Any guesses on home prices? (Goodyear, Maricopa: home builders, buying, live in)

[JTW2013]

Originally Posted by John7777

Let's revisit this topic in a year. My guess is that you'll be in Chapter 7 bankruptcy. Or that's where you'll be headed. I can't tell you the number of people I've known in Phoenix who thought they were real estate gurus. Multiple properties, doing well. Until the whole market crashed.

Right now, people are asking $350K for houses that are worth $95K, at best. Those days are numbered.

If the house sells for $350K, then it is worth $350K, not $95K.

People on the Chicago suburbs forum are always looking for a unicorn, the hidden gem Chicago suburb that has underpriced homes. It doesn't exist. Houses sell for what they are worth at the time they sell (generally speaking, of course). If a suburb costs less it has something that makes it less desirable; e.g. lower performing school, bad transportation options, longer commutes, whatever. The same rule applies in every other metro area.

There aren't many houses in the East Valley or Scottsdale that are worth only $95K even if you wish it were so because you are looking for houses.

[asufan]

Originally Posted by JTW2013

If the house sells for $350K, then it is worth $350K, not $95K.

People on the Chicago suburbs forum are always looking for a unicorn, the hidden gem Chicago suburb that has underpriced homes. It doesn't exist. Houses sell for what they are worth at the time they sell (generally speaking, of course). If a suburb costs less it has something that makes it less desirable; e.g. lower performing school, bad transportation options, longer commutes, whatever. The same rule applies in every other metro area.

There aren't many houses in the East Valley or Scottsdale that are worth only $95K even if you wish it were so because you are looking for houses.

He's looking for 1970 prices in 2015. Incredible.

[petlover8]

Originally Posted by asufan

That house is probably worth over $400k fixed up, like my buddies house in North Park San Diego who has a very tiny old house worth $450k. you realize that as a house depreciates, more of the value is in the land, don't you? Houses DO depreciate (barring any remodeling), it is the value of the land that increases the overall value of the property. the buildings are just the "improvements" on the land, whether good or bad. Occasionally an "improvement" actually hurts the value of the land, and an appraiser (or prospective buyer) has to factor in the cost to demolish the improvements and SUBTRACT from the value of the land.

What people much like yourself fail to realize, who get caught up in this type of nonsense, are the simple economic facts of what causes these type of markets to come crashing down in the first place. They always do because they contain no real value. People come in like yourself, with an over inflated sense of value, running like sheep to slaughter. In the process driving up prices well beyond what the end product is actually worth, or has ever been worth. Usually over paying for it with borrowed money they cannot pay back. It happened in the Stock Market in 1929. It happened to the "Day Traders" in the dot com crash in the Spring of 2000. (Although not so much with borrowed money). It happened in the real estate crash in 2008. And it will happen here yet again.

This has already started. Look again at the link I've provided. Close out the top cover link. See all of the blue circles? Those are all either bank auctions, or foreclosures. As it sits now it is almost 50% of the available homes currently on the market. Do you honestly think this is conducive to a healthy real property market? If you do you're dreaming. These properties are not marginally overpriced. They are insanely over priced. At this rate, what do you think the average suburban home in L.A. County will cost in 6 years? $1.8 Million? Who do you think will be writing mortgages for these 1,000 sq. ft., 1 bath, "mansions"? The Good Fairy perhaps? Banks are already shutting down on these over priced shacks.

This insane housing market in southern California has crash and burn written all over it. Like a ZR-1 Corvette with no brakes. Yes, some will make out. Just as some made out in most all of these type of suicidal markets. But for every Mark Cuban who manages to luck out and sell at the exact right time, Thousands will go down in flames, just like they did here in 2008. This will only be worse.... A LOT worse.

[PHX Newbie]

I do agree with the observations raised by MN-Born on the last few pages, but I think this thread lost its relevance to the Phoenix real estate market about a half-dozen pages ago.

[SMG]

I have been lurking on the sidelines the last couple of days, thought I would throw my .02 in. Over the years, I have valued about 8000 properties here in Maricopa County. I do this for various lenders, investors and private parties. I read comments from some of you that seem to know exactly what will happen with property values. When others do not see things the same as you, insults are hurled their way.
While it is apparently fun to speculate and quote Cromford and Michael Orr, the bottom line is that none of us can be certain of what values will do. Adding insults to your exchange does not strengthen your point or add to your credibility.
Carry on however you see fit. But as a person that does this every day for years on end, I am not certain what values will do. Really surprised so many here are.

[asufan]

Originally Posted by SMG

I have been lurking on the sidelines the last couple of days, thought I would throw my .02 in. Over the years, I have valued about 8000 properties here in Maricopa County. I do this for various lenders, investors and private parties. I read comments from some of you that seem to know exactly what will happen with property values. When others do not see things the same as you, insults are hurled their way.
While it is apparently fun to speculate and quote Cromford and Michael Orr, the bottom line is that none of us can be certain of what values will do. Adding insults to your exchange does not strengthen your point or add to your credibility.
Carry on however you see fit. But as a person that does this every day for years on end, I am not certain what values will do. Really surprised so many here are.

I agree, my prediction is stable to +/- 3-5%, and I look at real estate daily as well. You know as well as I do, there are submarkets within Phoenix itself that have moderately declined and some areas that have slightly increased all at the same time. Real Estate valuations are cyclical and do not go up forever, they WILL pull back eventually which provides a great buying opportunity for some. I just reject the notion that we are heading for a crash and burn scenario as I do not see values that inflated currently, and I don't understand how some here are getting so worked up and personal over another's differing opinion.

please keep offering your opinion in this thread as I assume you are an appraiser? it's certainly better than the speculation that I will file chapter 7

[Potential_Landlord]

Originally Posted by SMG

I have been lurking on the sidelines the last couple of days, thought I would throw my .02 in. Over the years, I have valued about 8000 properties here in Maricopa County. I do this for various lenders, investors and private parties. I read comments from some of you that seem to know exactly what will happen with property values. When others do not see things the same as you, insults are hurled their way.
While it is apparently fun to speculate and quote Cromford and Michael Orr, the bottom line is that none of us can be certain of what values will do. Adding insults to your exchange does not strengthen your point or add to your credibility.
Carry on however you see fit. But as a person that does this every day for years on end, I am not certain what values will do. Really surprised so many here are.

You are right when predicting anything there is never certainty. It is always a mix of probabilities and pure uncertainty. If you approach this the right way and have some good intuition you can have some well-founded ideas about future market directions.
One thing I feel particularly confident about is that there will be no crash, just like asufan said. The RE market is connected to the consumer spending cycle which lasts 15-25 years. The last two bottoms were in 1993 and 2012. So we have many years left before another crash and will have much higher values before it will hit. As we go through normal, business-investment lead recessions we can have a couple slow or slightly negative years but otherwise it will be up much more.

[petlover8]

Originally Posted by SMG

But as a person that does this every day for years on end, I am not certain what values will do. Really surprised so many here are.

We're not. At least not any more or less than you are. The title of the thread is, "Any Guesses On Home Prices". That is exactly what everyone here is doing... Guessing. Based on what they think, along with the facts and reasons they have been led to think that way. Nothing more, nothing less.

[borninsac]

Originally Posted by SMG

I have been lurking on the sidelines the last couple of days, thought I would throw my .02 in. Over the years, I have valued about 8000 properties here in Maricopa County. I do this for various lenders, investors and private parties. I read comments from some of you that seem to know exactly what will happen with property values. When others do not see things the same as you, insults are hurled their way.
While it is apparently fun to speculate and quote Cromford and Michael Orr, the bottom line is that none of us can be certain of what values will do. Adding insults to your exchange does not strengthen your point or add to your credibility.
Carry on however you see fit. But as a person that does this every day for years on end, I am not certain what values will do. Really surprised so many here are.

Your post is like a breath of fresh air here so thank you.

What a difference a day makes in this topic discussion that seems to have taken a political detour to the gutter. There's a different sub-forum named Elections where these comments can better be posted.

[MN-Born-n-Raised]

Originally Posted by SMG

Over the years, I have valued about 8000 properties here in Maricopa County. [/b]

What's your point?

If you read my post, I said the same thing. No one knows for sure but the trends are in the statistics. For that matter, the Chief Economist that I was discussing said the same thing. I'm positive Mike Orr would obviously know he cannot predict the future. We could all quickly pick one of several variables that could spark a slowdown. So where did I say I could predict the future again? I didn't. I'm discussing probabilities and I look at trends. I don't get derailed as easily as others. The thread title uses the word "guess". I would call it an educated guess where people tend on being right more than they are wrong). It's why the world hires "economists" which is vastly different the a part time real estate agents who gets hired to get a market.