68% of home owners in metro Phoenix have negative equity (mortgages, loans)

[seattlecoming]

Originally Posted by roosevelt

Let's see, thanks to the government, you can walk away from your house, 1st and 2nd mortgages (if you got the 2nd at the time of the 1st) and live payment free for over a year plus not pay property taxes; or, rent the house out. A person could accumulate all that money and have plenty to put down on a similar house at 1/3 the price.

That's what my brother wants not to do. He just wants to move out of Phoenix just like I did and not be another statistic that milks off the government teat. I should consider myself very lucky- I didn't buy a home during the market bubble when lots of others did. I rented and was able to break my lease with little problem when I got the job offer in Washington.

[seattlecoming]

Originally Posted by _Charles_

The idea that AZ's economy can remain dependant on real estate speculation is preposterous.
As a plan for the future that would no plan at all.

As another poster pointed out the job losses due to NAFTA have been massive - AZ lost more than 11 thousand jobs since NAFTA began and this will be made up by selling houses? LOL good grief.

In 1980 Motorola was AZ's largest private employer - now its WalMart. Yea!!! Quick everyone go buy a house!

I remember those days when Phoenix was a boom area thanks to lucrative employers like Motorola, Honeywell, and Intel. They were prosperous times but those days are gone. You are totally spot on - Phoenix and all the other similar spread-out sun belt cities will keep spinning the wheels and go nowhere if the economic base is speculative cookie-cutter development and reliance on new arrivals from the midwest.

[seattlecoming]

Originally Posted by khuntrevor

And with 30%+ underwater in Seattle, there are plenty of people in a rut there, too.

The recession has taken a toll all over the country. Seattle has taken a hit too but the down fall was less of a factor here than in the sun belt cities that are overly dependant on home construction like Phoenix and Vegas. 68% in Phoenix compared to 30% in Seattle? LOL! The difference between the two is a near-landslide.

[Ponderosa]

Originally Posted by seattlecoming

I meant to say short sale, I stand corrected. It still doesn't help my brother and his family who bought a home 7 years ago when everything seemed peachy-keen but are now feeling wedged between a rock and hard place. He and his wife made some not-so-stellar decisions but they're among the many people who did around that time. Many others have no intention of selling as you say, and that's because many people feel stuck and can't get out if they wanted to.

Buying a house 7 years ago (2004) was not a bad decision. Prices were still pre boom mostly. If you bought in 2006 it may take many years to come back to even. But 2004 prices will be here again a lot sooner than many seem to think. I am stuck too, but I am always happy I am stuck in a sunny, desirable place than say Cleveland (or Seattle for that matter). Things could be worse.

[khuntrevor]

Originally Posted by seattlecoming

The recession has taken a toll all over the country. Seattle has taken a hit too but the down fall was less of a factor here than in the sun belt cities that are overly dependant on home construction like Phoenix and Vegas. 68% in Phoenix compared to 30% in Seattle? LOL! The difference between the two is a near-landslide.

But with houses costing three times more in Seattle, maybe the difference isn't all that great.

225 Nw 49th St Seattle WA - Home For Sale and Real Estate Listing - MLS #212885 - Realtor.com®

Doesn't look like a good place to put down roots to me. Keep in mind, that Seattle, Portland, and Minneapolis were among the last wave of cities to get hit with declining values--there is a lot more downside up there. I wouldn't trade the Sun for your umbrella any day. Can do without wearing a headset for Microsoft, too.

[Discovery1]

Originally Posted by khuntrevor

But with houses costing three times more in Seattle, maybe the difference isn't all that great.

225 Nw 49th St Seattle WA - Home For Sale and Real Estate Listing - MLS #212885 - Realtor.com®

Doesn't look like a good place to put down roots to me. Keep in mind, that Seattle, Portland, and Minneapolis were among the last wave of cities to get hit with declining values--there is a lot more downside up there. I wouldn't trade the Sun for your umbrella any day. Can do without wearing a headset for Microsoft, too.

True.... What is happening in Seattle and Portland right now very similar to Phoenix back in the last quarter of 2008. Homes enter the market at incredible rate and the percentage of reductions started to accelerate. But there is one thing i noted is that the local media up there in the northwest don't spend most of their time bashing their housing market like here in the valley.
Something to think about sense of communities.

[khuntrevor]

Most media outlets only paint a fluffy side of the RE market--never the nuts and bolts. I think they've only been bearish lately--which may actually be an indicator that it's time to buy.

[Valley Native]

Originally Posted by seattlecoming

What about people that want to sell? My brother and his wife would like move out of Arid-zona entirely and live up near me but they won't be able to unless they sell short. If they do that they don't stand a chance of being able to afford much at all. Is it any wonder so many people feel like they're stuck in a rut there?

That's what I have said all long. Potential sellers wouldn't be able to sell their homes and make any kind of decent profit in this current market. Many newer homeowners would have to take a loss if they sold now. The mentality around here is "cheap is good" ... and I always counter that by explaining how cheap housing tends to bring in a cheaper class of people. There are some neighborhoods/districts in & around Phoenix which were built specifically to attract lower income people, and many of those areas are now ridden with crime & blight.

Originally Posted by _Charles_

I have said this many times - falls on deaf ears.
And we still have folks here locally that believe AZ's economy can continue to be dependant on real estate speculation. LOL - "its just a matter of market recovery" they say.

I know exactly what you mean because I have repeatedly stated on this forum for nearly four years that Phoenix's economy can no longer be reliant on things like cheap housing, snowbirds, or the sunny & dry climate. Maybe those things worked well for this metro area decades ago when it was much smaller ... but Phoenix is now the sixth largest city and the 12th largest metro area in the nation. That makes us a pretty big player, and we can't keep trying to cling onto small market ideas and outdated principles. Sunshine and cheap real estate obviously aren't bringing in the large reputable businesses and the higher paying jobs!

You would think that after the huge downturn in the housing market, and how much this area suffered (more than many other cities or regions), we would learn our lessons and start diversifying the economy. But noooo ... there are too many people around here who still think we can prosper just fine on speculation, and what worked well many years ago when we were a relatively small area. As a metro area, we seriously need to grow up.

[khuntrevor]

I don't think you can say for one second, that there was a higher class of people coming, when the median was 250K. That's when all the Riverside rejects moved here, along with a lot of the tattoo/piercing and no degree/money moved in. The (former) union people are uneducated, and completely irresponsible with money and last I heard they were lining up at midnight to fill out apps at the new Cleveland Walmart.

[Valley Native]

Originally Posted by khuntrevor

I don't think you can say for one second, that there was a higher class of people coming, when the median was 250K. That's when all the Riverside rejects moved here, along with a lot of the tattoo/piercing and no degree/money moved in. The (former) union people are uneducated, and completely irresponsible with money and last I heard they were lining up at midnight to fill out apps at the new Cleveland Walmart.

That was during the housing bubble when prices were inflating too fast ... and no, that didn't bring in the high society or the competitive jobs because it was all based on speculation. That's what posters like me and Charles have been trying to get across for a long time: the Phoenix metro area is too reliant on the housing market for its economic base. It's too unstable, and not diversified enough. The way I see it, we need to improve our image and start attracting Fortune 500/1,000 type of firms to locate here that will bring in the successful people & higher paying jobs ... and then the housing market might very well improve & take care of itself.