How much slower is our Phoenix RE market Right Now? (days on market, insurance)

[sh9730]

I ll take 5% appreciation (assuming inflation remains below that amount) all day long for something that is PRIMARILLY a place to keep me sheltered. That is much more along the norms over time anyway.

[MN-Born-n-Raised]

Originally Posted by sh9730

I ll take 5% appreciation (assuming inflation remains below that amount) all day long for something that is PRIMARILLY a place to keep me sheltered. That is much more along the norms over time anyway.

That wasn't my point. I was speaking of investors (people who were buying to make money on SFH's) via renting them out. I picked up appreciation because I paid $52 a square foot and now it is worth $98ish. THAT was the investment. It use to be $105 earlier in the year so it is softening; hence a bad investment right now. And it will probably be slow-and-go for the near future. Hence, I'd sell my home if I was only looking at it as an investment. But I am not. Other smart investors have sold or studying their exit strategy.

[vince3vince]

Originally Posted by AZPam

All of this is being blamed on the lack luster interest in home ownership from the millennial generation (20 something's to early 30's). They seem to be very content to rent when typically this age range would be expected to be buying their first homes. This segment of our population has always played a big role in home demand. Student loan debt could also be playing a huge factor for this age group.

.

Maybe they are hesitant because we profiteers and flipping our homes for double what we paid just 2 years and telling them we are the it area. They better realize soon that we indeed are the it area and we can very easily double again in 2 years. the longer they wait, they will forever be priced out of our it area market

[sh9730]

MN,

I was responding to bullet point of AZPAMs post.....about still expected to increase 5% this year in PHX market.

[new2colo]

The single family residential market has flattened out for the foreseeable future in most Valley communities. How many "experts" have speculated over the course of the past five years that the single family residential real estate market would return back to "normal" (2003-2006 growth levels) in two or three years. Back in 2009, numerous articles stated that real estate would turn around in Phoenix by 2011 or 2012. 2011 and 2012 came and went with a housing market that was still flat. In 2011, all these experts were predicting a huge bounce back by 2013 or 2014. 2014 is almost 3/4 of the way over and the real estate market for single family residential in Phoenix is still flat.

I know homeowners who purchased their homes during the boom years for vastly inflated prices are chomping at the bit for any good news about a real estate prices shooting up again here. Not going to happen. The demand has completely deflated. There are no jobs here to attract the buyers market necessary for rising home values (thanks in large part to our politicians who have no desire to diversify the state's economy), population growth has stalled (due to lack of job growth), many millenials and 30 somethings are saddled with student loan debt and other debt that makes home purchasing unattainable, many millenials who might be in the market for home buying have no interests in living in a suburban tract home, and areas of rapid growth have shifted over to Texas, Colorado, Utah, and California (where white collar job growth has been significant). Houston's single and multi family housing markets are on fire now, exceeding pre-recession levels, there continues to be enormous population growth there, and the city continues to diversify its economy, not relying on construction and warm winter weather to be the primary attractors.

Until Arizona's political leaders and residents realize the need to diversify this state's economy, nothing will change. The people necessary to get the economy moving here are not going to come to a place where the only job growth is at Wal-Mart, some call center, a distribution center, or some other low skill place. Our leaders here still think that sunshine and cutting taxes is the key to getting Arizona back on track. Clearly that's not been successful thus far. There is no will here to change the status quo, so we will continue to limp along like we've been doing for the past six years until things change.

[MN-Born-n-Raised]

Originally Posted by new2colo

The single family residential market has flattened out for the foreseeable future in most Valley communities. How many "experts" have speculated over the course of the past five years that the single family residential real estate market would return back to "normal" (2003-2006 growth levels) in two or three years. Back in 2009, numerous articles stated that real estate would turn around in Phoenix by 2011 or 2012. 2011 and 2012 came and went with a housing market that was still flat. In 2011, all these experts were predicting a huge bounce back by 2013 or 2014. 2014 is almost 3/4 of the way over and the real estate market for single family residential in Phoenix is still flat.

Before I bought, I was reading every possible article on the topic from 2009-2011. I don't remember reading ONE "expert" saying it was going to bounce back in a couple years. In fact, they were predicting 10-15 years and normal inflationary increases.

Heck, I never read anyone's prediction that a sharp and fast appreciation would occur from 2011 to 2013. But that is what happened (but a far cry from regaining all of the loss) where there were lines to make offers. Those days have passed.

Now I do remember a C-D thread early in 2104 where I took my educated guess that 2014 would be flat or even possibly down a little for the Valley. This coming December, I will be sure to remind others of their failed, brisk 2014 appreciation predictions.

[actinic]

Originally Posted by MN-Born-n-Raised

This coming December, I will be sure to remind others of their failed, brisk 2014 appreciation predictions.

You mean some were overly optimistic in their predictions? I'm shocked. /sarcasm

[Zippyman]

Originally Posted by MN-Born-n-Raised

Before I bought, I was reading every possible article on the topic from 2009-2011. I don't remember reading ONE "expert" saying it was going to bounce back in a couple years. In fact, they were predicting 10-15 years and normal inflationary increases.

Heck, I never read anyone's prediction that a sharp and fast appreciation would occur from 2011 to 2013. But that is what happened (but a far cry from regaining all of the loss) where there were lines to make offers. Those days have passed.

Now I do remember a C-D thread early in 2104 where I took my educated guess that 2014 would be flat or even possibly down a little for the Valley. This coming December, I will be sure to remind others of their failed, brisk 2014 appreciation predictions.

+1 - in 2009,2010 & even part of 2011, I remember quite a few threads & "experts" saying the 10% tax-credit was a "trap" for those who qualified (those who used it would be so far underwater, that they might *never* recover). I remember lots of talk about "bouncing along the bottom, like Japan, possibly for decades".. "no rush to buy, phoenix real-estate won't go up for many years". I even remember some "experts" who said 2009 was "a new normal" for Phoenix..

I bought my primary residence & a couple rentals & advised my family members to do the same based on rental values, versus cost-to-own, with no expectation of appreciation. I did an FHA mortgage (which is assumable) on my primary residence, based on an expectation that interest rates would climb (a lot!) & figured if I had to sell, a buyer might not like the house (or the loan amount!), but they might loooove that *sweet* 5% fixed (for 30 years!) loan rate.. lol.. oooops! Ended up re-fi'ing into a 15 yr @ 4% last year..

Bottom line, Phoenix is still way undervalued for a city of it's size. We're #6 in the nation for population, and if you take a Phoenix budget to the top five cities, you better like living in a tent, because you won't be buying much house.

[AZPam]

Originally Posted by Zippyman

+1 - in 2009,2010 & even part of 2011, I remember quite a few threads & "experts" saying the 10% tax-credit was a "trap" for those who qualified (those who used it would be so far underwater, that they might *never* recover). I remember lots of talk about "bouncing along the bottom, like Japan, possibly for decades".. "no rush to buy, phoenix real-estate won't go up for many years". I even remember some "experts" who said 2009 was "a new normal" for Phoenix..

I bought my primary residence & a couple rentals & advised my family members to do the same based on rental values, versus cost-to-own, with no expectation of appreciation. I did an FHA mortgage (which is assumable) on my primary residence, based on an expectation that interest rates would climb (a lot!) & figured if I had to sell, a buyer might not like the house (or the loan amount!), but they might loooove that *sweet* 5% fixed (for 30 years!) loan rate.. lol.. oooops! Ended up re-fi'ing into a 15 yr @ 4% last year..

Bottom line, Phoenix is still way undervalued for a city of it's size. We're #6 in the nation for population, and if you take a Phoenix budget to the top five cities, you better like living in a tent, because you won't be buying much house.

I think you bring up a lot of great points and have to agree with a lot you said.

One thing that I will be interested in is when interest rates go up how the assumable loans will start playing into the market. I've been a Realtor for 18 years and have yet to do an assumable, so it's something I'm looking forward to.

[Zippyman]

Originally Posted by AZPam

I think you bring up a lot of great points and have to agree with a lot you said.

One thing that I will be interested in is when interest rates go up how the assumable loans will start playing into the market. I've been a Realtor for 18 years and have yet to do an assumable, so it's something I'm looking forward to.

I was a little "too smart for my own good" in getting the (assumable) FHA mortgage over a conventional mortgage - but in my own defense, the popular logic was that the dollar would fall & rents & interest rates would both rise. I remember getting 7% interest in a savings account on my lawn-mowing money as a child & I know people who had 18% rates on their mortgages - it wasn't really *that* long ago. Anything is possible when the dow goes from 14000 to 6000 in just a few weeks/months.

I'm not sure if we will ever see mortgages being assumed in any quantity again - certainly anyone who bought when I did, even with 3% down, got enough of an equity-bump during the bounce to refi into a conventional at a better rate if they wanted to.. It was the one huge advantage to FHA financing - the changes made to the program since the crash (doubling of fees & cutting allowed seller contributions in half) have neutered it to the point of worthlessness now. Indeed, the trashing of FHA financing may well have as much to do with the current slump as anything else. FHA financing was a big factor in pulling us out of the crash, since all the hot-shot wall-street banker-dudes didn't want to invest a nickel in "main street" USA, unless they could dump that "risk" on the government after collecting their fees.