From one of the answer below:
"Oh, and remember the "bubble" they talked about in 2005.. what happened to that?" Answer to that...it burst.
Right now our market is slower than it was, prices are lower, but the time to buy is NOW. Selection is huge and we are very near the "bottom".
Oh, and remember the "bubble" they talked about in 2005.. what happened to that?
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Therefore the MAJORITY of homes are not "outskirts" but Phoenix proper which is Huge, ALL of its neighboring cities which are also huge. Exclusive Paradise Valley is VERY SMALL! And Scottsdale is is limited being landlocked which will help it in demand. However, Scottsdale property has also fallen back to prices in 1995-2000. I know because I bought a 1500 sq ft home in North Scottsdale (North being the newer pricier area) in 1999 for $154000.
Today that same house is listed at $164000, listed but not yet sold. So let's not slant facts around to deceive people of the really sad housing hurt in Arizona. Try Prescott, the beautiful perfect weather city. Their forclosure rate & price devaluations are so sick people are leaving in flocks from no jobs & home losses. I moved to Texas in January 2011 and home prices have dropped here somewhat also but not nearly like Arizona. Arizona has no industry - it lived strickly on tourism & building new homes at the "boom". Now that's all over so it's a housing graveyard. Speak honestly, mr. sean!
The further you go from the center of Phoenix, the more home you can get for your money...but if you don't like a commute, then you're not going to find value in that type of home.
I could see your reasons if the loses were in the range of maybe 10-50k maybe even 100k in a prime prime situation but you are talking about people being buried by a few hundred grand...with no upside in the near future...in the history of real estate you have never seen this type of appreciation and probably won't see it in again in my or your lifetime...do the math...historically prices on real estate have appreciated around 3 to 4 percent per year on average...it would take 15 to 20 years to recoup a few hundred grand loss like that....why would anyone in their right mind get sealed in like that...it's like digging your own grave and sealing the coffin to buy now...the reasons you listed really are trivial in the grand scheme of things and I couldn't imagine anyone with sane mind or minus millions and millions of dollars in the bank sacrificing their financial safety like that...
And contrary to popular belief...yes the bottom can be called...there's too much data out there now for anyone not to be able to read the writing on the wall...
Well, just today, the local association put out their most recent numbers for the metro Phoenix MLS
Median price dropped 2.9% in one month, average dropped 1.8%; thes are some of the fastest drops ever. Foreclosures broke another record in June, as did filings for future foreclosures. I am getting credit tightening update notices across the board: higher MPI for FHA, tighter guidelines for MI, restrictive guidelines for second homes, etc. Also, down payment assistance is on possible death watch. Taken together, these changes could move between 5 and 10 percent of current buyers out of the market, and that much drop in demand will lead to even lower prices.
Same thing if rates go up, prices will simply continue to drop even more.
Maybe we won't know the bottom till after it has passed, but one thing is crystal clear: it isn't here yet!!!
Prices will continue dropping all the way into next the beginning of next year.
1. prices are dropping at about 2% a month right now. Buying now versus waiting is stupid.
2. Banks are now setting the prices. we had 5500 or so sales in June! Yeah it went up! but 2500 were foreclosed or short sale homes, in June of 07, only 200 were foreclosed or short sale homes.
3. Foreclosures keep increasing. June 08 saw 3750 foreclosures, 6940 notice of trustee sales. Lets recap 6940 people fell 90 days late on their mortgage, and entered foreclosure, only 5500 sold, for what i usually one of the busiest sales months of the year! More foreclosures than sales is terrible for Phoenix going forward.
4. Job loss. The state is actually losing jobs for the first time in some 20 years.
5. State budget,projected 2 billion short fall for next year
6. HUGE overbuilding in commercial and condos going on right now. Will result in commercial real estate crash next year.
Read my blog, in addition to being a Realtor, I am a professor of mathematics and business math, so I study these issues quite carefully. Others just seem to brainlessly cheer, do not be misled.
I too agree that it is not "always a good time to buy for everyone" but for a lot of people it is. (about 6000 a month currently) I mostly deal in REO properties and they are priced right and selling quickly. But you are correct. there are 1.5 million+ people NOT buying in phoenix right now.
As far as numbers.... The best indicator of a turn in the market in the coming future is more properties going off the market than coming on. We are starting to trend that way. Not there yet, but headed that way a little more each week.
Our Listings on the market not selling has dropped to 45,689 as of the 1st of this week, Under contract homes has risen to 7,196 and Closing in 30 days is at 5,584. Total inventory on 6/23/08 was 52,885 (down from over 60,000 in the begining of the year.)
These are indicators, but you can believe the media if you want. I am not the smartest guy in the world. But not the dumbest either. I do realize that the positive attitude of Realtors is necessary to combat the negativeness of Media and other people in society who do not have their fingers on the pulse of the market. Mine are only on the East Valley markets that I know and have worked for the last 20 years, so dont ask about home values in Scottsdale, Peoria, or elsewhere, I could not tell you. I can tell you that in my office business has picked up drastically in the last 2.5 months. Buyers are buying, deals are being made and invenory that is priced right is moving.
Shaq on the other hand has plenty of time. Properties over 1 million have a 40.5 month supply! Queen Creek (one of the harder hit markets) has 1626 homes on the market and 490 pending, while there have been 659 close since May 1, they are down to 4.8 months supply. Homes are affordable again out there.
Basically it is up to the buyers to determine if now is their time to buy. They could wait and if the election goes horribly wrong, the country could go farther in the tank.. One never knows.
OK I am tired of typing.
Have a great weekend.
Fair enough but then you say that there are countless factors in determining a good time to buy but you don't offer up any examples...as far as your blanket statement comment I'll go out on a limb and say you are a rarity...
Here's something in Phoenix's recent current events that even indicates that things are not going well as far as Real Estate is concerned in the region and it's the recent lease option buy Shaq...here's a guy who has bought a home every where he has played, he even dabbled in flippin foreclosures in Jersey so he has a little knowledge of real estate...but by his recent antics in a club in New York he has shown that he is not the brightest tool on the shelf...he has a history of pushing himself out of areas for various reason yet he still chooses to buy homes...he owns 2 in Florida and that market is beyond toast....but even he passed on buying in the Phoenix market...here's a guy who could afford to lose millions and not realistically miss it and even he chose to pass...so what does that say about the regular joe if a guy who could lose millions passes on a buy what is a regular joe doing buying a house in that market if he doesn't plan to die in it...
As I told the Prudential Agent in Scottsdale a few months back who was trying to sell me a 2 million dollar house next to a Phoenix Cardinal rehab project...the market is toast it's not coming back anytime soon...I'll look at it again when it's priced around 500k a year from now...she told me it would rebound by summer well it's summer and it's only getting worse...
I would be careful with China as well they are heavily invested in U.S. CDO's and MBS cerificates the debacle on Wall Street is going to have repercussions there as well...if I were to invest in anything right now trying to get in on the bottom it would be alternative energy and bio-fuels...
Sorry if I am not one for perfect grammer, but if I help one person out there... And if you are scared of buying a house... Buy 2!
The truth is out there!-Chad Gunderson Tacoma, WA
If you think the prices in Phoenix are only going to drop 5% in the next 12 or 18 months you are fooling yourself...and probably don't have any skin in the game in regards to the market, otherwise you wouldn't be so careless with your hard earned money and if you do you are probably trying to dump it on some unsuspecting buyer quoting that same dribble...it's ok I understand you have to believe in what you are selling...but it would probably help your cause if you had some relevant data to back up the dribble...
I know quite a few investors in Phoenix as well who harvested quite a bit of property during the RTC debacle...and none of them made any significant money until the Trade Center was bombed and they dropped the bottom out of the interest rates...all of them wanted out of the Phoenix market in the worse way and couldn't give the property away...I doubt if you were any different and being that it will be another 40 years if history is any indicator before you see that again...I doubt if anyone will see that same type of turnaround in 7 years which is what that roughly equates too...lightening very rarely strikes twice...
Oh, By the way, dont let the picture fool you. At this same time in the "RTC Debacle" I was saying the same thing. BUY BUY BUY.. I did and the results were great.
Or people could wait, then pick up the scraps when the market turns in the next 12-18 months, having missed that "house they want to die in" because they were afraid the value may go down another 5%.
Basically, having been here and knowing the area (no speculation from me about LA) buyers looking for themselves (not speculators from CA coming back and helping us ruin things further, bet you didnt know that is where a lot of people here put the blame) cannot afford to wait until "bottom", if they do they will have missed the best homes.
OK thats my worthless two bits. But of course I dont know as much as those folks on TV who randomly pick which MEDIAN price to quote.
If you want data and to see where the market is going try looking at the Case-Schiller indices
It shows that the Phoenix market as a whole has been in steady decline for months, combine that with removing the fraud component influenced by the current activities of the F.B.I. recent and a return to reality and skin in the game based financing nevermind the Fed threatening to raise interest rates which they will probably do after the elections...where do you think the market will go...it won't be going up anytime soon that's for sure...if anything Realtors should be telling there clients if you don't plan on dying in it don't buy it...because even though that 399k price on that forclosure that sold for 950k a year ago ( Yes, I've seen it and it's in Scottsdale) looks good now next year you'll probaly be able to buy it for 200k or less next year...
Realtor's in Phoenix seem to have a short memory or the ones posting here haven't been in the business that long... this is not the first time Phoenix real estate has turned into a blood bath the last time was during the RTC debacle about 10-15 years ago...this time it's going to be a lot worse with the backlash coming from Wall Street...if you own anything in Phoenix get out while you can...it's going to be awhile before you see anything close to resembling the prices of today nevermind a year or two ago...
Put down the pom-pom's game is over...the media in my mind is not even close to reporting the severity of the situation because historically they are a lagging indicator...it's far worse then what they are telling you...
To sum up ALL of these great answer below:
1) Real Estate is local - very local. What is happening in one specific neighborhood can be determined by a professional REALTOR who works in the area on a regular basis and has full access to all the data.
2) What goes up, comes down and the universal truth "Everything evens out". I sold my home "too early" right before the upswing in prices in 2004. If I had waiting 16 months I could have made an extra $100,000 to $125,000. But I bought my NEW HOME in early 2004 for $100,000 to $200,000 lower than the peak of the market. EVERYTHING EVENED OUT.
3) ATTENTION BUYERS - BUY NOW! The Market Is Low! Example: I know of a neighborhood where NEW HOMES were selling for $120,000 TO $140,000 new back in 2001, 2002. Now they bank has foreclosed on the homes and they are selling for $105,000. EVERYTHING IN LIFE EVENS OUT. These homes are LESS THAN THEY WERE NEW. Which means they are most likely going to go up in price and go up ABOVE what they sold for new.
Very wealthy people know WHEN TO BUY (Now when the market is low) and WHEN TO SELL.
Ignore the media for the most part and use universal laws. If it is right for you BUY NOW while the MARKET IS DOWN.
For a FREE list of "Bank Owned Bargains" in the price range and area you desire: http://www.623BankOwned.com
now is the time....buy buy buy ! Dont be caught saying shouda woulda and I coulda............
So let the media keep churning out the numbers just keep in mind this thought ..... Realestate is cyclical. Just as the prices went up exponetialy the prices have gone down .. GREAT DEALS TO BE HAD !!!! ... NOW IS THE TIME!!! Timing Timing Timing !!