Frederick Ei…, Home Buyer in 16803

The NYTimes estimates that markets in FL and AZ are about 25% overpriced right now. When will normalcy return?

Asked by Frederick Eisele, 16803 Wed Mar 26, 2008

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Are we to believe that the NY Times is an authority on the real estate market in Arizona? That's curious. I suppose the LA Times has an expert on New York real estate as well. And the Dallas Morning News probably knows the most about Seattle Real Estate.

Ok, I've ranted a bit there, but my point is, getting real estate market advice from a source across the country is probably not likely to yield very accurate results.

In Phoenix (which is to say nothing of the entire state of Arizona), we have sub-markets that have seen little, if any price decline. We have other markets that have seen dramatic 50% price declines, with no floor in sight. Location, location, location is the big deciding factor. Normalcy for declining markets will return when inventory balances against demand. In our hardest hit areas, it looks to me like the decline is years from ending. In other areas, balance is almost at hand, while in other areas, balance was never out of hand.

Have I mentioned that real estate is local?
2 votes Thank Flag Link Wed Mar 26, 2008

Look, I know that for folks who don't have the time or the research skills that an agent can be a great help. Is an agent necessary? Not really. Not if you are willing to do a little reading and research. On the other hand, almost *EVERY* Realtor I spoke have ever spoken with during my investigation of their practices has tried to get me into a house that was dependent on two incomes to pay for and usually had crazy terms and a balloon payment.

If these Agents were committed to doing what was best in the interest of their clients they would not be talking folks into a house they might not be able to afford a few years down the road. Instead they get them in a house, however they can, and they get their commission.

From what I have seen, it is a combination of greedy real estate ages and irresponsible consumers who have created a lot of the problems you see today in the housing and mortgage industry. Add to threat the double whammy of gas prices that are almost double of what they were a year or so ago and that spells the real trouble we are in today - but I digress...

I wasn't bashing. Just calling a spade a spade. Suer there are decent folk in real estate but there are a lot of folks out there pushing to over inflate the market as well with no thought to what it does to the less fortunate. The whole housing as an investment attitude is what got us where we are today. If it was not for out of state (California and other) investors buying up houses to flip for a profit maybe more average folks in Tucson could afford to buy a house. IMHO it is borderline criminal what they have let the industry get away with and I'd say we should call for regulation of it but we all know how far that would fly with the current administration.

To be fair, when it comes to Tucson I am a little less than objective at times as I find what the real estate market has done to the town over the last 20+ years. They built all the way up the sides of the Catalina's - somethign the City Council promised they would never let happen but, in true Tucson form, someone's palm got greased and up the mountain side they went.

Much of the beauty of this valley has been destroyed so rich retirees can have good views and play golf.

But like I said, I'm partial to this place ;-)
1 vote Thank Flag Link Tue Jun 10, 2008
Who are you going to believe more, a newspaper in a different market (with no vested interest) or real estate agents from he are who have been getting fat and happy off the over inflated prices out here. No on in their right mind can look at what has gone on out here over the past few years and say the market is not over inflated. Several years ago we had investors from California buying new construction houses in the Tucson/Vail for 170K and flipping them for 200+ *before they were even built*.

They have been raping us out here for years. The rich keep moving out here and driving up the prices so the rest of the town can't afford to buy. It is insane.

That said, there are deals to be had but they are few and far between. Wait a while longer till more of the folks who overbought on variable rate loans with balloon payments at the end get foreclosed on and forced out of their homes. When thee are *lots* of empty new homes go looking for an older one. The new ones will *still* cost too much as folks will have too much in them to sell them for what they ought to cost.

Look for an older property, bought and paid for *before* the bubble. The folks selling these won't be upside down on them and probably won't be so hard pressed for $$.

Look for a private sale. The realtors out here, well most of them that I've dealt with, are vultures.

Oh, and when they say things like 'desirable areas' they are talking about expensive homes for folks with deep pockets.
1 vote Thank Flag Link Tue Jun 10, 2008
This type of studies deal with the averages. Reality is that some properties are overpriced and some are not. I am talking specificaly about Tucson and Sierra Vista areas. Normalcy will return propably by this time next year. Normalcy means that properties will stop loosing value and start slow recovery process.
If you have something more specific in mindf, please let me know.
1 vote Thank Flag Link Sat Jun 7, 2008
Get advice from a Local Real Estate Professional in as far as over priced under priced markets. Tucson was on the desirable over priced list with a whopping mean price of around $244,00 at the time. However, it also just made the affordable retirement city list according to CNN Money Magazine. with a mean price of around $225,000. It depend on who you are to believe the media, or should I say which media, or experienced area real estate agents.
1 vote Thank Flag Link Fri Apr 4, 2008
be patient


it took about 4 years to inflate the bubble

usually they pop quickly

this one is different

afterall people are living in them


good luck
1 vote Thank Flag Link Wed Mar 26, 2008
Glad you asked. The NY Times is not an expert in real estate in Arizona and as usual someone wrote an article to sensationalize a story to sell papers. We have seen some areas that really went down 50-60% come back about 20-30% but they tend to be in the out laying areas that were built in the "Bubble" times. Most homes have seen a 3-5 % increase and a lot of desireable area have not risen much as they didn't drop much. So to get the true story, work with an Arizona Realtor to get the "rest of the story".
0 votes Thank Flag Link Tue Jun 4, 2013
I think looking back almost three years from when the original answers came in, it's clear that nobody knew what way real estate prices or interest rates would go over the following years. One person said interest rates would have to go up (they went down). Likewise, many said prices would stabilize and start to rise the following year (wrong). The moral of the story is NOBODY knows. Don't listen to brokers "experts" or the media. Perhaps the safest way to measure value is "how much would this home rent for"? If the asking price when factoring in mortgage payments, taxes, insurance, maintenance etc is far above the rent you'd get, the house is overpriced. The lower the rent to expense ratio is, the more overpriced the home. Since nobody can predict the future, at least get present value right.
0 votes Thank Flag Link Sun Dec 5, 2010
I don't trust anyone; everyone has a motive. I think the NYTimes is every bit as credible as a local realtor. NYTimes has nothing to lose. Realtors stand to lose big if they convince every potential buyer to hold off a year or so to see where prices drop to. That's akin to them saying-- "I'll go without a paycheck for another year, then take a big pay cut." They are obviously biased because they have to be. That's the problem with any commission-based job. I just bought a home in Tucson and my realtor was awesome. I trusted her because she actually convinced me to offer less than I was originally willing on most places. But even she told me, back when we started looking in November, that the decline was over and it was time to buy now....and prices continued to drop. No one has a crystal ball, but I will echo a few things that others said here below: it is definitely a local thing. And local doesn't mean Arizona or Tucson, it means Barrio Viejo Neighborhood vs. Catalina Foothills neighborhood. Also, back to the NYT stats, those numbers are aggregate data which mean nothing to the single house you are going to buy. Look for a fair price in a good location in a home that was bought and paid for (as the earlier commenter said) BEFORE the bubble and you'll be fine. However, if you plan to buy EVERY house for sale in FL and EVERY house for sale in AZ, count on losing 25% of your investment...maybe.
0 votes Thank Flag Link Fri Jun 13, 2008

I can see what size lots the listed homes are on. I can see what kind of appliances they have. I can see what kind of heating and cooling they have. I can even see what houses in the area sold for recently and over time. I can do this all online.

At the end of the day, there are *always* going to be those people who do not have the time, or maybe they have the time or not the initiative (or the confidence even) to do certain things (like find and purchase a home) on their own so Realtors, Auto Mechanics, Electricians, Appliance repairmen, and a whole slew of other professionals will *always* have a market. I'm not one of those people though and there are plenty of other folks who are not as well. Even in my business there are those who always hire a pro and those who always do it on their own.

Also, I'm sure that, just as in any other business there are stand up Realtors and Realtors who will do anythign to put a buck in their pocket,. That is one of the things you have to deal with in a capitalist society as capitalism can tend to nurture greed and bring out the worst in many folks unfortunate as that may be.

As for the pre-approval... my point was that Realtors were working with bans and lenders during the bubble to help folks get approved for loans they could afford *at the moment* but a lot of those were variable rate and with balloon payments.

If you look at what they did, they petty much created a large part of the mess we are in now. What it looks like from where I stand is that they did it on purpose figuring they'd take all this money from folks and, when they defaulted because of the balloon payment at the end, they could take the house back and sell it to someone else all over again.

It's like the old timers who won land in Texas (and probably every where else as well) do. They sell land, owner financed strictly to folks with no kind of credit because they know they'll miss a payment or two and then they'll take it back and sell it to someone else.

In this case they were not selling to folks with no credit but you have to wonder if they really thought every single person they sold to would be able to actually make that balloon payment...

If you are, as you say you are, a stand up kind of Realtor and you have your clients best interests, and not your own bank account, in mind when you sell a house then I applaud you and I hope your work ethic rubs off on more of your peers. :-)
0 votes Thank Flag Link Wed Jun 11, 2008
Hi Tucson Desert,

I am sorry that you seem to have had a bad experience with more than one Realtor. We would have given you a directory of several mortgage companies to get your preapproval based on your income and your desired payment.
We make sure that the Buyers we work with are prequalified, and feel comfortable with the payment that they have been quoted, before we show them homes in their desired price range.
We personally take our Profession very seriously. one could probably do any job with a text book or the interent except probably brain surgery.....
It does not mean that you do not need a Professional to assist you.
Yes one can get information from Escrow on one house in an area, and yes probaby go through the motions of a house sale without a Realtor, but you may not have intimate knowledge of the market , the area, the houses that have sold, which one was a foreclosure, which one was not upgraded, which one has a larger backyard , which one had a three car garage fetc. or a market analysis.
I beg to differ that one does require the services of an experienced Realtor in a transaction. Best wishes...we love Tucson too.. Anne :)
Web Reference:
0 votes Thank Flag Link Tue Jun 10, 2008
Hi Tucson Desert,

I think you may have to look at Tucson changing from a quiet small town to a much bigger City...remember we hit the million population not so long ago.
We are on the most desirable cities to retire list ,even with a not so great economy.
The current market has great oppportunities for savvy investor, whether they buy from a personal owner or a Real Estate Agency listed property.
I believe, as a Realtor, I speak for our Profession that we are not " vultures"....quite the opposite... we are Professionals that assist Buyers and Sellers with the sale or purchase of their home.
Quite often we know the history of a property and have seen it sold many times.. We can provide valuable insight and experience to a Buyer and a Seller in their Tucson Home Purchase or Sale.
We often know about properties that are going on the market before they are publicly known.
Please think about the importance of words, before you bash a credible group of Professionals that work very hard to assist people with the most important transaction of their life..their home.
Web Reference:
0 votes Thank Flag Link Tue Jun 10, 2008
Didn't you say you bought a house. You need to change your name from "Debt Free Dave" to something like "Debt for 30 yrs Dave". Your losing credibility. How is that AZ market? Are we at 1999 prices yet? I guess it may take another few years or so.
0 votes Thank Flag Link Tue Jun 10, 2008
In Orlando area we at 2002 medium home price levels, that's erasing all the crazy pice gains of the last 6 years how much lower do you want us to go? Yep, you don't hear that in the press, they had a tough time giving the sales results for the last two months without ( 6.4% for the U.S. with 4+% in may for the south and 3.3 in april for our area ) without saying something bad. Your focaus now should not be how much more homes will drop ( experts say no more than 1% in some areas the balance of the year ) but the fact that the FED has point to interest rate hikes end of year. It will cost more per month and life of loan with every 1/4 point hike as oppose to a 1% drop ( $200,00 x 1% = $2,000 ).

Dave Lowe
0 votes Thank Flag Link Tue Jun 10, 2008
I live in AZ... I don't see the evidence of that. Properties in desirable areas are moving. The media is full of the gloom and doomers. I wish they would get off it already.
Web Reference:
0 votes Thank Flag Link Sat Jun 7, 2008
Will you please post the article, pr what date it was written and the author.
I can`t find it, and would like to read it myself.
0 votes Thank Flag Link Wed Mar 26, 2008
Mr.P, Other/Just Looking in Arizona
The report in the NYTimes your are quoting estimates the "average" overpricing in Fl and AZ. So according to Steve's numbers, they are pretty much on track. Some areas of FL are still really hurting, like Miami. This is a combination of over building, market conditions and greed. AZ is a condition of market conditions and over building. Our entire business is to help clients locate the very best property across the country. Give me a call if you need additional help.
Marian Schaffer
The Schaffer Realty Group
0 votes Thank Flag Link Wed Mar 26, 2008
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