I know it's been asked an infinite amount of times but is now the time to buy in Phoenix metro area or should I wait?

Asked by Johanna, Arizona Sat Apr 17, 2010

My significant other wants to buy me a house so I'm looking for a home to live in for a long time duration rather than just as an investment. It would be nice to rent it out while I'm gone and have it go up in value in the long run, too, but it is really a home for me. Should I wait to see if prices bottom out more? Should I wait for the summer when it gets hotter and the snowbirds flock home so I don't have to compete with them?

I'd like to do something soon before my significant other drops dead. Not to sound cold but he's much older. I guess what I'm trying to ask is, do I keep stressing out looking at properties now and will there be less competition in the summer so I'm not choosing properties that seem to spar bidding wars? Thanks!

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4
North Scotts…, Agent, Scottsdale, AZ
Tue Apr 20, 2010
In my opinion now is the Perfect time to buy. I have watched prices start to increase again in areas of Phoenix, especially in the Scottsdale area. It is getting more and more difficult to find foreclosures so if buyers don't act fast these opportunities will be gone.

As far as waiting for the "snowbirds" to leave, I don't think that will matter with this competitive market. The latest trend I have seen with my clients is purchasing homes "sight unseen". I have found that more and more buyers are purchasing homes that they view from videos and photos because they do not want to miss out on the great prices.

If you would like to view available homes in the Scottsdale area feel free to visit my website: http://www.DesertMountainHomesOnline.com.
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Kent Gagon, Agent, Chandler, AZ
Sat Apr 17, 2010
Johanna
If you look at market trending and statistics the summer heat in Arizona does not slow down the market here. Our market alway cycles higher with more closed sales in the summer months than it does on the colder and nicer months...why? Well typically this is the time that people move out of here either for job relocation or graduation from college etc. Now with that written, the summer months are also the best months for the most inventory generally speaking again for the same reason, if people are going to move out of the area, especially if they have kids in school they want to move them during the summer months so they can have them back in school in the new location by August. So that should handle that question, summer months are always the highest months for sales then they taper off after August down slowly through January and then start working thier way up again. This has been the case for as long as I have been selling real estate which is about 12 years.

As for your other quetion of bottoming out...well a lot of people try to time everything in life and lose out in the end. If you look at statistics and pricing most of the areas in the Phoenix Metro area and surrounding cities are back to 2003 and 2004 pricing prior to the big 48% gain in values which means hopefully values will stabilize in the coming months. Most of the cities have seen a stabilizing of home values overall especially those cities that are inner cities, you may see more significant falls still in the outter lying areas but again you may not. The real estate market like anything is cyclical and it has its ups and downs.

As for bidding wars, this will depend highly on the areas of town and the price ranges that you are looking in for your home. Anything in great condition under about 200,000 right now is selling and selling quickly.

If you would like more detailed information contact me directly and I will be happy to help you out.
Best of luck in your search
0 votes
Dan Chase, Home Buyer, Texas City, TX
Sat Apr 17, 2010
Make sure if and when you do buy that you put an appraisal and inspection contingency in your contract. That will protect you if the house got bid to high for its value and give you the choice to walk away if the house has serious problems and the owner will not fix them.
0 votes
Dan Chase, Home Buyer, Texas City, TX
Sat Apr 17, 2010
For your last question ask realtors in your area how the ending of the first time buyer credit is affecting traffic. In some areas people are desperately trying to buy before the free money goes away. In other areas very few people are even looking to buy a house. I have no way of knowing what is going on near you.

If you are looking long term there are things to consider. Can you now buy for less or the same amount as rent? If yes and you plan on owning it forever maybe now is a good time to buy. There is one wrinkle that will change prices even more. You are aware of how foreclosures have dropped prices. Are you as aware that going from 5% to 7% mortgage rates will take away 23.9% of buying power? As buying power goes away prices will have to drop unless wages increase dramatically. With about 10% unemployment I do not see that as likely.

When buying a house make sure you buy it at a discount below what is considered fair market value today. That way when prices drop more you will have some protection. I would say at least 10%, but perhaps more is a safer bet.

Below are some blogs to look at. Just consider what is shown there and decide for yourself what to do. They give different reasons prices could drop more in the next 2 years or so.

Does it make more economic sense to rent or to buy? Look at your numbers and see how to find out below.
http://www.trulia.com/blog/dan_chase/2010/01/does_it_make_mo…
Why paying more for rent might might more sense than buying under certain conditions
http://www.trulia.com/blog/dan_chase/2010/02/why_rent_if_you…
10 valid reasons to wait to buy a house
http://www.trulia.com/blog/dan_chase/2010/01/10_valid_reason…
do low interest rates really make it a good time to buy a house?
http://www.trulia.com/blog/dan_chase/2010/01/do_low_interest…
qhat will (or could) happen when the free $8,000 goes away.
http://www.trulia.com/blog/dan_chase/2010/01/what_will_or_co…

Look at the site below.
http://www.housingpredictor.com/arizona.html
In Phoenix home sales have seen a healthy improvement, but prices have fallen at an unprecedented rate, nearly half from the market's peak. The pro-longed downturn has sustained for more than two and a half years, but should begin to see improvement in the latter half of the year. Government tax incentives and further enhancements in government backed lending are projected to aid in the markets recovery.
Broad investor buying
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accounting for nearly a third of all sales has acted to strengthen the Phoenix market. But more active purchasing has not yet developed in the higher price
ranges, and will have to before a full-fledged recovery develops. Housing Predictor forecasts Phoenix housing prices will average deflation of 11.3% in 2010.

p.s. I would not go into a bidding war. That only causes people to overpay.
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