U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > U.S. Forums > Arizona > Phoenix area
 [Register]
Please register to participate in our discussions with 1.5 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.
Jump to a detailed profile or search
site with Google Custom Search

Search Forums  (Advanced)
Business Search - 14 Million verified businesses
Search for:  near: 
Reply Start New Thread
 
Old 11-01-2011, 08:05 PM
 
2,879 posts, read 4,001,858 times
Reputation: 1088
A lot of those condos became shady as a result of easy lending standards and zero down loans--not the housing market crash. I've seen quite a few that are getting better, as there is more stable ownership, and landlords can actually afford repairs without a mortgage. The 40K you mention is mostly a result of no banks willing to loan.
Reply With Quote Quick reply to this message

 
Old 11-01-2011, 08:08 PM
 
2,879 posts, read 4,001,858 times
Reputation: 1088
Zillow is so bad that the Arizona Appraisers association sought a court order to stop them from letting the public use their software back in 2006. They must have been getting nervous. My Zillow was up 9900 in the last 30 days, and I only paid 18,500. Must have been that bucket of tan paint.
Reply With Quote Quick reply to this message
 
Old 11-02-2011, 03:36 AM
 
50 posts, read 38,678 times
Reputation: 60
I live in downtown Phoenix in a condo. I won't say which one, but it's a pretty small complex. We actually had a unit sell last April/May where the seller made a respectable profit. I am going to be selling my unit here and move out of state soon for a new job.

The pricing is all about the local area. Here, we've been very stable. Our community was finished just after the bust and the builder had to lower prices substantially. We are now 100% sold, but we have our first short-sale coming up here, which is going to **** on the local comparable.

It's not an issue of price here. It's an issue of buyer volume, which is really low. The problem is jobs. Jobs jobs jobs jobs jobs jobs. When hiring comes back, everything gets fixed... slowly.

As for Zillow, it's a really good service and I will definitely list my condo there. The Real estate industry hates zillow because it cuts out the unnecessary middle-men. Their estimates service is a wild guess, but when you understand the local conditions which are causing the valuation, then you get insight into the future potential value of the home.
Reply With Quote Quick reply to this message
 
Old 11-02-2011, 05:29 AM
 
3,734 posts, read 3,111,486 times
Reputation: 2597
Quote:
Originally Posted by oldtrader View Post
What I learned in a University Real Estate Economics class.

Median price, means half the homes sold, are above the median price and half are below. It was created a few years ago, to often hide the true market price trends, as a marketing tool for real estate in an attempt to maintain market prices.
Only suspicious, conspiracy-type people think that a median price of something was created recently is a "marketing tool". Your "University Real Estate Economics" class let you down. The question that needs to be asked is when the median price of homes were dropping like a ROCK from 2007-2009, were those used to "hide the true market trend"?? We agree that the data can be skewed based off of what price range homes are selling. Median price is just one statistic to look at. Price per sq foot also has it's strengths and weaknesses.

Quote:
Originally Posted by oldtrader View Post
If an extra few higher priced homes sell and or few lower priced homes sell, the median price goes up, even though prices may actually be declining at the time. This gives the mistaken impression that home prices are rising. This happens, because it moves the median to the higher side of the scale. This often happens when the market starts to slow down.
Well yea! It can go the other way as well (a bunch of lower homes get sold and no higher priced homes sell). But statistical outliers get washed out to a certain degree when there are 9800 homes sold in a month. THOUSANDS of homes are selling per month in the Valley. This market isn't Big Timber Montana where one sale is going to skew the data.

Quote:
Originally Posted by oldtrader View Post
Since the banking fiasco, the appraisers have really tightened up their appraisals to be true value appraisals, and not the sloppy ones called MAI (Made As Instructed) .[/b]
I think you have retired too long and now don't understand this market. If you or I were going to borrow someone money for a home, we would want to mitigate our risk and have very conservative values. That's logical and that is what is happening. So you are selling your home with multizone audio, an electronic dog invisible fence, a built in theater, central vac, or a several other added jewelry, don't expect that appraiser to care. Add no, it didn't show up as a higher per sq foot charge.

In today's market, the appraisers will call that "buyers preferences". I got an appraisal on my place to see what it is worth before I sell it. I'm pulling out all of this gear because it didn't (and won't) show up as a value. It no longer matters what the buyer think it is worth which in theory defines market value). It now matters what a bank will loan. And any RE professional who isn't retired knows this. When the volatility is out of the market, appraisers will again value "the jewelry" because that is why the person offered more for the home.

Oldtrader. You believe what you want to believe. It would be like me telling you what the Montana housing market is doing because I read an article. Some Valley areas are going up in value while others are going down. For that matter, different things are happening at different price points.

An example of prices going UP (see http://www.altosresearch.com/researc...-estate-market)

An example of sideways (see http://www.altosresearch.com/researc...-estate-market )

and here is an example of down (see http://www.altosresearch.com/researc...-estate-market )

Last edited by MN-Born-n-Raised; 11-02-2011 at 05:46 AM..
Reply With Quote Quick reply to this message
 
Old 11-02-2011, 07:35 AM
 
Location: Gilbert - Val Vista Lakes
6,066 posts, read 8,158,885 times
Reputation: 3666
Quote:
Originally Posted by Howard Roark View Post
Yup! I think this refers to the higher end houses. For instance the Phoenix prices are predicted to fall by 10% Y-O-Y to first quarter of 2012 and another 4% the next year. But the median price in Phoenix is $99,000. ...
Howard, the article was about median prices in the Phoenix Metro Area. We need do distinguish between the Phoenix Metro Area and the city of Phoenix so as to not be confusing.

The median price in Phoenix Metro is as I posted above:
  • $110,000 median price Jan 2011
  • $112,000 median price June 2011
  • $114,000 median price Sep 2011 (an increase during our slow season)

The median price in the City of Phoenix is as follows:
  • $87,000 median price Jan 2011
  • $83,000 median price Aug 2011
  • $92,000 median price Sept 2011 (an increase of 5.7% year to date)

Quote:
quote=Howard Roark...The problem that the local real estate cheerleaders miss is that the higher end house prices will be coming down and that will force the lower end median to fall further, albeit not as fast a rate...
Everyone knows that the higher end is not selling fast, and for several reasons:
  • Financing is difficult to get
  • There are fewer buyers who can afford homes from $500k to over $3mil.
  • Lack of confidence in the market
  • Waiting for prices to lower in those ranges
Below is a thumbnail chart which I have posted on C-D before to show the Inventory for All Price Ranges Valley Wide. The chart is courtesy of the Cromford Report, which by the way is the best source for the Phoenix Metro Area Real Estate Statistics.

Note that the $400-$500k range is a balanced market of 6-months supply. Below that range the inventory is less and the sales are much higher. Above that range the inventory is higher and the sales are fewer.

It is correct that when there is a price range that has a supply of inventory above 6 months that the prices are "most likely" to be negotiated down. I say "most likely" because some of the homes may be priced at the market, and it just takes longer to sell because fewer buyers exist in that range.

Your hypothesis that upper level price declines will force lower level price declines is flawed, and not supported by any data that's available. If I'm missing some data that supports your theory, please post it.

Supply and demand will continue to drive the market
. As the lower level supply keeps declining and the buyers keep increasing, then the lower level prices will increase. It's more likely that price increases in the lower level will have a cascading effect of supporting and pushing prices up from the lower levels.

At some point, because prices are too low, there will be more buyers in the higher price ranges that will begin to buy, and those prices will also begin to increase.

As I pointed out in this Real Estate Update thread, 25 Cities in the Metro area have an "Own or Rent" ratio from 5 at Florence to 15.8 at Fountain Hills.
  • Ratio of 1-15: Owning less expensive than Renting
  • Ration 16- 20: Renting makes more sense but buying may make sense depending on the circumstances
  • Over 20: Renting less expensive than buying.
Just to mention two cities:
Gilbert ratio is 10.8 (buying is less expensive than renting)
Suprise ratio is 10.1 (buying is less expensive than renting)

So eventually some of these renters will realize it's cheaper to own (based on that Own to Rent data, which was compiled by Gran Canyon Title Agency)
Attached Thumbnails
Home prices still falling:-inventory.jpg  
Reply With Quote Quick reply to this message
 
Old 11-02-2011, 08:01 AM
 
Location: Gilbert - Val Vista Lakes
6,066 posts, read 8,158,885 times
Reputation: 3666
Quote:
Originally Posted by oldtrader View Post
What I learned in a University Real Estate Economics class.

Median price, means half the homes sold, are above the median price and half are below.
You learned well. That is exactly correct


Quote:
quote=oldtraderIt was created a few years ago, to often hide the true market price trends, as a marketing tool for real estate in an attempt to maintain market prices.
I'll accept that as a "personal opinion" until I see some proof.

It is correct that where we have a extraordinarily high number of lender owned sales on the low end $150k and below, that this will skew the numbers some.

However, every media printing data utilize the Median Price, therefore it's necessary to use that to compare.

In our case where we have so many low price lender owned homes, the price per square foot is a "closer" but not perfect measure.

Below is a thumbnail chart Courtesy of the Cromford Report that shows the Price per Square Foot for All Types in the Phoenix Metro Area.

The best use for price per square foot is in working with comps for a particular house.

In the chart below you'll find:

$82.75 Jan 2011
$84.06 June 2011 at the peak of our buying season
$79.01 Aug 2011 declining into our slow season
$81.33 Sept 2011 an unusual increase in our slow season
Attached Thumbnails
Home prices still falling:-11-2-2011-6-50-12  
Reply With Quote Quick reply to this message
 
Old 11-02-2011, 08:02 AM
 
254 posts, read 265,979 times
Reputation: 167
Quote:
Originally Posted by oldtrader View Post
Median price, means half the homes sold, are above the median price and half are below. It was created a few years ago, to often hide the true market price trends, as a marketing tool for real estate in an attempt to maintain market prices.

If an extra few higher priced homes sell and or few lower priced homes sell, the median price goes up, even though prices may actually be declining at the time. This gives the mistaken impression that home prices are rising. This happens, because it moves the median to the higher side of the scale. This often happens when the market starts to slow down.

The median price saying homes are increasing in value, is a very poor guide of what the true market value for a particular home is. It is often erroneous.
Your definition of median is right, but your explanation of median is wrong.

Your example above actually demonstrates the reason to use median. An extra few higher/lower priced home will tend NOT to move the median as much as the average (mean), in a single nodal statistic distribution. The median is better at discounting outlying extremers in this case, thus giving you a less skewed answer.

The median is NEVER erroneous. It is clearly defined. Whether it can be used to predict home value trend is debatable.
Reply With Quote Quick reply to this message
 
Old 11-02-2011, 09:15 AM
 
3,734 posts, read 3,111,486 times
Reputation: 2597
Quote:
Originally Posted by Home Addict View Post

The median is NEVER erroneous. It is clearly defined. Whether it can be used to predict home value trend is debatable.
Bingo! If you want to believe that values are dropping but the median values in specific towns are going up, then you say that it is a real estate "marketing tool". But if the median values are going down in some areas of the Valley (as in Fountain Hills), then I suppose it's o.k. to use median values.
Reply With Quote Quick reply to this message
 
Old 11-02-2011, 09:26 AM
 
Location: Gilbert - Val Vista Lakes
6,066 posts, read 8,158,885 times
Reputation: 3666
Quote:
Originally Posted by Howard Roark View Post
OldTrader, well according to Zillow, Phoenix median prices are now $99,000 and they've been steadily falling. I recall a local poster two years ago saying the $119,000 median price was the bottom.
...
Let's be more specific because here you're inadvertently mixing the City of Phoenix number with the Phoenix Metro Area number.

  • Your 99,000 is for the City of Phoenix,
  • Your $119,000 is for the entire Phoenix Metro Area

Below is another thumbnail chart of long term prices, Courtesy of the Cromford Report.

Phoenix Metro Area Median Prices

  • $115,000 April 2009 (Bottom as called by the Cromford Report)
  • $115,000 October 19, 2011

The market tried to recover from the $115,000 bottom, and the first time home buyer tax credit took the prices up to $130,000 by May of 2010.

The first time buyer tax credit was ending, so the market dropped back down to $109,000 by Feb 2010. Some termed that a double bottom.

Since then the prices have increased back up to $115,000 as of October 19, 2011.

Looking at the chart, with the peaks and valleys caused by the first time home buyer tax credit coming and going, the Phoenix Metro Area Median Price has essentially remained FLAT for 30 months.

With all the facts and stats I've listed in the thread Phoenix Market Update , I believe we will see record sales again during the first half of 2012, along with higher prices.
Attached Thumbnails
Home prices still falling:-2-price.png  
Reply With Quote Quick reply to this message
 
Old 11-02-2011, 09:29 AM
 
Location: Sonoran Desert
16,894 posts, read 19,959,238 times
Reputation: 8830
Quote:
Originally Posted by MN-Born-n-Raised View Post
Bingo! If you want to believe that values are dropping but the median values in specific towns are going up, then you say that it is a real estate "marketing tool". But if the median values are going down in some areas of the Valley (as in Fountain Hills), then I suppose it's o.k. to use median values.
Medians and means given without knowledge of the other measures that describe the distribution are virtually worthless to anyone who understands stat. They are widely misused by both sides of an argument. That is why fresh, raw data like Cpt Bill presented in his post or what one can find in the Cromford report are far, far more useful in recognizing and predicting trends in the local real estate market. The other thing that you hit the mark with is that real estate is local - more so of late than probably ever. We all know that even within individual cities of the valley the types of neighborhoods and the prices of home can vary quite significantly. You simply can't take predictions rolled up in a national summary like the OP linked seriously. Again, seek out the data. The data are clear. At this time, prices in most areas are up and the leading indicators of price direction point to further strengthening in most Phoenix area markets. It's simply inescapable.
Reply With Quote Quick reply to this message
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.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:


Options
X
Data:
Loading data...
Based on 2000-2011 data
Loading data...

123
Hide US histogram

Over $84,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > U.S. Forums > Arizona > Phoenix area
Similar Threads

All times are GMT -6.

2005-2014, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25 - Top