How low will they go?? (Houses) (Phoenix, Tucson: real estate, housing, rent)

[stupidbicyclist]

I knew housing was at a crash right now, but I just read the new businessweek about the housing crash, and it was really interesting. It was saying that it will continue to go down for the next three years. So my question, how low do you think a house that is now priced at about $250K go down in the next year or two in AZ? I am positive it will go down somewhat substantially, just not sure of the actual amount.

[Winkelman]

$150,000 - $175,000 but it might take 3-4 years to bottom out at those prices.

[Ponderosa]

Like everything else around here it is highly dependent on location. But I don't know of any respected sources that are predicting much more decline in home values. Values in desireable areas have been stable with maybe a percent or two drop for several months now. Overall they have dropped 5-10% from peaks - far less than the alarmist press might have you believe.

[dmiller01]

5% a year for 3 years max is my prediction so I'd say 215K. I really don't see median prices going below 200K because of the continued growth in the valley and our strong local economy.

[sierraAZ]

Hmm, I'm very interested in the subject myself, or shall we say quite freaked out about it... Being in a limbo right now with new construction, I'm not quite sure what to wish for... I've read pretty much anything there is to read online and I don't mean the mainstream. The truth is usually somewhere between the gloom and the cheer. In AZ the hardest hit are the new developments on the outskirts of the cities (which is the case in many other places) and the prices and the resilience in the different zip codes vary widely. Can't say much else about Phoenix. I live in Tucson. Tucson is bunched together with Phoenix on many reports, but my personal opinion is that the situation is not as bad here for two reasons: much fewer new houses were built here in comparison to Phoenix and the percentage of subprime loans was lower. The builders also came to a screeching halt. At this time there are two zip codes where the market is almost sellers', quite a few - almost balanced, and some - pretty bad (outskirts...) - Tucson Real Estate In The News - A Tucson AZ Real Estate Blog The July reports are not out yet. Unfortunately, TARMLS found the most appropriate time to make various changes which may skew the data, I'm afraid.

In my own independent research I'm finding contradicting facts. Some imply reasonably bright to pretty bright future based on job and population growth (Tucson has the highest job growth rate in the nation at 5.7% with unemployment of 3.9%; the only other 2 cities that fare better have a little lower growth, but a little lower unemployment as well), some are very discouraging. I've seen quite a few houses that did sell this year for 20-30K below the price they were bought at in 2005. Could've been foreclosures. There's no doubt there are foreclosures... According to Yahoo there are 1,912 pre-foreclosures and foreclosures in Tucson as we speak, but I highly doubt that... They must include at least the whole Pima county, if not even Pinal. If one of the worst zip codes has fewer than 300, can't see how the whole city has 1,912... but could be wrong. The thing is that I get the more optimistic ideas from hard-fact economic reports, not from sale pitches or housing panic sites. There was a funny discussion on one of the housing gloom sites, though, which may have some merit. I don't follow Time magazine on regular basis, but there seemed to be consensus that when Time runs a cover story on some trend the trend is over. They said Time ran a cover on the housing boom in 2005 just when it was over. Everybody was surprised how come they don't mention anything on the housing bust. Well, they just did! Perhaps it means the bottom's been hit or it's close.

This site is kinda entertaining and puts things into a little perspective: Matrix » [Time] Housing Story Redux There are dreamers in this world who believe that prices will go down to 100-120 times the respective rent, to 2.5 your annual salary, etc., but IMHO this ain't gonna happen...

[German George]

Hello all,

I just moved to Sierra Vista AZ a few days ago. I just found a house to rent that I like 4br/2ba 2000sft, for $1200 a month in a decent part of town.

My impression is there are a lot of houses for sale here. Driving through some of the neighborhoods it seems like one out of every five homes are for sale. This could not be good news for current home owners (excess housing). I found out the main military base here just renovated there Post housing and is now having soldiers move back on Post (This accounts for the many homes for sale in the local area). So one would think the housing prices should fall over the coming months. This should be good news for people wanting to retire to this already noted retirement community of Sierra Vista. But hey I am no expert!! I have my reasons for renting vs. owning and I am new to the "Desert" so I am not sure how the family and I are going to like it yet.

[Xpat]

Thanks for everyone's insights in this thread. We are currently stationed in Italy but plan to retire in AZ in 2-3 years (just not sure where).


George,
We lived in SV for 3 years and found it OK, depending on what you and your family like to do. If you like to do things outdoors, there are many great hikes in the Huachuca mountains - but even more to do in the greater Tucson area. There is also a German backerei and store in Tucson in case you are missing some food items from home.

[Mamma_Mia]

Originally Posted by stupidbicyclist

I knew housing was at a crash right now, but I just read the new businessweek about the housing crash, and it was really interesting. It was saying that it will continue to go down for the next three years. So my question, how low do you think a house that is now priced at about $250K go down in the next year or two in AZ? I am positive it will go down somewhat substantially, just not sure of the actual amount.

This is a good question, I was going to post one similar.

Most of my family has already moved to Phoenix and most of them renting. But my brother says its time to buy so now everyone is scrambling to buy. I'm moving next month and wondering if I should rent or buy too.

My mom says prices are going to keep going down, but my brother says there are a lot of houses for rent, which means the people bought the house for a certain price and can't go down anymore or won't because they don't want to loose money.

Its really confusing. If they aren't going to drop much more then I definitely want to get a deal while we can. So many people moving to Phoenix its hard to say what will happen.

So I guess the question is will the prices go up or down and which is better to buy or rent?

[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. A year and a half ago at the height of the housing boom the house across the street from mine went for $250,000 after being fixed up by a flipper. Just down the street, the same style of house that needed fixing up went for $219,000. Last year I put my house that was the same style as both of these houses and was in the middle condition-wise on the market at $235,000. 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. From talking to some of our friends it seems like if a neighborhood has 2-3 houses for sale, one has to sell and the other two are testing the waters and are artificially keeping the prices up.

[Ponderosa]

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. A year and a half ago at the height of the housing boom the house across the street from mine went for $250,000 after being fixed up by a flipper. Just down the street, the same style of house that needed fixing up went for $219,000. Last year I put my house that was the same style as both of these houses and was in the middle condition-wise on the market at $235,000. 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. From talking to some of our friends it seems like if a neighborhood has 2-3 houses for sale, one has to sell and the other two are testing the waters and are artificially keeping the prices up.

It's a matter of perspective. You see the others keeping prices artificially high and I imagine the other two see desperate people driving prices artificially lower. It's a standoff now between buyers and sellers with sellers not willing to pay asking prices and vice versa. Hence the price stagnation. As your own situation illustrates, though, there are "distressed" deals to be had for sharp buyers. The long term view supports prices though as more people come to the area than leave each year by a wide (numerically) margin ensuring demand growth.