Phoenix Real Estate Market Keeps Tanking (Surprise: pools, work, single)
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Location: In an alternate universe according to some
8,465 posts, read 8,618,022 times
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Quote:
Originally Posted by evrluv
I agree with that saying and would rather take my time, but prices are moving up so fast. I'm concerned that what I can afford today will be out of my reach in 6 months. I wonder if or when the housing market here will level out and prices will stop jumping up so quickly. Does anyone have an educated guess?
I'd suggest looking in the "outlying" areas. In the 85355 zip it seems $50-51 sqft is still possible for a nice property.
That's the position I took and then the bottom fell out of the market They will level out when the prices come back to a normal level (equivalent to other cities of our size and amenities). Phoenix was undervalued for a VERY long time and that 'gold rush' with prices really put the exclamation point on that idea! Once investors stop flooding the market with cash, prices and sales will level out. I would think between $120 and $140 per square foot would be a 'normal' level in the city limits. In the suburbs, I don't know because I never had any interest in suburbs so I can't guess.
Here's my thinking for an average standard house in the city of average age, quality etc. Do you think that's realistic: 80/sf building, 40k for lot including sidewalk, utility lines tec. and average landscaping. This should lead to the 120-140/sf you mentioned. Seems realistic to me and that is also the value-approach like by Warren Buffett.
Here's my thinking for an average standard house in the city of average age, quality etc. Do you think that's realistic: 80/sf building, 40k for lot including sidewalk, utility lines tec. and average landscaping. This should lead to the 120-140/sf you mentioned. Seems realistic to me and that is also the value-approach like by Warren Buffett.
Yes, that's a good goal in the suburbs... central city areas, probably not. As others have said, keep the area you are looking in broad. It will help because there will be more to choose from quickly. I also don't think you'll be priced out so quickly because there is ALWAYS a home that is below market value for sale. My condo actually was selling quite lower than what other people were paying for and it's really close to the downtown PHX area...
Here's my thinking for an average standard house in the city of average age, quality etc. Do you think that's realistic: 80/sf building, 40k for lot including sidewalk, utility lines tec. and average landscaping. This should lead to the 120-140/sf you mentioned. Seems realistic to me and that is also the value-approach like by Warren Buffett.
Where's the ~$20k for "impact fees" charged by most cities in the valley fit in?
But you're right if that is charged to new built then it would add to existing-home values. Just try to tell it to the guys who want to shoot their own foot by prohibiting it.
But you're right if that is charged to new built then it would add to existing-home values. Just try to tell it to the guys who want to shoot their own foot by prohibiting it.
It wasn't a political statement- just saying that while a "mcbuilder" might be able to build 100 homes at $80 per square foot, I think the odds of a regular guy building anything but a double wide for under $100 per square foot are pretty thin, even in a really tight economy. I suppose for evaluation purposes you would use the same figures the mega-builders use, but in the real world, if you started with a "free" lot and a modular home, I think even $140 per square foot is unlikely.
Location: In an alternate universe according to some
8,465 posts, read 8,618,022 times
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Quote:
Originally Posted by Zippyman
It wasn't a political statement- just saying that while a "mcbuilder" might be able to build 100 homes at $80 per square foot, I think the odds of a regular guy building anything but a double wide for under $100 per square foot are pretty thin, even in a really tight economy. I suppose for evaluation purposes you would use the same figures the mega-builders use, but in the real world, if you started with a "free" lot and a modular home, I think even $140 per square foot is unlikely.
During the "boom" we built a very nice 2500 sqft house with a large 3 car garage for around $85 sqft. It can be done BUT the only way we found to do it was to general it ourselves (saving at least 15%) and do some of the construction ourselves (interior paint,pulling wires,installing fixtures, etc) as well as providing the materials (again saving at least a 10% markup) not to mention the ability to take a real nice vacation afterwards with all the airline points built up when you're paying for everything.
If you're comfortable doing all that then it can be done.
It wasn't a political statement- just saying that while a "mcbuilder" might be able to build 100 homes at $80 per square foot, I think the odds of a regular guy building anything but a double wide for under $100 per square foot are pretty thin, even in a really tight economy. I suppose for evaluation purposes you would use the same figures the mega-builders use, but in the real world, if you started with a "free" lot and a modular home, I think even $140 per square foot is unlikely.
I understand. I was just making fun of the politics. It's the only thing you can do about it.
I agree $80/sf is ambitious even for big-volume builders. If you take lumber futures and crude oil (=energy costs go into anything) as proxies for building material costs, then we should still be slightly below costs from a year ago, but catching up fast and I have just gotten a major buy signal for crude and commodities in general. I expect commodities to make new all time highs soon, unfortunately. So building materials should go nowhere but up. Labor costs I do not know but I hear of shortages with so many contractors and illegals gone during the bust. The gist of it is IMO that building costs will continue to rise so 80/sf will be more and more difficult going forward.
Location: In an alternate universe according to some
8,465 posts, read 8,618,022 times
Reputation: 3625
Quote:
Originally Posted by Potential_Landlord
I understand. I was just making fun of the politics. It's the only thing you can do about it.
I agree $80/sf is ambitious even for big-volume builders. If you take lumber futures and crude oil (=energy costs go into anything) as proxies for building material costs, then we should still be slightly below costs from a year ago, but catching up fast and I have just gotten a major buy signal for crude and commodities in general. I expect commodities to make new all time highs soon, unfortunately. So building materials should go nowhere but up. Labor costs I do not know but I hear of shortages with so many contractors and illegals gone during the bust. The gist of it is IMO that building costs will continue to rise so 80/sf will be more and more difficult going forward.
You've got a good point. Lumber costs are probably the least of everyone's worries as those fluctuate week to week but tend to stay rather low due to imports (unless a big storm hits then plywood shoots up).
The drought and a few refinery fires lately are going to raise the costs quite a bit imo. It's amazing what the loss of one or two crops (corn and soy) can do and how far it sends ripples throughout the economy. Every rise in fuel/production costs are passed on to the consumer so I'd expect we're just seeing the beginning of price hikes in everything since corn/soy are used in most products in one way or another.
I am refinancing our newly purchased home(November 2011) at a lower interest rate with no closing costs. The house was appraised at $260k($58/sqft) nine months ago, will see what the new figure will be. Just for comparison purposes, a smaller sqft home on our street is on shortsale for $320k and it has been getting a lot of interest...
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They will level out when the prices come back to a normal level (equivalent to other cities of our size and amenities). Phoenix was undervalued for a VERY long time and that 'gold rush' with prices really put the exclamation point on that idea! Once investors stop flooding the market with cash, prices and sales will level out. I would think between $120 and $140 per square foot would be a 'normal' level in the city limits. In the suburbs, I don't know because I never had any interest in suburbs so I can't guess.
