Phoenix MLS Predicting Lowest Median September Price in Nine Years (buyer, calculated)

[Ritchie_az]

At what price point do you think its safe to buy where the neighborhoods won't be dumps in 10 years?

I think it has less to do with price than with the number of renters in the neighborhood. Home owners tend to have more pride in their homes (although not always). Also, since the housing market fell across the board, I think the cheap-is-bad logic applies a little less than it would otherwise. Still, it's a good idea to try to project where you think a neighborhood might be in 5, 10, 15 years, etc, when purchasing. 10, 25 and even 50 year plans by the city can help with this....

[Ponderosa]

Originally Posted by ruby40

At what price point do you think its safe to buy where the neighborhoods won't be dumps in 10 years?

Going just on price and realizing that it's a gross generalization, you should be above median - ideally 50% or more. In PHX these days, the median is about 130K maybe less, so that is a little below 200K. That's puts you in a stable neighborhood almost for sure. Median has never been the most desirable home and below that is risky unless you plan to move out in a few years and maybe keep the property as a rental.

[Ritchie_az]

Way too pessimistic. I don't see a depression much less a double-dip recession going forward. Nothing will fall over two years. Everything will go up by at least 20% by 2016 with the lowest end much more than that. Median will be pushing 200K by Aug of 2016 if not sooner.

Thanks. That actually was my pessimistic prediction.

[Howard Roark]

If you already like the area, if the home is your dream home or it is upgradeable to your dream home, if you like the neighbors and are pretty sure they will be the same neighbors of yours for many more years, if you have enough emergency savings for two years of living expenses outside your 20% down payment for that home, and if you are very sure your job will not be outsourced and your wages won't be cut below an amount where you cannot afford PITIM (M for maintenance), then I say buy now!

Otherwise don't buy. Simple.

Originally Posted by SOON2BNSURPRISE

My thought though is what if you like the area? What if you like the home? What if your plan is to find an affordable home that you can purchase now and pay off in less than 10 years and yes even retire in? I see the possiblilties now in areas like Surprise and even El Mirage. That place has very low cost homes and seems to have been cleaning up their act.

[Pirate0202]

Wow, awesome posts everyone. Great food for thought. Keep your ideas coming!

[Zippyman]

Originally Posted by azriverfan.

I can only imagine the crowd moving into the 100k homes. It's true what they say, you get what you pay for. It's getting to the point that I'm considering moving to a more expensive and bigger house just so my kids can actually play in the neighborhood without getting run over by a drunk teenager driving an El Camino truck. It was never that way 3 years ago.

So it's somehow better if your kid gets squashed by a drunk teenager in a 7-series BMW? Seriously, I didn't grow up in AZ, but in my hometown, the children of the wealthy had alot more money and time on their hands to get wasted and raise he!! .

I'm really shocked that you feel that somehow people living in $400k+ homes are less likely to engage in criminal activities than those in $100k homes. By that logic, you wouldn't want cops, firefighters, teachers, or nurses living around you.

[roosevelt]

Originally Posted by Ritchie_az

I think it has less to do with price than with the number of renters in the neighborhood. Home owners tend to have more pride in their homes (although not always). Also, since the housing market fell across the board, I think the cheap-is-bad logic applies a little less than it would otherwise. Still, it's a good idea to try to project where you think a neighborhood might be in 5, 10, 15 years, etc, when purchasing. 10, 25 and even 50 year plans by the city can help with this....

The nicest areas I have ever been in are San Marino in California and Paradise Valley; they both have banned apartment houses since their inception. Also, they severely limit commercial property.

[ruby40]

What if 2 families buy and move into a single family home? Are their city rules about this? Do the HOA's have the power to protect property values from this type of thing? Are the HOA's funded enough to do their jobs with all the foreclosures?

[actinic]

AZ's year-over-year price drop second worst in the country - Housing Softening: Phoenix Dips Below April 2009 (and falling).

[jimj]

Originally Posted by Ritchie_az

The reason I can't agree with this is because the population is still growing. People are still having babies. Babies are still growing up into young adults. Young adults are still gowing off to college, etc. There is a need for houses (see: demand). That does not mean that everyone will be home owners--renters equate into this as well (investors and opportunists will buy the homes to rent out). Unless 500,000 or more of us all-of-a-sudden walk away from the Phoenix area, there will be a demand, even if it's a small one.



Did they tell you that home prices that are less than the cost to build are unsustainable? The homes at the very bottom of the market that were for sale for less than the cost-to-build had 10 or more people (mostly investors with cash) trying to buy them. Why? Because it's a sure thing. At some point, the value of the house will rise--the market says it must. So even if it drops a little after it's purchased, it's a sure thing that it will rise to a level at least equal to (but likely higher than) the cost to build.
That's why these predictions that the market will fall 35% or more are all B.S. That would put the whole valley below the cost to build. That is not sustainable. Investors and opportunists from across the world would be buying up all the homes, which would cause the market to go up.
Already you see folks from Canada and England in the market to purchase homes here (because of where the market fell). Make no mistake: if the market dips more--even just 1% or 2%--that will convince someone, somewhere to buy a home here. There will be buyers. And those buyers will cause the market to rise.

I kind of see it the same way. We purchased a house for less than $50 a sqft. You can't buy the materials for that, forget about the labor to put it up or the land/infrastructure. Eventually this will have to stop unless I guess if the whole country pretty much goes in the cr#pper.