How much slower is our Phoenix RE market Right Now? (Surprise: short sales, foreclosures)

[Zippyman]

Originally Posted by HX_Guy

A quick thought and this could be totally off base but didn't the Phoenix RE market have a mini-boom again about a year ago...multiple offers, buying sight unseen, etc? I recall readint articles talking about how RE in Phoenix is recovering while other parts of the country were not.

Going off that, is it possible that now the rest of the country is catching up while we are slowing down, something the other cities may experience in the future...as in Phoenix was ahead of the curve?

It's really neighborhood-specific - many of the higher-end areas have recovered to their bubble-ish peaks. Others may have "doubled" in value, but are still ~50% off the peak pricing. Buyers who are new to the market here are quite understandably worried about paying too much. I think it's really the market just sorting itself out naturally. There was a point here where we literally had *shacks* in Guadalupe & 1970's single-wide trailers (on land) selling for over $200k.. The true "utility" value of those properties wasn't anywhere near what they actually sold for, but on the other hand - the banks were literally selling many properties for less than the value of the dirt underneath them for a while.

Personally, I think it's a good thing for buyers to be a little more cautious & realistic about the true "value" of a property - if a property is say, walking distance from a Honeywell facility, or super close to ASU - something even a mile away isn't truly "comparable".. nor is any given zip-code automatically worth hundreds of thousands more than another if they touch.

With wacky-wild appraisals gone from the market, you're left with real buyers saying, "I'll pay *more* for this, and *less* for that" - which is exactly what is supposed to happen. The phoenix metro isn't "growing" any more land - so property close to the things people want to be surrounded with is (and has) had the strongest recovery.

The days of being able to "plop in" 500 more "semi-custom homes" next to a major employer, school, etc. are pretty much gone, unless we're talking about fairy-tale future employers way out in the desert, just past the point where Jesus lost his sandals..

[grmi66]

About the only new development I see being built right now is within a 10 minute drive of all the spec warehouse/manufacturing buildings they are throwing up on Buckeye & Van Buren. So I'm guessing that these small 3/2 1200 square foot houses will all go to the future employees of these warehouses.

I do a lot of driving around town for work and at least in the west valley all of the business construction is blue collar and/or retail (like the big American Home Furnishing warehouse on the 101) oriented. Can't remember the last time I saw an office complex being built.

[AlohaFriday]

Originally Posted by Zippyman

It's really neighborhood-specific - many of the higher-end areas have recovered to their bubble-ish peaks. Others may have "doubled" in value, but are still ~50% off the peak pricing. Buyers who are new to the market here are quite understandably worried about paying too much. I think it's really the market just sorting itself out naturally. There was a point here where we literally had *shacks* in Guadalupe & 1970's single-wide trailers (on land) selling for over $200k.. The true "utility" value of those properties wasn't anywhere near what they actually sold for, but on the other hand - the banks were literally selling many properties for less than the value of the dirt underneath them for a while.

Personally, I think it's a good thing for buyers to be a little more cautious & realistic about the true "value" of a property - if a property is say, walking distance from a Honeywell facility, or super close to ASU - something even a mile away isn't truly "comparable".. nor is any given zip-code automatically worth hundreds of thousands more than another if they touch.

With wacky-wild appraisals gone from the market, you're left with real buyers saying, "I'll pay *more* for this, and *less* for that" - which is exactly what is supposed to happen. The phoenix metro isn't "growing" any more land - so property close to the things people want to be surrounded with is (and has) had the strongest recovery.

The days of being able to "plop in" 500 more "semi-custom homes" next to a major employer, school, etc. are pretty much gone, unless we're talking about fairy-tale future employers way out in the desert, just past the point where Jesus lost his sandals..

Eastmark with thousands of homes, some of them really high-end, is underconstruction and that's where the Apple campus will be, so the days of plopping homes down next to big employers isn't totally gone. There's still tons of land in a East Mesa. It's far out, but still worth a mention.

I will also say that we're looking at houses in Scottsdale, and many have been on the market for a long time with price reductions. I think a lot of people are overpriced. You have old homes in need of massive updates priced higher than completely renovated flips in the same neighborhood. No matter; everybody's sitting on the market dropping their prices.

[Zippyman]

Originally Posted by AlohaFriday

Eastmark with thousands of homes, some of them really high-end, is underconstruction and that's where the Apple campus will be, so the days of plopping homes down next to big employers isn't totally gone. There's still tons of land in a East Mesa. It's far out, but still worth a mention.

I will also say that we're looking at houses in Scottsdale, and many have been on the market for a long time with price reductions. I think a lot of people are overpriced. You have old homes in need of massive updates priced higher than completely renovated flips in the same neighborhood. No matter; everybody's sitting on the market dropping their prices.

You've really just proven my point though - Apple doesn't currently exist @ Eastmark - and many valley landmarks are well-planted & established. If you want/need to live within a "xx-minute" commute of a Honeywell facility, The VA hospital, the airport, Intel, Old-Town Scottsdale, etc. - that dirt is already occupied.

Scottsdale is an 18-mile long "pencil" on the map, and your choice of new homes is just in the "eraser" - if you want or need to live near the "point", you're going to have to separate an existing owner from a property there - and you'll have to *pay* to do that - you might even have to live with some 1970's appliances & a "sunken" living room.

The wife and I are fortunate to live close to the things we need to get to, and frankly, it's baffling when I get on the 101 @ "the wrong time" and see so many people grinding along at 20mph heading to Scottsdale, or back towards Glendale & other points west - every-single-day.. It's a self-inflicted torture if you ask me, but maybe they have satellite radio or something that makes that 20 mph slog "pleasurable"..

[sh9730]

Just a quick antecdote on this topic down here in Casa Grande. My brother is a realtor and he has been busy down here. Yesterday listed a property and it went under contract the same day! It was just a decent (but nice condition) house with a small lot with a small pool in a standard clean neighborhood. Nothing super special about it...


So, my point is if it is priced right (this one was in the 170K range for 2100 SF on a less than 6K lot) it will sell....

[actinic]

https://twitter.com/NickTimiraos/sta...58686403891200

The chart shows Phoenix property values increasing but slowing, down 'just' 35.4% from peak now. The huge rise in inventory (which typically spells slowing or even declining values) can be partially attributed to how deep the hole was and fewer distressed sales and cash buyers (investors).

Ironically, as values increase, many who were ... or still are, underwater will be inclined to put their property on the market, adding to supply and exerting price pressure downwards. The deep drop probably underscores a large number of potential sellers still waiting it out hoping for the rebound to continue. Many have become unintended landlords. Flippers and investors who purchased a few years ago remain the big unknown ... they don't need as big of a price bump to sell.

This is happening across the country, the main difference being simply a matter of degree. Phoenix has one of the biggest holes to climb out of. Will its future growth offset this? Eventually. How long? No one knows. As an investor today I know the best deals have come and gone so I might be looking to other cities. New homeowners? Well, it probably isn't another 2006 - 2007 bubble, right?

[actinic]

Originally Posted by sh9730

So, my point is if it is priced right (this one was in the 170K range for 2100 SF on a less than 6K lot) it will sell....

Did the seller make any $?

[sh9730]

I don't know - but that doesn't matter really in this discussion other than fact that some wont sell until they can break even at least.

But I do know this house sold for about 80 bucks per SF and 3 years ago it would have gone for about 50.....could it have gone for 85 or 90 today if this seller were to hold out? Who knows.....

I will say that things seem to be steadier down here than a few months ago. Beginning of the year I was beginning to get very worried as inventory skyrocketed....I do the same search of a realty site every day....have for over 5 years now. At the beginning of the year that search yielded almost 400 SFR in the CG area - now its down at 300 or so.

Of course back in 2011/2012 I saw it as low as 90 for sale!

But it seems we are averaging about a 3-4 month supply here in CG which is still pretty healthy for the sellers....

Not sure if we are an anomaly with all the activity and (hoped for) building of Phoenixmart.....but..

[PhxMan500]

Originally Posted by HX_Guy

A quick thought and this could be totally off base but didn't the Phoenix RE market have a mini-boom again about a year ago...multiple offers, buying sight unseen, etc? I recall readint articles talking about how RE in Phoenix is recovering while other parts of the country were not.

Going off that, is it possible that now the rest of the country is catching up while we are slowing down, something the other cities may experience in the future...as in Phoenix was ahead of the curve?

2011 really felt like the bottom of the trough, or the anti-bubble in response to the bubble five years earlier. The mini-boom seemed like more of an adjustment from going too low. It really "feels" more like normal now with more realistic expectations from buyers and sellers, no crazy frenzies, etc. There are few other cities that experienced the extremes like we did, but I completely agree with your sentiment that we do seem to be ahead of the national trends and have been for at least the last decade.

[actinic]

Originally Posted by sh9730

I don't know - but that doesn't matter really in this discussion other than fact that some wont sell until they can break even at least.

Actually it plays right into it. Price rose enough for the seller to list the home. The seller may not have broke even but considered it an acceptable loss. Certainly not at 50 sqft. Many other potential sellers out there crossing their fingers for continued improvement.