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: 
 
Old 01-21-2012, 08:51 AM
 
254 posts, read 266,722 times
Reputation: 167
When the housing recovery starts and gain steam, other industries less affected by the downturn (like food, consumer staples, etc.) maybe way out of recovery. The Fed may have to act fast to counter these inflationary pressures.

A gutsy move for the Fed would be to start a slow interest rate rise by middle/end of 2012, if majority of metros have stable housing markets by then. This would be a boost to housing because people will see this as an encouraging sign that the Fed believes the worst is over and the economy is improving.

The following are 3 examples of rapid interest rate change, all within one year:
Feb 1994 - Feb 1995: 3.25% to 6%
Jan 2001 - Nov 2001: 6.00% to 1.75%
Dec 2007 - Dec 2008: 4.25% to 0.25%
Quick reply to this message

 
Old 01-21-2012, 09:02 AM
 
Location: Sonoran Desert
16,928 posts, read 20,008,569 times
Reputation: 8860
Quote:
Originally Posted by Home Addict View Post
When the housing recovery starts and gain steam, other industries less affected by the downturn (like food, consumer staples, etc.) maybe way out of recovery. The Fed may have to act fast to counter these inflationary pressures.

A gutsy move for the Fed would be to start a slow interest rate rise by middle/end of 2012, if majority of metros have stable housing markets by then. This would be a boost to housing because people will see this as an encouraging sign that the Fed believes the worst is over and the economy is improving.

The following are 3 examples of rapid interest rate change, all within one year:
Feb 1994 - Feb 1995: 3.25% to 6%
Jan 2001 - Nov 2001: 6.00% to 1.75%
Dec 2007 - Dec 2008: 4.25% to 0.25%
The housing picture is not as rosy in most metros as it is here. In fact, I think PHX was the ONLY metro to have a price increase in the last quarter. This is not good news for Phoenix as we need to have in-migration to sustain any recovery. If people in other parts of the US can't sell, they can't move. Our green shoots will wither in a hurry if the larger market does not improve.
Quick reply to this message
 
Old 01-21-2012, 09:20 AM
 
254 posts, read 266,722 times
Reputation: 167
Good point.

I say that because my favorite "Two BBQ items over rice" lunch plate went from 6.50 to 7.99 in a little over 3 years. And we are supposed to be in a downturn...
Quick reply to this message
 
Old 01-21-2012, 09:33 AM
 
1,232 posts, read 1,388,973 times
Reputation: 629
I wonder how much the recovery is slowed by the people that list their homes too high. I think most people didn't really know how far things fell in the past 5 years. They know they fell to pre-2005-mania but not back to 2000 levels. I'm seeing a lot of homes list high then drop their prices within a month. Then again with another month. Maybe that's the norm, not sure.
Quick reply to this message
 
Old 01-21-2012, 09:45 AM
 
Location: Sonoran Desert
16,928 posts, read 20,008,569 times
Reputation: 8860
Quote:
Originally Posted by ReadyFreddy View Post
I wonder how much the recovery is slowed by the people that list their homes too high. I think most people didn't really know how far things fell in the past 5 years. They know they fell to pre-2005-mania but not back to 2000 levels. I'm seeing a lot of homes list high then drop their prices within a month. Then again with another month. Maybe that's the norm, not sure.
Price reductions have become so common that maybe buyers expect that. It won't sell unless there is a "Price Reduced" tag on the sign. While the inventory is decidedly down, I still don't see anything like a price increase. 2-3% is sample variance and not a new mean, I don't believe. I would like to think the "law" of supply and demand is really a law, but it just doesn't seem to be at work at the moment.
Quick reply to this message
 
Old 01-22-2012, 07:22 AM
 
Location: Gilbert - Val Vista Lakes
6,066 posts, read 8,175,474 times
Reputation: 3666
Quote:
Quote by Ponderosa.....Price reductions have become so common that maybe buyers expect that. It won't sell unless there is a "Price Reduced" tag on the sign. While the inventory is decidedly down, I still don't see anything like a price increase. 2-3% is sample variance and not a new mean, I don't believe. I would like to think the "law" of supply and demand is really a law, but it just doesn't seem to be at work at the moment.
In looking at the price chart below (courtesy of the Cromford Report) the price change from Jan of $81.62 to $83.63 in Dec is small. However, it is the first year over year increase that we've had.

What is even more significant, in my opinion, is the increase we experienced during the slow months, from a low of $79.65 to $83.63 by years end.

Right now it appears that sale prices are in a lull in January. However, the AWC and Pending sales are indicating that prices will show an increase during the next two months. We normally don't place a lot of emphasis on list prices because they typically reflect the sellers desires rather than a relationship to the current market value.

However, in a stabilized market where there is a supply shortage with some price increases, the increased list prices are the result of sellers understanding that there is less selling competition out there so they are willing to ask more for their home.

We're seeing that increase in list prices now.


The Cromford Reports show that Phoenix Metro REO's list pricing is up 6.8% to $96.45 last month. The reason is mostly because of the decline in the number of cheaper lender owned homes, leaving the more expensive ones.
  • Short sale list pricing is up 1.7%
  • Traditional list pricing is up only 0.5%.
When the supply is so low, there is sufficient reason for sellers to begin their asking prices somewhat higher. Banks are certainly doing that, and while the short sale prices were typically higher than REO's, that has changed to where, in most areas, the average REO is priced higher and selling higher than Short Sales.

The Cromford Report shows the distress market by cities and zip codes. Here is an example using zip code 85234 and the Town of Gilbert:


Below is pricing from the entire Town of Gilbert

.................................Aver List Price/sf................Aver Sale Price/sf
Traditional Sale
............115.55................................ ....96.95
Short Sale......................83.58....................... ..............80.21
REO................................89.59............. ........................83.98


Below is pricing from zip code 85234 in Gilbert

.................................Aver List Price/sf................Aver Sale Price/sf
Traditional Sale
...........121.28................................. ...100.26
Short Sale......................80.54....................... ..............89.97
REO................................89.01............. .......................79.62

Note that in Gilbert's zip code 85234 the short sales are selling far above the list prices, whereas the REO's are selling far below the list price.

The REO's that are selling far below list
is probably due to those that are left on the market being in bad condition, in need of a lot of repairs, and therefore overpriced.

The Short Sales that are selling above list price is probably because they are in better condition than the REO's, and they're receiving multiple offers.

38.46% of sales in Gilbert are Traditional Sales
36.92% are Short Sales
24.62% are REO's.

In the Town of Gilbert, today there are only 63 REO's Active on the market. They're priced from $65,000 to $499,000.

There are only 115 Short Sales, priced from $65,000 to a 10,700 square foot bungalow on 2.27 acres for $1,950,000.

That's my kind of house. I think anything over 11,000 foot is just wasted space
Quick reply to this message
 
Old 01-22-2012, 06:41 PM
 
821 posts, read 433,269 times
Reputation: 700
How are current prices in comparison to April 2011? That's when I got my BPO for 140k and my house is in Deer Valley. Higher, lower or same now? Thanks for any ideas. On Trulia, Deer Valley lost about 10% year-over-year, which is not really what I hear in this thread.
Quick reply to this message
 
Old 01-23-2012, 07:42 AM
 
Location: Gilbert - Val Vista Lakes
6,066 posts, read 8,175,474 times
Reputation: 3666
Quote:
Originally Posted by Potential_Landlord View Post
How are current prices in comparison to April 2011? That's when I got my BPO for 140k and my house is in Deer Valley. Higher, lower or same now? Thanks for any ideas. On Trulia, Deer Valley lost about 10% year-over-year, which is not really what I hear in this thread.
There's a chart at the bottom of this post:
http://www.city-data.com/forum/21711004-post75.html
It is price per square foot for all type residential in Phoenix Metro.
Quick reply to this message
 
Old 01-29-2012, 06:44 AM
 
Location: Gilbert - Val Vista Lakes
6,066 posts, read 8,175,474 times
Reputation: 3666
Information in the Cromford Report is showing the January total sales are going to be lower than in December. We'll hit very close to 7,000 sales, whereas in December there were 7,600.

While demand is still strong, I believe the decline in sales volume is due to the drastic reduction in REO's and Short Sale properties. With the shortage in these properties, it's taking investors, and others looking for those homes longer to find one.

My investors are running into this, and it's taking them much longer to find a home. One investor made offers on two homes during the past few days for cash, over the listed price, and was out bid on both. One had 7 offers on the first day.

The agent for the other property didn't even respond to our offer. When the deadline for the sellers response passed, I called the agent, and he said that they were going to review all offers in two days. (They didn't care about our deadline to respond) That's very unprofessional conduct, which seems to be not unusual in this area.

Days Inventory is at 92 days, which is now at the level it was in early 2004. The Days Inventory even includes the AWC listings (under contract with a contingency)

The total count of REO's is 8,859
, with approximately 4,000 being unlisted. It takes a couple months to get one listed after foreclosure, so there are probably around 2,000 that are in the "held back" stage, with the other 2.000 being prepared for market.

Notices of Foreclosure (NOTS) are continuing to decline:

10,700 Notices February 2008
3,519 Notices December 2011

The Pending sales have increased from 9,468 in the first week of Jan to 10,764 currently. That's an indication of higher sales volume next month, and the Cromford Report states that they anticipate seeing a higher price per square foot during the next couple of months.

If the decline in sales volume is due to REO and Short Sale buyers taking longer to find a property, and if that distressed inventory continues to decline, then it will have some affect on the market.

Investors recognize that all property today is still at bargain prices. Therefore, if they choose to remain in the market, they will of necessity, be setting their sights higher, and probably shifting to traditional homes that are in move in condition. While they may pay a higher up front price, their cost to get rent ready is greatly reduced.

It will mean that everyone who is looking at the sub $150k homes will be setting their sights higher, realizing that they will have to pay more up front for a home.

Those are possible scenarios that could be played out.

Looking at the negative side of it, there is the possibility that investors could just drop out, and the regular buyers of sub $150k homes will also drop out. However, when I continue to see homes with 8 offers on the first day on the market, I think this is the least likely scenario.
Quick reply to this message
 
Old 01-29-2012, 07:44 AM
 
Location: In an alternate universe according to some, AKA Aspergers
10,569 posts, read 11,494,772 times
Reputation: 4970
Capt, let me add my recent (the last month) "on the ground" experiences. We'd sold our current house and started looking for another elsewhere. When we couldn't find anything we were forced to try and find a replacement here in AZ so we started a search of the entire west valley including Buckeye. When we bought our current house 1 1/2 yrs ago) you didn't have to leave a subdivision to see dozens of houses that were available at real low prices and there were hundreds all over the area.
Fast forward to now where we've still been seeing plenty of for sale signs so we figured we'd not have too much problem finding what we need.
Well, many of those for sale signs are on houses that are NOT for sale anymore for one reason or another, either pending or sold. Inventory is way down from my perspective.

We've noticed that the REO's we've looked at are priced 10 to 15k higher than before and the "fix and flips" are pricing higher as well. We also noticed when out looking yesterday that we're being followed by at least 2 other groups of people looking at the same houses we were. Heck, there was one we were touring and a family walked up and asked our agent if they could look at it since they just noticed it was back on the market after falling out of escrow. I've got a feeling it'll be gone today or tomorrow.
Now there's still plenty of short sales out there BUT we all know those can take forever to close if they ever do and even if pre-approved for short sale there's no certainty that the bank really will accept the listed price.
From what we've seen this is now strictly an investors/renters market. By that I mean people who are in no real hurry, can afford to bid on houses and await the outcome either good or bad. Those people can still get some good deals.
I definitely think the bottom has been hit and is trying to rise, the problem now is buyers need to realize that the "fire sale" days are pretty much done at least in the sub $150k range.
With that being said there are some deals out there compared to what they sold for originally or even 4 years ago but the pricing of 1 1/2 -2 years ago seems to have dried up except on the way out fringes and for lesser quality properties.
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.


 
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

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