68% of home owners in metro Phoenix have negative equity (Maricopa: short sales, 2014)

[seattlecoming]

Zillow: Phoenix home prices decline, 68 percent underwater | Arizona State News.Net

No surprises when I read this. But hey, it's a dry recession!

[amatrine]

The only ones not under water:

1. People who owned them out flat.

2. People who are buying low now. ( many who walked away from their
homes , then got one cheaper.

The rate of 68 percent will eventually go lower when enough people walk.
That I believe is how the housing prices will adjust to offset inflation .


My house is worth less than half what I paid. In fact 1/3. Yet here I sit because my mortgage is still cheaper than rent. ( stuck in a horrible neighborhood now too) If I walk, I will have to pay twice what I do in rent for a good neighborhood. Can not afford that.

I fear though, that in the future, the values will go so low, that they will increase property taxes so high to offset it, that I will no longer be able to afford the home I now have since I am paying from when the prices were high. ....This will in time FORCE me out of my home. What a mess.

[khuntrevor]

It's 80% in LV. That just says there are lots of buying opportunities. As far as those underwater, they would have been better off mailing in the keys 3 or 4 years ago. A new FHA loan would be right around the corner for them. Lots of renters out there, and as a result, rents are only about 20% below their highs.

[Captain Bill]

The numbers in the article are for the last quarter of 2010, even though the article was apparently published on May 9, 2011, the middle of the 2nd quarter.

Here are the monthly median sale price numbers for the metro area, all types: (includes all of ARMLS including Pinal County)

• 110,050 Dec 2010
• 110,000 Jan 2011
• 109,000 Feb 2011
• 110,000 Mar 2011
• 111,000 Apr 2011
• 111,900 Week 18 in May 2011

So the metro area has seen a slight median price increase since Dec 2010.

Maricopa County median price has remained flat.

• $115,000 Dec 2010 through April 2011

The number of foreclosures has averaged around 4,000 residential foreclosures per month for the last three years, while the number of buyers at the auction has increased.

The inventory of REO properties is declining because more homes are sold at auction and fewer are going back to the banks.

Every one agrees that short sales and REO's have had a negative impact on home prices.

• $149,000 median price in Maricopa County for a regular sale home
• $85,200 median price for REO's.

So, here is a question that was posed by Tom Ruff on The Cromford Report (where I get my stats)

What happens to the median home price when the distressed inventory disappears?

[Ponderosa]

Originally Posted by Captain Bill

The numbers in the article are for the last quarter of 2010, even though the article was apparently published on May 9, 2011, the middle of the 2nd quarter.

Here are the monthly median sale price numbers for the metro area, all types: (includes all of ARMLS including Pinal County)

• 110,050 Dec 2010
• 110,000 Jan 2011
• 109,000 Feb 2011
• 110,000 Mar 2011
• 111,000 Apr 2011
• 111,900 Week 18 in May 2011

So the metro area has seen a slight median price increase since Dec 2010.

Maricopa County median price has remained flat.

• $115,000 Dec 2010 through April 2011

The number of foreclosures has averaged around 4,000 residential foreclosures per month for the last three years, while the number of buyers at the auction has increased.

The inventory of REO properties is declining because more homes are sold at auction and fewer are going back to the banks.

Every one agrees that short sales and REO's have had a negative impact on home prices.

• $149,000 median price in Maricopa County for a regular sale home
• $85,200 median price for REO's.

So, here is a question that was posed by Tom Ruff on The Cromford Report (where I get my stats)

A thousand dollars one way or the other does not make a big difference in how many are under water. As for what will happen when foreclosures disappear: prices will shoot up very quickly by 20% or more on the median. The question though is what will happen IF foreclosures dry up. With so many underwater the only way to sell a house anymore if you need to is to "sell" it to the lender. So it is possible that the foreclosures will meet tepid demand for many months to come. The only way out of the woods is growth in population. That depends on economic recovery in the areas that send migrants to Phoenix like the midwest and, especially, California. We need to be paying as much attention to what is happening there as here.

[Ponderosa]

Originally Posted by amatrine

The only ones not under water:

1. People who owned them out flat.

2. People who are buying low now. ( many who walked away from their
homes , then got one cheaper.

The rate of 68 percent will eventually go lower when enough people walk.
That I believe is how the housing prices will adjust to offset inflation .


My house is worth less than half what I paid. In fact 1/3. Yet here I sit because my mortgage is still cheaper than rent. ( stuck in a horrible neighborhood now too) If I walk, I will have to pay twice what I do in rent for a good neighborhood. Can not afford that.

I fear though, that in the future, the values will go so low, that they will increase property taxes so high to offset it, that I will no longer be able to afford the home I now have since I am paying from when the prices were high. ....This will in time FORCE me out of my home. What a mess.

You bring up a really interesting point. I have been house-hunting with a friend the past couple weeks. I was stunned to learn that it costs a little more than half as much to buy a comparable home as it does to rent one. We are talking hundreds of dollars difference per month! A good-shape 2000 sf foreclosure in my area can be had for about 800 per month mortgage and rents for about 1300-1500. That's a lot of money in the bank on buying versus renting. You would think people would be standing in line to buy.

[artvandelay]

Originally Posted by Ponderosa

You bring up a really interesting point. I have been house-hunting with a friend the past couple weeks. I was stunned to learn that it costs a little more than half as much to buy a comparable home as it does to rent one. We are talking hundreds of dollars difference per month! A good-shape 2000 sf foreclosure in my area can be had for about 800 per month mortgage and rents for about 1300-1500. That's a lot of money in the bank on buying versus renting. You would think people would be standing in line to buy.

Lots of people, like myself, cannot get in line for about 2 more years. We did a strategic short-sale without any late or missed payments, and have to rent for 2-3 years. I am confident that around 2014, I will have plenty to choose from at 1/2 the price of my 2006 purchase.

[seattlecoming]

Originally Posted by Ponderosa

You bring up a really interesting point. I have been house-hunting with a friend the past couple weeks. I was stunned to learn that it costs a little more than half as much to buy a comparable home as it does to rent one. We are talking hundreds of dollars difference per month! A good-shape 2000 sf foreclosure in my area can be had for about 800 per month mortgage and rents for about 1300-1500. That's a lot of money in the bank on buying versus renting. You would think people would be standing in line to buy.

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?

[Captain Bill]

68% of homeowners may have negative equity, but 100% of the 68% are not going to shortsell their home.

Some will do strategic short sales, and some will do a short sale, some will go to foreclosures. But many others have no intention of selling.

My primary residence has negative equity, but I have no intention of selling it.

How many of them will put their home on the market is an unknown, but there are many, including me, who plan to stay put.

[wuds]

Originally Posted by amatrine

The only ones not under water:

1. People who owned them out flat.

2. People who are buying low now. ( many who walked away from their
homes , then got one cheaper.

3. people who have owned their home for many, many years. still with a mortgage, and still with positive equity.