Phoenix Home Prices Increasing after Summer Doldrums (Mesa, Scottsdale: sale, real estate)

[MN-Born-n-Raised]

Originally Posted by miran

So the market in Arizona is finally stable and increasing in price. Who is actually purchasing these homes? People who lost them a few years ago? Investors? Snowbirds? Past Renters entering the market? Canadians?
Who are buying these homes?

You answered your own question.

[liz451]

Originally Posted by miran

So the market in Arizona is finally stable and increasing in price. Who is actually purchasing these homes? People who lost them a few years ago? Investors? Snowbirds? Past Renters entering the market? Canadians?
Who are buying these homes?

I'm closing on a place next week (fingers crossed!), and I'm a first time homebuyer in my 20's. Luckily didn't have any all cash buyers when I ended up bidding on this place. I'll post a full report of my experience once I actually close.

[Boompa]

Barely above construction cost is hardly a boom.

[Potential_Landlord]

Originally Posted by miran

So the market in Arizona is finally stable and increasing in price. Who is actually purchasing these homes? People who lost them a few years ago? Investors? Snowbirds? Past Renters entering the market? Canadians?
Who are buying these homes?

Good point. In the long run, local Phoenix median incomes must support our rising home prices. The last thing we need is a doubling of prices while at the same time real incomes fall, as seen in the last boom-bust cycle. So far the recent rise in home prices is sustainable only because interest rates and prices have come down significantly. What we need now is rising real median incomes to underpin the market. In other words, the money has to go from Wall Street to Main Street. Or, take Bell Road, the massive road intersecting all of the North Valley. Imagine that all the people living there have 4 years of 3% real income gains, which we have not seen since the 1980s or 1990s btw. What do you think that would do to local home prices? That's where we have to go, the sooner the better.
BTW - a fitting word for today's Labor Day by President Eisenhower in 1956: "Labor is the United States. The men and women who, with their minds, their hearts and hands, create the wealth that is shared in this country - they are America."

[john3232]

Originally Posted by whodiman

And of course just because you successfully bid on the house you will get it. There is still the issue with appraisals coming in lower than the bid.

Which is why you've really got to know the market. The example I used above the house was a good $10,000 under market rate and would get a lot of bids.

[Potential_Landlord]

I gave it some more thoughts this long weekend about affordability in our Phoenix RE market. At the height in the early 1980s, mortgage rates were around 15% (folks who lived here then - correct me if I'm wrong). That's about 4.6 times higher than they are at today's prime mortage rate of around 3.25%. If we leave amortization aside - that means a mortgage loan is now 4.6 times more affordable than in early 1980. I'm not sure we can make mortgages 4.6 times cheaper from here down to rates of around 0.71% for a 30 year fixed mortgage. I do not want to know how our economy would look like if rates were to fall this low. We probably won't have an economy at all then.
That's why I can only stress it again~ we need to get median wages in Phoenix to rise in real terms again. Going forward, we cannot continue to rely on falling rates for affordability, but rising wages for the average Joe Phoenix Homebuyer. Obviously, that means doing things very differently than we did over the last 30+ years when average wages started to disconnect from GDP growth and income growth started to trickle up more and more to the uber-rich only. It will probably require another New Deal to revert the trend.

[LS35a]

I'm in Arrowhead and have four short sale/foreclosures in my neighborhood this year.

My house is worth at least fifty grand less than it was in January.

The damn foreclosures make it impossible to get a decent price out of house if you want to sell.

[PhinsFan1]

Originally Posted by LS35a

I'm in Arrowhead and have four short sale/foreclosures in my neighborhood this year.

My house is worth at least fifty grand less than it was in January.

The damn foreclosures make it impossible to get a decent price out of house if you want to sell.

You got off "easy" if you're "only" 50k underwater. I know many, many people who are over 100k under. I agree - as long as people continue to walk, our home values will continue to suffer.

[SMG]

Originally Posted by LS35a

I'm in Arrowhead and have four short sale/foreclosures in my neighborhood this year.

My house is worth at least fifty grand less than it was in January.

The damn foreclosures make it impossible to get a decent price out of house if you want to sell.

I do not believe that. You had some short sale activity this year, your post says. But, values have risen across the valley. Your area is certainly not an exception. The number of distressed sales you are seein in your neighborhood is not s big of a number from last year or he year before. I doubt our property lost value this year at least not due o the market some areas have declined, nothing in Glendale with Arrow in the name ...lol.

[jimj]

Originally Posted by SMG

I do not believe that. You had some short sale activity this year, your post says. But, values have risen across the valley. Your area is certainly not an exception. The number of distressed sales you are seein in your neighborhood is not s big of a number from last year or he year before. I doubt our property lost value this year at least not due o the market some areas have declined, nothing in Glendale with Arrow in the name ...lol.

It's totally possible in my opinion. After looking to refi last month we got (imo) a dismal appraisal not at all in line with (or even close to) all the buzz of "30%" gains. The appraiser specifically noted the shorts and foreclosures in the area, a couple recent ones as a matter of fact. The recent ones had been sitting "in process" for the last 2 years or so and just happened to hit the market at just the wrong time for us. We ended up killing the refi due to the appraisal since it wouldn't benefit us enough in the time frame we were looking at.
Now if they'd change the way they look at shorts/foreclosures and use the date they STARTED the process instead of when they get off their collective arse and finally do something to sell it it'd be a different story I'd bet much better for many,many people.
I won't even go into the fact that these sales usually have significant (more than $1000) rehab costs attached to them.