARE HAVING A HARD TIME GETTING THEIR OFFERS ACCEPTED. MY PERSONAL HOME HAS GONE UP 11% IN THE PAST 3 MONTHS.

JASON COLEMAN
602-451-5472
MORTGAGE LENDER
0 votes Thank Flag Link Tue May 8, 2012
You should see housing price start to rise, in some areas and price ranges we are finding buyers bidding home above list.
0 votes Thank Flag Link Tue May 8, 2012
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