Housing shortages coming to a city near you

[MN-Born-n-Raised]

Originally Posted by Jukesgrrl

...People have held on to their homes as much as they could because prices were so low. There were virtually no rental properties in my subdivision when we moved here. Now there are plenty. All owned by folks who want to sell but can't yet recover what they paid.

That's an interesting train of thought. The people who didn't let their home go back to foreclose are still holding on for higher prices which is one reason why the inventory is low. They are either stuck at their location still upside down or renting their property. I wonder what percentage of the owners are in this camp?

There is yet another group of home owners who bought strictly for an investment. With single family homes that rent by the year, it's nearly impossibly to make money to a regular family. An example exception is renting to 5 different non-related individuals (like a college campus rental) or renting furnished by the week. Without appreciation, you cannot make money on a single family home because depreciation kills you over time. The profit is on the faster than inflation appreciation. So expect a sell off once the perceived slowdown arrives.

Folks that bought rental properties will stare at when it slows down and sell. Certainly increased interest rates will remove the sense of urgency for people who want to buy payments and slow down the growth. How much remains to be seen. So it would also be interesting to understand what percentage of Phoenix owners fall in this rental owners camp.

Originally Posted by Jukesgrrl

I have some hope for recovery, mainly due to the fact that builders here haven't been building new homes in "my" price range to any extent and my neighborhood is popular. But they can put them up really fast, so I fear if the market recharges, they will start building new and buyers won't want my "used" home.

Builders seemingly cannot find cheap enough land and they are fearful of building too fast. No one is predicting a 2004-2005 building pace which would make your fears come true.

At the peak, my AZ home sold for around $500K. I bought at the bottom for around $190K. Now it's worth around $290K. At 10% per year appreciation going forward it is still going to take a long time for it to return to bubble prices. We might get another year of 10% appreciation. But without question, people buy payments. At record low interest rates, it drives up the price of housing especially when there is a competitive sense of urgency. NOW IS THE TIME TO SELL that house that undesirable house that is backed up to a busy road or has a funky layout. Because the multiple bidding frenzy will subside once the sense of urgency to buy is gone. The fear of climbing interest rate is driving non-cash buyers to overpay. Once that is gone, the remaining fear is fast appreciation. I think that will subside as well when interest rates rise a couple of points from the bottom. It's obvious that the powers in charge are trying to toss a blanket on fast inflation. I suspect they still want controlled inflation to make the national debt feel less painful / more manageable.

[autism360]

A little excerpt from the July Cromford Report says:

...There are no promising sources of new supply:

• delinquent borrowers - already back to normal levels of delinquency
• pre-foreclosures - dwindling fast
• banks - not going to happen (they hardly have any left)
• investors - not going to happen (most homes are leased and appreciating nicely, no good reason to sell now)
• ordinary sellers - many still underwater and those who aren't are scared they won't be able find a new home because of the short supply
• new homes - permits are still being issued at only one third the normal rate

We are now seeing what happens when the whole country under-builds dwelling units by about 3.6 million homes over 5 years. The creation of new homes is vastly exceeded by the creation of new households.

Things are going from bad to worse for buyers as far as housing prices and inventory are looking, if I was a home buyer I would step up my game big time before the true crisis hits

[Marv101]

It still depends on where you live, since there were large swaths of the country where no housing crash took place; for all of the attention which Phoenix, LA, Vegas, & Miami received as it related to plunging prices, lots of folks in many parts of the country never experienced a housing crash in the first place.

Obviously hedge funds and other deep-pocketed investors have come into those markets and several others and purchased tons of houses to buy & hold (can you blame them?), but there are still plenty of markets out there where you can make a very nice living either flipping or or going the buy & hold route.

[autism360]

More unexpected early boomerang buyers and foreclosures are drying up = increasing home shortages for the foreseeable future


Expert: East Valley, Phoenix foreclosure 'tsunami' all but over - East Valley Tribune: Real Estate

Expert: East Valley, Phoenix foreclosure 'tsunami' all but over

Housing story continues to include shortage of available homes for buyers, ramped up new-builds



Phoenix housing market sees 'boomerang buyers' sooner than expected

http://www.azcentral.com/business/re...ng-buyers.html

[autism360]

http://www.azcentral.com/business/re...html#protected

The housing crisis is going to get much worse before it gets better, builders will not be back to normal until 2017 that is 4 years away !!!!!!!!!!!!!! MEANWHILE interest rates and home prices are headed upward.

An earlier forecast in January projected the construction of 16,000 new houses across the region in 2013, up from 11,500 in 2012. Now, about 13,000 new houses are expected to be built in metro Phoenix this year, analyst Greg Burger said.


Analysts consider about 25,000 to 30,000 new houses a year over the past 20 years to be typical for a non-recession year.


RL Brown Reports forecasts 18,000 new houses will be built in the Phoenix area next year, and another 23,000 in 2015. By 2017, 30,000 new houses are expected to be built annually. That’s fewer than half of the houses built during the peak of 2006

[shiphead]

So... I am very curious when these cities are going to grow some cojones and stop building el cheapo homes to kingdom come. I thought it was interesting how much life there was at the border of suburban nightmare and the desert. I don't want another housing bubble.

[Potential_Landlord]

According to a friend currently looking to buy in my neighborhood the market has slowed down from the spring. You don't have to put in bid right away to even have a chance at buying something.

[Ponderosa]

Originally Posted by Potential_Landlord

According to a friend currently looking to buy in my neighborhood the market has slowed down from the spring. You don't have to put in bid right away to even have a chance at buying something.

Summer is the dregs of the market. There seem to be plenty of for sale signs on the streets. The investors are gone and the buying frenzy is over. Things will be a little tight until new builds come back. That won't happen until prices for an average quality new home hit 130/sf or more.

[jimj]

I notice a slowdown here as well but it seems it's really slowed for single story homes. Two stories are still selling, mostly to investors.

[autism360]

/http://www.azcentral.com/insiders/ca...slows-in-july/

A forecast in January projected the construction of 16,000 new houses in metro Phoenix in 2013, up from 11,500 in 2012. Now, about 13,000 new houses are expected to be built, analyst Greg Burger said. This likely means new-home prices will continue to rise faster than average. The average price of a new home has climbed 24percent in the past year, according to RL Brown.

Analysts consider about 25,000 to 30,000 new houses a year over the past 20 years to be typical for a non-recession year.

not looking good for an improvement in housing inventory