How low will they go?? (Houses) (Phoenix, Tucson: short sales, apartment, foreclose)

[ArizonaBear]

Phoenix area:

Including Queen Creek, Anthem, Buckeye, etc. I predict an average 40% drop in average housing values by 2010-------part of it will be accomplished by simple 'core inflation' admittedly. In other words; a place worth $250K now even if still 'worth' that same $$$ figure will actually be worth about $230K in today's dollars-------factoring in 2-3% inflation per year.

[sablebaby]

Originally Posted by micrguy

Based on my experience in my neighborhood, I think house prices have just about hit bottom. They might drop 10% over the next 2-3 years, but I think we have seen the worst.

I agree with micrguy on this one. My neighborhood has settled I think. We dropped 15%, but has climbed a bit since then. I don't think we will drop as much as some believe. Under $200k, no way!! Like another person said, with our growth and industries continually moving in, I think we will get back to our normal appreciation rate of 10% per year in the near future (1-3 years).

[BriansPerspective]

I think we're seeing a strange occurance right now. Housing has become somewhat of a commodity. Even people in this post are hinting at it, saying that they want to jump back in before the prices go back up. Right now, people are on the sidelines waiting to see what happens. It will be interesting to see what happens when the media decides to tell people that the real estate market is on the rise again. We may see a rush to purchase homes and then we will quickly be in a seller's market with rising prices.

Up in Prescott, sales for site-built homes are running at 1/2 of the typical sales year. What is odd is that sellers are still putting their homes on the market. The sellers that HAVE to sell are selling, because they are lowering their prices to the current market value. Buyers are currently looking for a great deal, because 1) they can get one, and 2) they do not want to turn around a year from now and realize that their house is not worth what they paid for it.

[stupidbicyclist]

even if the "media" says that housing is on the rise, and then people go out and buy in a panic, it won't change much. Housing is going down right now because of the number/prices of houses compared to the number of people buying houses. That is how it is working, and the price of housing will not go up in a couple years. It is just like a recession, and it doesn't go away that quickly, it takes time to build back up. So I think even when it does start going back up it will take a long time to get to the prices that people want to get for their homes.

[sablebaby]

I think the media would help build up the hype. My other thought was to go to CA and stand on the street corner with a sign that says "Cheap homes in Phoenix!"

[sierraAZ]

Btw, the inventory in Phoenix is still going up, whereas in Tucson it's going down - Paper Money - A Real Estate Bubble Blog (http://www.paperdinero.com/Inventory.aspx - broken link)

Not sure what the matter with the foreclosure sites is, though... As I said, last night saw 1,912 foreclosures for Tucson on Yahoo real estate, which I thought was ridiculous, and it is at closer look. They keep a lot of inactive ones, count them, and there's no filter to eliminate them. Most other sites show numbers between 220 and 300, which makes sense. And I'm pretty sure foreclosures in Phoenix are found mostly in certain pockets, just as they are in Tucson - Tucson Foreclosures and The Subprime Buyers - Tucson Real Estate In The News - A Tucson AZ Real Estate Blog I've never been to Buckeye, Surprise, etc., but I'd bet the declines there are not even comparable to the declines in, let's say, Scottsdale... if there are any in Scottsdale.

[Mamma_Mia]

Originally Posted by micrguy

Currently having a fire sale at $200,000 and have been getting a lot of activity and two offers in the last month. If the offers fall through, I am renting the house and pulling it off the market for 2-3 years.

I am a little biased, but I think right now is a good time to start looking. Especially if you can find someone like our family that has to sell because we relocated out of town for a job.

These type of situations lead me to believe it is a good time to buy real estate in Phoenix. Whether or not there is a rush to buy within the next two years, I'm starting to think the prices are bottoming out based on people having to rent out their homes until it turns around. That means that's as low as they are willing to go and to me that means things can only get better. Even if it takes a few years, maybe its a good time to lock in on property now before even more people move to Phoenix.

[Winkelman]

Originally Posted by sablebaby

I agree with micrguy on this one. My neighborhood has settled I think. We dropped 15%, but has climbed a bit since then. I don't think we will drop as much as some believe. Under $200k, no way!! Like another person said, with our growth and industries continually moving in, I think we will get back to our normal appreciation rate of 10% per year in the near future (1-3 years).

Interesting...

Where did you hear that normal appreciation is 10% per year?

I did a little research and did you know that prior to 2004, the last time that Phoenix had double digit appreciation was in 1983? In fact from 1979 to 2004 average appreciation was about 5% per year, even counting the past two investor inflated years we are still only at 7%. So, if housing prices since the first quarter of 2004 had risen by 5% instead of the mania that took over the median price should be about $100,000 less than we are right now. And growth in Maricopa County has been running at about 50% per decade since the 1960's so our growth as a percentage is not greater than before.

So once again I ask you, where did you hear that the Phoenix market appreciates 10% per year?

You can read the data for yourself right here:

OFHEO -- Downloadable Data (broken link)

[sablebaby]

Originally Posted by Winkelman

Interesting...

Where did you hear that normal appreciation is 10% per year?

I did a little research and did you know that prior to 2004, the last time that Phoenix had double digit appreciation was in 1983? In fact from 1979 to 2004 average appreciation was about 5% per year, even counting the past two investor inflated years we are still only at 7%. So, if housing prices since the first quarter of 2004 had risen by 5% instead of the mania that took over the median price should be about $100,000 less than we are right now. And growth in Maricopa County has been running at about 50% per decade since the 1960's so our growth as a percentage is not greater than before.

So once again I ask you, where did you hear that the Phoenix market appreciates 10% per year?

You can read the data for yourself right here:

OFHEO -- Downloadable Data (broken link)

From my experience of watching certain markets in the phx area for the past 10 years. It's different in different areas. I think I was seeing about an 8-10% rate for several years.

[Ija Raj]

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Bye



Ija Raj