Is Phoenix really a "seller's market" right now? (Scottsdale: short sales, foreclosures)

[_Charles_]

Addtional information.

[azriverfan.]

Everyone has varying experiences and opinions. Unfortunately, this doesn't really tell you anything. Someone can imply it's a sellers market because their homes have multiple bids. I can tell you the opposite and say I've been watching 40 homes that have not sold and many continue to drop in price and many are priced fairly (not foreclosures or short sales). So who is right?

That is why the best advice is to empower yourself. Do an MLS search yourself. There are websites that offer free access to the MLS such as Real Estate, Homes for Sale, MLS Listings, Real Estate Agents, Houses — Zip Realty. Keep a list of homes and watch them. See if they sell in a week. See if they drop in price. Form your own opinion.

And if you have time, get your own real estate license. It's not that expensive. You will save a lot of money and educate yourself at the same time. There are plenty of schools that offer flexible schedules and course lengths.

[oldtrader]

That approach takes a long time to find what is happening in a city like Phoenix that is in the second part of a double dip housing market. Foreclosures will pick up, in the near time.

What is happening: Houses have depreciated 11.7% over the last 12 months. There are 11650 homes for sale in this location, including 66718 foreclosures.

Moderator cut: link removed, linking to competitor sites is not allowed For current tend graphs.

[azriverfan.]

Originally Posted by oldtrader

That approach takes a long time to find what is happening in a city like Phoenix that is in the second part of a double dip housing market. Foreclosures will pick up, in the near time.

What is happening: Houses have depreciated 11.7% over the last 12 months. There are 11650 homes for sale in this location, including 66718 foreclosures.

Moderator cut: link removed, linking to competitor sites is not allowedFor current tend graphs.

I agree with your take but unfortunately people are not always convinced by statistics. They want to hear personal accounts. If they are going to be skeptical of stats then I suggest they form their own experience. Go to the MLS. Pick out 10-20 homes that meet their criteria and watch them over 6 months to a year. I don't think that's a long time considering the amount of money required to invest in a home.

[azriverfan.]

Originally Posted by khuntrevor

Landlords market, yes--seller's market, no. It's just too hard to get financing and/or the appraisal. A lot of the non-distressed dales are actually fairly recent foreclosures that have been spruced up. With so many costs involved in the transaction and the repair of the foreclosures I think renting to a qualified party is a better move for most. We had one in our neighborhood, where they paid about 40K, and put a lot of work into it...new kitchen and roof/paint, and it saw very little action relisted at 69K, which wouldn't have left much profit for the investments made. Probably could rent rather quickly for 850. The pickins are definitely slimmer at the low end, where many of the cash buyers are.

I would rep you
if I could. Great response!

[oldtrader]

You are right, this is not a good market to try to buy something real cheap, fix it up and try to flip it. Nearly everyone underestimates the cost of the fix up, and as it takes a period of time to do so, they are hit again as the prices continue to fall.

Forbes Magazine and Clear Capital Home Data Index predict these are the worst 10 markets, with the biggest decline expected in 2011.

10 Markets That Will Fall The Most In 2011:

1. Virginia Beach, VA: 12.8% price decrease y/y

2. New Haven, CT: 11.9% price decrease y/y

3. Tucson, AZ: 11.9% price decrease y/y

4. Dayton, OH: 11.7% price decrease y/y

5. Jacksonville, FL: 10.5% price decrease y/y

6. Phoenix, AZ: 9.4% price decrease y/y

7. San Francisco, CA: 9.3% price decrease y/y

8. Detroit, MI: 7.7% price decrease y/y

9. Oklahoma City, OK: 7.6% price decrease y/y

10. Tampa, FL: 7.4% price decrease y/y

Phoenix numbers may even be conservative here as Phoenix is 2nd highest foreclosure city in U.S. Report: Phoenix-Area Foreclosure Rate Remains High (http://tinyurl.com/46z57xk - broken link).

[Montana Griz]

Originally Posted by Captain Bill

Every property that my buyers have made offers on this year have had multiple offers. These are on homes from $70k all the way up to over a million dollar home. We lost some of them. Many of them were above list price.

I've stated many times on the forum that for two years the inventory has been declining and the sales have been increasing. The prices remained flat from Dec 2010 through April 2011. Tomorrow I'll check May prices.

The current overall supply of inventory in the Phoenix valley is 3.5 months. (all types, all prices--it varies with different price ranges and locations)

Recently in Chandler a couple of homes in the $300k range were sold within a week; homes that my buyers wanted to offer on.

Hey Captain Bill, I can appreciate your wanting to spew forth a very "positive picture" regarding the current status of the R.E. market in the Phoenix area. After all, considering that your "Lively-hood" is directly tied to the "ups & downs" in that sector of our nation's economy, I would expect you to view "the glass as being half-full". However, I feel some justification of your position is in order, considering the following:

.....1/ Today's release of the "S&P Case Schiller National Home price Index" showed that out of the 20 Metro Citiy areas in the index, Phoenix was down (8.4%)(it's 8th straight month of decline), 2nd only to Minn, MN whose home value index fell 10%.
This was the 3rd straight quarterly drop for the National Index number. Prices are down 32.7% from same quarter 5 years ago, and are continuing to drop. These numbers have dropped to the lows of 2002. As stated, we are in a Double-Dip R.E. Recession.

I find these numbers and this information in stark contrast to the implication(s) contained in your post...........How about an "understandable explaination".

Moderator cut: rude


2/

[khuntrevor]

I keep tabs on a 1 mile radius from Osborn and N. Central. The low end SFRs are gone, there is one for sale under 50K and it is next door to a residential facility for homeless teens, and close to a trailer park that is actually closing. So there are people scouting the nice central areas for deals, but I see a few others where they just lowered the price by 450,000...was 1.249, now 799K. That's a tremendous reduction. There are clearly soft spots all over the Valley. Buying a home at the bottom for cash is one thing, making a commitment for the next 30 years is a whole different ball game--that could get like wearing a ball and chain--and I don't think you have to go far to find people that are tethered to this area by their underwater investment.

[Jkgourmet]

Originally Posted by khuntrevor

I keep tabs on a 1 mile radius from Osborn and N. Central. The low end SFRs are gone, there is one for sale under 50K and it is next door to a residential facility for homeless teens, and close to a trailer park that is actually closing. So there are people scouting the nice central areas for deals, but I see a few others where they just lowered the price by 450,000...was 1.249, now 799K. That's atremendous reduction.

The amount of a price reduction is irrelevant, useless information unless you are bragging about it at a cocktail bar. Obviously, the sellers priced their house much too high. The question is: what is the market value vs the CURRENT asking price.

[MN-Born-n-Raised]

Originally Posted by Montana Griz

I find these numbers and this information in stark contrast to the implication(s) contained in your post...........How about an "understandable explaination".

Bill posted something in another thread (see 68% of home owners in metro Phoenix have negative equity ). He said that in April of 2009, the 1st time government sponsored buyers program sparked a surge that raised prices to $130K (there was a mini rally). Then it fell under that level down to $111K when all that demand was pulled forward. Over the past several months, it has stabilized.

I will add that several towns are gaining momentum. Let's pick on Phoenix for a moment. See PHOENIX, AZ Real Estate Market Report for May 29 2011

See how the pricing in Phoenix has risen since 3/1/2011???? See how the inventory has dropped??? That's because thousands upon thousands of homes have sold in near record numbers. So Case-Shiller's data is old in a very fast moving (and unstable) market.

Note. He didn't say it was a "sellers market". He said that the inventory went down a lot and he is personally is seeing multiple offers on nearly all of the properties that he is working on.

Everyone has a right to look at two month old Case Shiller information or you can look at the real time data that I gave a link to. So we are clear, I never said it was a "sellers market" either. But IF the inventory continues to decline in any significant amount, the banks will regain confidence to borrow more freely which could spark another small buying frenzy on a lot of underpriced properties. Therefore I could see things turn much quicker than the quoted experts have stated. I will go out on the limb and say that no one has a clue if Phoenix will gain or lose 5-10% over the next 12 months. The "experts" at ARMLS predicted that April, May, and June were going to see a big decline. They got it wrong.

To add one more point. A "sellers market" has a technical definition. It doesn't have anything to do with the fact that someone is selling their home for less than they paid. A "recession" (by definition) doesn't have a technical definition on how you feel. So when you said that we are in a double dip R.E. "recession" you are wrong. Because in many markets the prices have risen over the past two months. Case-Shiller needs to mine their data quicker or they risk becoming a non-factor. I don't bother with what they say because by the time they speak, it's old news already.