Home prices still falling: (Phoenix, Mesa: for sale, real estate market, 2013)

[oldtrader]

Home prices expected to fall further in a 3rd wave price decline in Phoenix.

Home price data on 384 markets - CNNMoney.com

[Ponderosa]

Nah. We know better. They are stable in most places and up in quite a few. Inventory is getting to be slim pickin's and the job market is improving. Tax revenues are up, cities are hiring cops, and the state is expected to have a surplus this year. Things are getting better here.

[MN-Born-n-Raised]

Yea. It's dropping like a rock! From http://www.altosresearch.com/research/AZ/phoenix-real-estate-market

Moderator cut: snip

[BestintheWest]

here's a link and a brief snippet to make everyone happy, doesn't look all that good

Home price data on 384 markets - CNNMoney.com

Phoenix-Mesa-Glendale, AZ Metropolitan Statistical Area

Forecast change: second quarter, 2011 – second quarter, 2012
-10.3%
Forecast change: second quarter, 2012 – second quarter, 2013
-4.5%

[Captain Bill]

Originally Posted by oldtrader

Home prices expected to fall further in a 3rd wave price decline in Phoenix.

Home price data on 384 markets - CNNMoney.com

Hello Oldtrader, it's good to hear from again. It's great that you are always eager to help us out in the Phoenix area by providing information about our housing market. However, there may be some problems with this Money report.

Click on the thumbnail below to see the median price graph courtesy of the Cromford Report.

It shows the following for all types in the Phoenix area:

$110,000 median price Jan 2011
$112,000 median price June 2011
$114,000 median price Sep 2011 (an increase during our slow season)

So far this year Phoenix has experienced a median price increase of 3.6%

For the price between now and June 2012 to decline 10.3% we would need to have a decline in Nov and Dec this year, plus a decline during our buying season in 2012. To decline 10.3% from June 2011 to June 2012 the prices would have to drop to $108,300.

Of course anything is possible, but I don't see anything on the horizon that will cause that.

Here is a thread on City-Data that you can read which shows what is actually happening in the Current Phoenix Real Estate Market. You may find some information there that you were not aware of.

[Howard Roark]

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. In 1990 I had an income of $35,000 and qualified for a new house of that price and I caught the bait. It was about two and a half times my income, which was right.

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.

Then when that happens in Coastal California, look out Phoenix. A $600,000 house in Phoenix versus a $500,000 house in Santa Cruz (same square footage) - I wonder which would win?

Originally Posted by oldtrader

Home prices expected to fall further in a 3rd wave price decline in Phoenix.

Home price data on 384 markets - CNNMoney.com

[oldtrader]

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.

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.

The only true guide to the value of a particular home, is a true market value analysis based on three recent close by home sales, that are balanced to show the difference in value between them based on the differences in amenities, size, condition, etc. The same process that a good appraiser uses, to value the home.

An awful lot of people make a bid on a home, that the owner accepts and when the appraiser determines the true value of the home, it is not worth anywhere near what the contract called for and the sale falls apart. When this happens, too many agents and sellers blame a bad a appraisal. Not true in most cases.

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) Appraisals that were being made back in the hey day of the real estate boom, as the banks were not particular as to the quality of the appraisal and instructed the appraisers to make an appraisal that justified the price in the contract, to heck with true value.

[Howard Roark]

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.

So by your statement, it seems since the median prices are going lower, more lower end houses are selling and few higher end houses are selling. So lots of $40,000 2 bedroom condos in shady areas are selling like hotcakes.

I was looking at north Scottsdale on Zillow. A house for sale at $1,200,000 is zillowed at $500,000 (maybe a little higher). Well ten years ago it sold for $467,000. Those high end people are still drinking kool-aid.

OTOH, I checked your original link and noted that prices in California are expected to increase in 2013. So my prediction of high end Phoenix prices being pressured lower might not hold true.

Face it: If you have $20,000,000 in California municipal bonds yielding 3% you are earning a $600,000 annual tax free income and you certainly can afford to pay property taxes on a $1,000,000 coastal view house. That's $10,000 per year. The only reason a multi-millionaire would pick Phoenix is if he has relatives in Phoenix.

[Stokes172]

Zillow?


...out to lunch...

[Ponderosa]

If Zillow is the authority here, then I am happy. My house has gone up over 25K on Zillow since June. Really, though, go look at Bills post earlier today. The real numbers are there and you don't need to use Zestimates.