Is this a good time to buy in the Phoenix area right now, or will home prices (new builds and resales)?

Asked by d517, 85388 Mon May 26, 2008

even go lower? I dont know whether to buy this year or to wait.

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19
Newportfiji, , Long Beach, CA
Wed Jun 18, 2008
Don't waste your time asking Realtors about price trends, investing in real estate or if it is a good time to buy. It was Realtors who were spouting off two years ago that "it was a great time to buy" and "prices never go down." We all know how foolish that advice was. According to Realtors, every day during the past 100 years was a great time to buy OR sell real estate -- and remarkably the same will hold true for the next 100 years.

Realtors may be knowledgeable on current and past prices for their area, but they are NOT experts on future price trends. Realtors are NOT economists and very few have any business or economic training to speak of. They are SALESPEOPLE. The reality is that they only get a commission if you buy, so they have an incentive to be less then accurate as to their assessments. The few competent Realtors with integrity would admit that prices are going down and most buyers could save money by simply waiting for the bubble to further deflate.

Best of Luck,
NewportFiji
2 votes
Jamie Geiger, , Mesa, AZ
Mon May 26, 2008
d517
It is hard to say if prices will continue to drop and if they do how much may depend on where you are looking. The out lying areas may continue to see price declines based on the number of REO properties, but they are being snapped up rather quickly.

The time to buy depends on what your goals are as a home buyer. Are you planning to live in the house for 5-10 years, if so, any further decline in price, most likely will be regained in the coming years.

If it is a short term investment- this may not be the time for you to buy.

If you are currently renting- would a decrease in the value of a home you purchased match what you are giving away in rent?

Interest rates are low- again will the rise or fall- I don't think there are any guarantees.

So it may be a great time to buy or it may not- really depends on what your goals are.
2 votes
Alan Jones, , Phoenix, AZ
Thu Jun 26, 2008
The link below is to an "amazing and insightful" article to help you with absoluteness of fact and decide for yourself. I believe you will agree it can provide "clarity". It's "Phoenix Economic Outlook - The GOOD the BAD, and the UGLY"

http://knowledge.wpcarey.asu.edu/article.cfm?articleid=1605
Web Reference:  http://jcaj.thelendingco.com
1 vote
Alan Jones, , Phoenix, AZ
Thu Jun 26, 2008
As "Jamie" said in the original response..."It's not only about prices, it's about financing as well."

How right he is! I don't have a crystal ball...but I do have horsepower and resources to finance the lovely new home you may choose!

We are a mortgage banker and broker, quickly closing loans due to our Unsupervised Direct Endorsement "FULL EAGLE" FHA liscensing status (only 5% FHA lenders are), home office in Scottsdale, AZ with average FHA underwritting in less than 48 hrs! We are offering our "Outer Limits" program...a "NO FICO SCORE" driven program that provides up to 102% financing on a home, NO MI, and even allows for "gifting" of the downpayment from family, employer, etc!!! (we're one of seven lenders in Maricopa County approved, at that time,to offer it) My bio, contact info is on my website http://jcaj.thelendingco.com Call for more info...
Web Reference:  http://jcaj.thelendingco.com
1 vote
Steve Belt, , Scottsdale, AZ
Tue May 27, 2008
If you plan to build with a custom builder, then I don't predict the total price will be significantly different a year from now. Custom builder costs have actually gone up, as general prices have come down over the last 2 years. The resale market is stocked full of homes that couldn't be built again for the prices that are being offered.

Land prices are coming down, in most areas. Your description of a west side with Mountain Views location sounds like Vistancia to me. That's a master planned community that has custom homesites available, although there are plenty of choices on the west side which don't fall within a master planned community. Your lifestyle would better dictate that direction.

Given the scenario you describe, I honestly don't think it will matter significantly if you decide to build/buy today or next year. My not-so-crystal ball tells me that across the Phoenix area, prices are generally still moving downward. Since you aren't financing, the move up of interest rates which is likely after the election means you could save on the land a bit by waiting, but given you think you will build custom, I think your construction costs will probably increase, as increasing gas prices force construction material prices higher.

Then again, I could be wrong on every single point, but that would be my best guess today. To be honest, I would be comfortable being a buyer right now, so long as I had a 5 year time horizon or longer and knew I was getting a deal (at least 5% below the last sale). And this is the first time I've felt that way since August of 2007.
1 vote
Sherry White, Home Seller, 85032
Fri Jan 9, 2009
AS a long time Phoenix resident (38 yrs) and a current HOME SELLER, I can attest that prices are VERY reasonable right now, but consider the AREA first and foremost!!! Do you want to steal a huge house in TOlleson for half of what it was 3 yrs ago and be surrounded by foreclosures, rentals and riff raff?? When
Realtors tell you, it s LOCATION, etcetc, they are absolutely correct!!! I would rather stay in my area of town than save thousands on a DEPRESSED area!!! Go to the City of Phoenix web site and check out the foreclosure map to see where the hardest hit areas are, you'll find my zip code (85032) VERY stable and a great location as well. HOPE THIS HELPS!!
0 votes
Tempedude, , Tempe, AZ
Fri Dec 19, 2008
wow! look how all the agents said "now is the time to buy!"

I wonder how that has worked out here in Phoenix? Down 20% OOOPS not so well!!!

"but buy before rates go up!"- OOOPS rates went down... so by ignoring all the realtors, you get a home 20% cheaper, and a lower interest rate!
thanks for the great advice guys! keep up the good work!!!!
0 votes
Artur Ciesie…, , Phoenix, AZ
Wed Jun 18, 2008
A REALTOR may be a good source for answers, but not all of them. They are not economist but some, not all, know specific neighborhoods; an economist doesn't. There are neighborhood that have increased in price over 2007 and others have dropped. An economist will not tell you which ones they were. Some, not all, REALTORS are also investors and know something about investing. There are investors making money on the up market and the down market using different techniques; just as in stocks, you can make money on the ups and the downs. Prices will continue to fall in some but in not all areas. It's not only about prices, it's about financing as well.
0 votes
sam.katzenbe…, , Phoenix, AZ
Wed Jun 18, 2008
I've been a Realtor in this market a long time. I thought I had seen it all in late 2003, 2004 & 2005 as a seller's market, people were waiting in line, multiple offers on a lot of homes, lotteries, you name it.

Now, it is absolutely the opposite, the deals avaialble are amazing. If you go to the suburbs, you get more bang for your buck. One of the suburbs that I live in, Maricopa is just a 20 minute drive to Chandler, 25-30 minutes to Tempe and Mesa and 35-45 minutes to the airport and Downtown Phoenix. It is in Maricopa, with all of the foreclosures to be had, that you can get homes at $45 to $75 per square foot, and these are all homes in beautiful master planned communities and are homes built in 2000 or later. This is a buyer's market personified. If you have questions, please call me at (480) 250-8040.
0 votes
John Lynch, , 85255
Sat May 31, 2008
Now is the time to buy - prices are near or at bottom, mortgage rates are low and the selction is high...

new builds i.e., builder specs are being sold with attractive incentives - but many have been sold and builder ar only starting new homes with contracts; resales are best bet, either REO property or mls listed--stay awau from short saleds as they get bid on and there is no deal until bank says so.......... http://.www.scottsprop.com...........John Lynch RE/MAX Fine Properties
Web Reference:  http://www.scottsprop.com
0 votes
Mlt, Home Seller, Scottsdale, AZ
Sat May 31, 2008
We have a lovely home (2yrs old) on 2.5 acres, gated community with 360 mtn views. Beautiful area, beautiful house. We love it but must sell. Please contact me if you would like additional information. Photos, specs etc. This will be worth your while. MLT
0 votes
Debt Free Da…, , 85260
Tue May 27, 2008
They may go lower but I think rates will go up. I just purchased in Scottsdale a few months ago. I expected values to go down. I locked in a great rate. I don't plan on moving for a long time.
Web Reference:  http://getprequalified.com
0 votes
Sean Tackett, , Goodyear, AZ
Tue May 27, 2008
d517,

Unfortunately, predicting the market is pretty near impossible. I have a client who just purchased a builder inventory home in the west valley that originally sold for well over 650k for just about half price because the builder wanted to move the house. In this instance, it was a great buy. It's pretty much a gamble. I really think that the current market is great for buyers because if prices do drop, I don't see them dropping too drastically and if you plan to stay for a while, you SHOULD end up well ahead in the long run. Just do your homework and make sure you get an agent that will spend plenty of time finding a property that truly makes you happy.

Food for thought.
0 votes
d517, Home Owner, 85388
Tue May 27, 2008
My husband and I plan to retire in Phoenix.....we will buy, and not need a mortgage. Not interested in investing at all. We like the West Valley, especially with Mt views. Also like more land and a gated community. Also thought about building a custom home on a lot in a nice developement, with again, Mt views. We havent decided which route to take yet. I assume if the price of new homes has dropped, so has the price a custom home builder will charge to build. My question is simple....is this a good time to buy or build, or is next year going to be even better?
0 votes
Steve Belt, , Scottsdale, AZ
Tue May 27, 2008
d517, it appears you don't currently live in Phoenix. If so, are you considering an investment in Phoenix Real Estate? The definition of "a good time to buy" needs to take into consideration many factors. I would say now is better than it was 6 months or even a year ago, if you have 20% down, or are planning to use FHA financing. If you don't have 20% down or don't like the higher cost of FHA buying, today's lending environment really is pretty crappy, regardless of the purchase price on homes. If you are looking to make an investment, it is still difficult to find a cashflowing property in Phoenix. They can be found, but it's difficult. If you are planning to owner occupy, and are worried about prices going lower, you should be. Pricing are going lower right now. I've have a guess when the lowet price will be, but it's a SWAG at best, and about as meaningful. Today, I can say I would be a buyer, if I could buy something at least 5% lower than "market value", as demonstrated by previous sales of an owner occupied home. I would also only be a buyer, if I was buying the nicest home, on the nicest lot, in the nieghborhood. I'd be that picky, or I'd wait.

At any rate, help us out, and provide a bit more motive about what you plan to use the home for, where you are looking, etc. There are actually parts of the valley/market that are actually seeing a price increase right now, so it's not a very simple yes/no answer.
0 votes
Lucinda Tkach, , Phoenix, AZ
Mon May 26, 2008
Like other agents I have been able to help home buyers find great incentives with new builds and resale homes.

Feel free to call anytime!
0 votes
Daniel B Ste…, , Maricopa, AZ
Mon May 26, 2008
d517,

I believe it's a Great time to buy! Our team has negotiated some AMAZING deals for our clients. Because of the advantage position that Buyer's have right now, it would wise to jump in if your truly financially able. You can't go wrong whether your interest is in New Builds or Resale. The sweet smell of Seller Concessions is in the air! Don't let this window of opportunity close before you make a move.

Respectfully,

Daniel
0 votes
Todd Lee, Agent, Phoenix, AZ
Mon May 26, 2008
Right now is a great time to buy in Phoenix. All of the market trends and indicators seem to show that the market is at the bottom right now. There is a lot of activity in the market and the inventory has been dropping every month for the past 3 months in a row. The developers are still building but have slowed their production considerably. We will continue to see more foreclosures hit the market for the next year or so but I believe we have seen the price point hit at or very near the bottom.

If you are looking for a short term return on investment this is still not the best time but for a 3-5 year turn around I think you would be in pretty good shape!
0 votes
Mr.P, , Arizona
Mon May 26, 2008
Well d517,

There are some great deals out there, and some not so great deals.

The home buying process takes time, you need to get out and look at a few homes, see what they have to offer. Figure out what it is you want in a home. What is your dream home, and where is your perfect location. How much will it cost you a today rates?

Is this a good time to buy? Yes, if you find the perfect home that meets your needs and fits your budget.
Phoenix is a rather large place. A few neighborhoods have weathered the downturn very well. Many more have been hit hard.

In my opinion we stand a better chance of going lower, than higher. It really depends on what you buy and how much you spend.

If you are in the affordability range of 175K - 225K you should be out there. The only time we will know that the market has stopped declining is when inventory is low and prices begin to rise. Then it will be to late, because there are a lot of buyers on the sidelines. The best time to buy is when no one else wants to

Good Day & Good Luck
Patrick
0 votes
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