Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
So the question I have has to do with different sectors or price points if you will which I think might give some indication of where this market is headed.
If you take the lower priced properties (formaly $125 or so) now priced around $70-90k have these dropped much in the last few months? Then take the $150-175k now priced at $100k more or less, have these dropped much?
I hope I make sense, I guess where I'm going is different price points have to have different % drops and at some point becomes non existant and a floor is set.
Good question. Within the Valley, some towns are more stable than others. As I mentioned before, some zips inside of a town have different levels of stability, appreciation or erosion. And within price sectors in the same zip code, there are different things happening. To make matter more confusing, things seem to change every few months.
Saying all of that. As a whole, the 1st time buyers have dropped off (>$100K) so I "think" demand has softened a bit. I say "I think" because that was last months trend. God only knows it probably has changed again.
Saying that Jimj, I think you got a super deal (price per square foot in a pretty "stable" area). I'd be feeling pretty comfortable that you are in good shape. even if we get another 10% down, in the low $100K range on a home that would cost 70% more to re-build seems pretty safe to me! "That's why my office is telling people it's safe to buy the bigger homes < $60 a sq foot range in your neck of the woods".
Because of articles like these, JPMorgan halts 50K foreclosures for possible flaws (http://www.sfgate.com/cgi-bin/article.cgi?source=patrick.net&f=/n/a/2010/09/29/financial/f132726D77.DTL#divider - broken link) my office is revising their predicted 40% downward trend by year end. Now we think it will be up by 3%. Our bad!
I'll bet others put a halt on the process as well. Robo-signer was processing 10,000 foreclosures a month proving that we can always trust businesses to self regulate.
For whatever reason, I have noticed that the Phoenix area foreclosure inventory has stopped building over the past couple of weeks. Potentially this Robo-Signer has made some banks nervous. Or, the demand has picked up in the lowest time of the year. Does anybody know what might be happening?
Do you have any insight on the Surprise/Peoria market? The portal I get, and I know it only tells you a fraction of what is going on, seems to be increasing in the number of homes listed in foreclosure or short sale. Is this the "shadow' inventory they talk about hitting?
Do you have any insight on the Surprise/Peoria market? The portal I get, and I know it only tells you a fraction of what is going on, seems to be increasing in the number of homes listed in foreclosure or short sale. Is this the "shadow' inventory they talk about hitting?
Motley. Disclaimer. I'm no expert because I'm not in the trenches. I'm simply talking to a few friend who are active "investors" as well as reading (way too much). I should mention, in case it wasn't obvious, "my office thinks..." statement was tong-and-cheek.
Saying all of that, look at Arizona Real Estate Notebook and focus on the right hand side of the page that shows a bunch of zip codes.
John is an economist and a realist. Meaning, I don't smell commission breath and he doesn't have a cheerleader agenda (well other than to tell it like it is and he will sell you a property).
He will upload the September numbers around October 7th.
Personally, I have not studied Peoria. I have stared at Surprise and it seems to have come back down to April 2010. I really don't see much more give in that area unless the banks flood the market. I'm personally guessing there is more to go in Gilbert, SanTan, Mesa, Chandler, Ahwatukee, and parts of Scottsdale.
Now. If you are talking Northern Peoria I think there might be some more erosion on the spendy stuff. But I think Sun City West is very desirable and a lot of people there have equity. But my opinion doesn't assume the worst. I also think Phoenix will come out of all of this before other parts of the country so I am carefully monitoring what is going on. If I feel the market turning, I predict I will take the plunge in December. I find it hard to buy before December because of the election, somsumer opinion of the housing market, and the slow season.
I'm REALLY hoping for a turn. Like many others, my business is tied into housing. Needless to say, that is why I find myself on this forum (more time than money).
"Bank owned properties sold for an average discount of almost 35 percent in the second quarter, little changed from both the previous quarter and a year earlier. Such properties accounted for 15 percent of all U.S. home sales, down from almost 19 percent in the first quarter and 20 percent a year earlier, RealtyTrac data show.
Properties in default or scheduled for auction(Short Sales) sold for an average discount of almost 13 percent, down from 16 percent in the previous quarter and 19 percent a year earlier. These homes are often sold in short sales, where lenders accept less than the outstanding loan amount for the property, RealtyTrac said. Sales of properties either in default or headed for auction accounted for 9 percent of all transactions."
__________________________________________________ _______________________________
I therefore conclude that the bamks loss is lot less on a short sale. Therefore the momentum will probably shift from bank owned to shorts.
What this also tells me is that if a short sale is priced below a bank owned property, statistically it's not going to happen. In other words, it's probably the Realtor playing games?? Any agents care to comment?
__________________________________________________ _______________________________
Ya know MN, a couple of things you pointed out were something that confuddled me while we were looking. Here you have Surprise where prices are pretty much in the "pay the buyer to take it" range or as I saw it absolutely DIRT CHEAP. Next you have Queen Creek with prices a bit higher for no reason I could figure out then you hit Gilbert,Chandler etc and prices seem crazy compared to the rest of the market. We've been told "it's because Gilbert is closer in" but is it really, and wouldn't that totally depend on closer to what?
I guess what I'm seeing and thinking is those "metro" areas that homeowners have been so "proud" of price wise up to now have way more to fall before they come in line with what's actually happening/happened to the rest of the market and I would say that I'd be more leery (read afraid) of catching a falling knife (to coin a phrase) buying metro than outlying areas as it seems the outlying areas took their hit fast and dirty so would have less of a % drop (expressed in dollars instead of pure percentage) than metro?
MN-Born-n-Raised - I think the reason why the short sale list prices are put on the market at or below foreclosure prices are to gain interest on a property and hopefully an offer (games the bank and realtors play). Realtors know the only way they can begin speaking to banks about a real price they will negotiate with is if they have an offer on the home. Since the banks are flooded with short sales & foreclosures they typically won't begin negotiations on what they will accept on a price until there is an offer (I've spoke with realtors where they will even place the offer themselves so to get the bank working with them on the property). I think that's there are situations where a home will be listed on the market and then later the price increases.
When the whole mess started a few years ago, realtors had also told me that some banks preferred having the foreclosure on their books over a short sale because they could write down the loss and it was better for them on their books. I don't know if that's changed in today's world or not.
suburbgal. There are plenty of games in all corners of this real estate mess. For instance, many sellers on a Shorts want to delay as long as possible. They really don't want an offer to be accepted right away.
Some RE agents play dirty as well. I'm personally observed friends get burnt on Shorts because the agent has there own interest in mind (as in not presenting other higher / stronger offers so they don't have to split commissions).
Many 1st in line mortgage companies are screwing the 2nd mortgage company. 1st are taking less because they don't care (PMI Insurance). Even if your loan says "USBANK" (for instance) they are not taking the hit; maybe Fannie or Freddie are so they "banks" don't have to be rational. So in the end, the maze is complex. If you can get your hands wrapped around all of this you can smell fraud and avoid many hassles. You also can increase your odds of getting the golden egg.
I figure I'll post my own experience here, for what it's worth.
I bought a short sale condo in Scottsdale last Sept. for what seemed like a bargain price (50% of what the owner paid in 2007). Coming from CA, the prices seemed crazy low, so I thought it was a no-brainer. I paid cash, and am now in the process of refinancing it back to a 'conventional loan' so I can restore my cash reserve and get the tax break, etc.
The condo appraised for 20% less than I paid, and I trust that appraisal in the sense that, I see actual units for sale in the complex around that price and NOT selling. Clearly I would have been better off renting for a year.
I started the 'refi' process 6 months ago. I have a near-perfect credit score (800+), money in the bank, equity in my other home in CA, and a high paying job. But the mortgage company are putting me through the ringer. After supplying tax returns, pay stubs, bank statements, etc, they now want W2s (why, since the tax return includes the W2 !!), and they want to know why I listed a certain street address 15 years ago on some application for some ancient loan ... it's been dragging on for 6 months and I don't hear from anyone for months at a time.
Now, I really don't care since I'm just trying to restore my cash position ... but if this is how they are treating me, how are they treating some poor sucker who's trying to do a first-time home purchase?! It's no wonder places aren't selling. My conclusion is, the banks are now ultra-conservative to make up for their ultra-liberal/stupid practices of a few years ago, and everyone is suffering the consequences.
Motley. Disclaimer. I'm no expert because I'm not in the trenches. I'm simply talking to a few friend who are active "investors" as well as reading (way too much). I should mention, in case it wasn't obvious, "my office thinks..." statement was tong-and-cheek.
Saying all of that, look at Arizona Real Estate Notebook and focus on the right hand side of the page that shows a bunch of zip codes.
John is an economist and a realist. Meaning, I don't smell commission breath and he doesn't have a cheerleader agenda (well other than to tell it like it is and he will sell you a property).
He will upload the September numbers around October 7th.
Personally, I have not studied Peoria. I have stared at Surprise and it seems to have come back down to April 2010. I really don't see much more give in that area unless the banks flood the market. I'm personally guessing there is more to go in Gilbert, SanTan, Mesa, Chandler, Ahwatukee, and parts of Scottsdale.
Now. If you are talking Northern Peoria I think there might be some more erosion on the spendy stuff. But I think Sun City West is very desirable and a lot of people there have equity. But my opinion doesn't assume the worst. I also think Phoenix will come out of all of this before other parts of the country so I am carefully monitoring what is going on. If I feel the market turning, I predict I will take the plunge in December. I find it hard to buy before December because of the election, somsumer opinion of the housing market, and the slow season.
I'm REALLY hoping for a turn. Like many others, my business is tied into housing. Needless to say, that is why I find myself on this forum (more time than money).
Thanks so much for your input. I have noticed homes in some parts of Surprise back down a little, but have also increased in numbers of foreclosed homes hitting the MLS/portal. Next year should be interesting.
" So in the end, the maze is complex. If you can get your hands wrapped around all of this you can smell fraud and avoid many hassles. You also can increase your odds of getting the golden egg."
I would avoid short sales altogether.
I mean if I were to buy a SFH again, which I might do in a couple of years, I would choose a lender-owned house. It is hard enough to find an area, subdivision, street, and house that you think would be a good place to live for several years. Who wants to find that the house is not really for sale or not really for sale at the asking price. Who wants to wait six months in limbo when there are plenty of post-foreclosures that you could have pursued.
Quote:
"(50% of what the owner paid in 2007). Coming from CA, the prices seemed crazy low, so I thought it was a no-brainer."
There is definitely no such thing as a "no-brainer" when it comes to spending tens or hundreds of thousands of dollars. I recall someone asking me years ago what their North Phoenix house would be worth in West Los Angeles. I replied with some half-answer because it was just a silly question. A modest lot on former desert scrub on the northern edge of Phoenix is simply not Westwood, Brentwood, or Santa Monica. I like both places, but it is perfectly rational for places in Phoenix, Scottsdale, Peoria, wherever to be much cheaper with our abundant build-able land, extreme temperatures, and lower incomes.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Our bad!
