Phoenix MLS Predicting Lowest Median September Price in Nine Years (Surprise: apartment complex, landlords)

[skycrane]

take all the articles and opinions about what this market is going to do and throw it out the window! Everyone has their personal agenda when making assumptions about the facts or how they are interpreted. The market has to be isolated to specific areas and price ranges to really have anything worth talking about. People say "phoenix" as a whole than look at house prices as a whole. Of course the high end homes $500k and up aren't selling. Look at specific areas like Gilbert or Chandler for example. Most homes under $250k have 3-4 offers in mere days for example. Novice investors/home buyers look at the big picture not the details.

[Howard Roark]

Good point. But better yet, establish your objective (non-emotional) rules about where to spend and invest your money. Develop an asset allocation plan. Pay off all your debts first. After that, start investing in several different asset classes. The main ones are stocks, precious metals, and short term treasuries (or T-bills) and savings bonds.

When you think about buying a house you should avoid emotion again. Think objectively: Can my job get outsourced? Will the mortgage last longer than my job? If I intend to sell in seven years, will I likely be able to find people whose jobs are not outsourced who can afford my house?

If you are old enough and have saved for decades like myself, you can buy a house for cash. But again you have to think of asset allocation. Will I have enough money for catastrophic health care expenses and still be able to keep my house? Will I also have enough money for retirement? I have my own rule of thumb about what percent of my asset allocation in investing I can give up in order to buy a house. By NO means do I ever think of real estate as an investment. So I will find it hard to let go of my net worth to buy a house.

When you take all emotion out and become objective, you are immune to the people who are pushing you to buy. The same thing applies to stocks. I have not bought gold in well over a year, maybe a year and a half, because my asset allocation in precious metals is slightly above my set percentage. And television commercials are pushing for people to buy more gold - I just laugh. I don't get caught up in that but focus on buying more T-bills and savings bonds. At some point I will get behind in my stock alllocation and will have to buy more stocks!

Originally Posted by skycrane

take all the articles and opinions about what this market is going to do and throw it out the window! Everyone has their personal agenda when making assumptions about the facts or how they are interpreted. The market has to be isolated to specific areas and price ranges to really have anything worth talking about. People say "phoenix" as a whole than look at house prices as a whole. Of course the high end homes $500k and up aren't selling. Look at specific areas like Gilbert or Chandler for example. Most homes under $250k have 3-4 offers in mere days for example. Novice investors/home buyers look at the big picture not the details.

[MotleyCrew]

If it drops 40% there will be plenty of $3,000 well, not that cheap, but plenty of cheap cheap homes to buy. That would make our home around $80,000 and I would buy another one at that price. We will have to wait and see what shakes out.

[rjrcm]

Originally Posted by EnicAZ

...and the decline is accelerating according to our ARMLS statistics. People can go and view the ARMLS prediction of falling home values by looking at their website. It is located in the Market Data column. ...

ARMLS has made no such prediction. In fact, if you look at their latest Pending Price Index report, they are predicting flat to slightly up by the end of November. Check my post on the PPI at this link.

[roosevelt]

Houses in good neighborhoods with excellent schools may have foreclosures but the houses are sold quickly. What is left is iffy, always drive though the area you are interested in in the evening. I have looked at what appear to be nice neighborhoods but the first thing that hit me is why are there tons of kids toys in the front yard and where did all the trucks parked in the street come from? (kids play in front because the backyard was never landscaped and looks like vacant lot weed patch.

[Howard Roark]

It's a good idea to investigate the area you are interested in. Are the people sloppy? Is there a lot of noise past the time you normally go to bed? Next door neighbor has a drum set? The angle of the sun in the summer makes the room you will spend the most time in - hot? Are there registered sex offenders in the area? There used to be a website called rottenneighbor.com, but it expired a year or so ago. I wish it was up again. Very valuable to have sites like these warn about barking dogs, kids running wild, vandals, cRAP noise, other noise and so on in a neighborhood you want to move to.

When you buy a house, you don't invest in it. You invest in your neighbors. There's my real problem in home ownership.

Originally Posted by roosevelt

Houses in good neighborhoods with excellent schools may have foreclosures but the houses are sold quickly. What is left is iffy, always drive though the area you are interested in in the evening. I have looked at what appear to be nice neighborhoods but the first thing that hit me is why are there tons of kids toys in the front yard and where did all the trucks parked in the street come from? (kids play in front because the backyard was never landscaped and looks like vacant lot weed patch.

[suburbgal]

Originally Posted by roosevelt

Houses in good neighborhoods with excellent schools may have foreclosures but the houses are sold quickly. What is left is iffy, always drive though the area you are interested in in the evening. I have looked at what appear to be nice neighborhoods but the first thing that hit me is why are there tons of kids toys in the front yard and where did all the trucks parked in the street come from? (kids play in front because the backyard was never landscaped and looks like vacant lot weed patch.

That's laughable. Sure, if the neighborhood is leaving all the toys out and making it look cluttered it might be less desirable. If I were to see kids playing with each other (gasp) that might mean that the neighbors actually get along and the kids are able to throw a ball outside or ride their bikes. Kids aren't caged animals and shouldn't be treated like such...they should be able to play in the backyard or their front.

[rjrcm]

Originally Posted by EnicAZ

rjrcm, you must already be familiar with how the ARMLS predicts prices to drop. Our analysis looks at the end of the tax credit, jobless statistics, tighening credit, and reduced government housing support, to name a few. It's pretty clear to most that home prices are overvalued compared to the number of jobs and wage levels in the Phoenix area.

Without government tax credits, sales have already fallen greatly. This fall is going to be very rough, which is why we recommend people wait things out to see how bad this gets. Again, I don't agree with my colleages that values will drop 40% from here, but a lesser amount based on the data.

Why don't you enlighten me on how ARMLS predicts a price drop? ARMLS only states statistics for past results. You and your fellow office agents may interpret and extrapolate as you wish, but ARMLS does not with the exception of the Pending Price Index, which ARMLS only recently introduced. This is based on pending sales, which indicates a slight dip in prices in the next couple months trending back up in November.

Look, I'm not necessarily debating your interpretation of the MLS numbers or the economic outlook, although I think you are being a bit too pessimistic. I'm taking exception to your claim that ARMLS has made a prediction prices will decline 25+% over the next year. No where on the ARMLS website or in their communications do they state such a prediction.

[Discovery1]

will be higher in next 12 months than today..... Anyone?

[azjack]

"I like to bet 1K Phoenix median home price
will be higher in next 12 months than today..... Anyone? "

The best way to bet for or against PHX house prices is to just buy or not buy a PHX house.

Personally, I am warming up my lease renewal pen.