145 Houses only?!?! (Phoenix, Mesa, Glendale: bank owned, fit in, short sales)

[whodiman]

According to this article only 145 Single family houses that are not AWC for under 100k in the entire Phoenix area. Is this possible? Can somebody verify this? if this is true then this is a huge turnaround.

http://2ndhomesinarizona.com/2012/02...te-in-phoenix/

[rjrcm]

I don't see how he got to 145. Just looking at the city of Phoenix, I find about 500 single family actives (not AWC) that are not short sales/pre-foreclosure up to $100K. He must have some other qualifiers that are not shown. In the list of cities he covered, there are 865 (Phoenix, Scottsdale, Mesa, Tempe, Chandler, Gilbert, Peoria, Glendale, Avondale, Tolleson, Goodyear, El Mirage and Surprise).

[aliveandwellinSA]

just did the search
shows 6,522 listings found under $100,000

Residential in All Cities

[whodiman]

Originally Posted by aliveandwellinSA

just did the search
shows 6,522 listings found under $100,000

Residential in All Cities

Ya i didn't think this could be true but wasn't sure how close this would be.

Just tried the link provided in this reply. I excluded shorts, foreclosures, approved SS and selected single family. I now get 1028. Much higher than 145 but still much lower than a few years ago.

[observer53]

It's hard to read the screen shot, but it looks like he had the search narrowed by number of bedrooms and bathrooms, and a range of year built. Couldn't read the numbers.

[rjrcm]

Originally Posted by aliveandwellinSA

just did the search
shows 6,522 listings found under $100,000

Residential in All Cities

But you did not qualify the search by the specific cities listed, or exclude short sales and AWCs as indicated in the article.

[rjrcm]

Originally Posted by observer53

It's hard to read the screen shot, but it looks like he had the search narrowed by number of bedrooms and bathrooms, and a range of year built. Couldn't read the numbers.

Right, it looks like 3 bedroom, 1.25 bath, which takes out a couple hundred more. A date range limitation could account for the rest. Seems like a very arbitrary selection.

But as noted, it is still a major reduction from years past.

[oldtrader]

But latest figures show that over 35% of all homes old in the Phoenix area are being sold to speculators (investors), and remember that speculators are what caused over a 50% drop in the price of homes in the Phoenix area, and the real estate meltdown.

[Captain Bill]

Originally Posted by oldtrader

But latest figures show that over 35% of all homes old in the Phoenix area are being sold to speculators (investors), and remember that speculators are what caused over a 50% drop in the price of homes in the Phoenix area, and the real estate meltdown.

That number is about right. However, I think it's about to change.

Investors are only buying distressed homes (short sales and bank owned) because the prices are lower, and they don't mind doing the work required to make the homes move-in or rental-ready.

Today we're seeing an increase in traditional sales, and the traditional sales, being priced higher than distressed sales, are purchased by people who intend to occupy the home. This indicates to me that more regular occupant buyers are entering the market.

In Phoenix Metro, today we have 41% more traditional sale homes in Pending status (under contract in escrow) than we did this time last year.

The difference in todays investor and yesterdays speculator is that today we have investors and not speculators. We have both landlord investors and rehabbers.

The landlord investors are buying to hold and rent long term. Some are even buying a home today for retirement, and renting it out until they are able to retire.

The rehabbers are the group that stopped the decline in prices, cleaned up the blighted homes, and stabilized our market. It was not uncommon to see several homes on a block having weeds grown up 3 feet tall because sellers had abandoned them, and when banks took them over, they weren't cleaning them up.

It was only after the HOA's began issuing violation fines to the banks, and they kept piling up, and the banks learned that those fines were a lien and they could not sell the house until they were paid, that they wised up and realized they needed to clean those yards up.

The rehabbers who bought the houses took care of the yards first, and then got the house back in shape.

The speculators during the boom were just that, speculators. They didn't know anything about investing. They bought expecting to flip at a quick profit in a few months as the prices increased.

Eventually, if the rental market gets saturated, then the landlords may lower the rent to compete, or sell their home. However, many of these homes are being bought for cash, so the landlord is getting a good return and can afford to lower the rent if necessary. All of the landlord investors I work with are looking at a minimum holding time of 5-10 years.

I think the demand for housing will continue to grow in the Phoenix area. That's due to the migration to the sun by retirees; job transferees; the huge number of retiring boomers during the coming years, and the people who lost their homes will be buying again after their credit is improved.

[whodiman]

Originally Posted by Captain Bill

The landlord investors are buying to hold and rent long term. Some are even buying a home today for retirement, and renting it out until they are able to retire.

Eventually, if the rental market gets saturated, then the landlords may lower the rent to compete, or sell their home. However, many of these homes are being bought for cash, so the landlord is getting a good return and can afford to lower the rent if necessary. All of the landlord investors I work with are looking at a minimum holding time of 5-10 years.

.

Just to add to this point it is quite amazing how many people around me have decided they want a part of Phoenix real estate now. They didn't dare touch it last year or the year before when it was cheaper and easier to buy. It's funny how this mentality is the same with stock market. People didn't touch it when it was low late 2008/early 2009 but after it had come back 30% by 2010 that's when the buying occured again.

As for long term buy and hold, Canadians can only finance one home. After that it's all cash. In Canada cap rates are usually around 3-5% so if you don't pay cash you can't even cash flow your property. In Phoenix you can finance your property and still cashflow it so even with a $200/mth rent decrease properties are still cashflow positive. If they paid cash they aren't worried at all. This is why this is so attractive to foreigners (not just Canadians).