It's a bad time to buy a house in the valley

[ShampooBanana]

Originally Posted by jimj

We're in the same basic position as you and are waffling on cashing out our profits while they are there and looking for something else or holding for another couple of years for a possible further gain. It's a tough choice right now, that's for sure! Problem is, as ours rise so do the ones we'd be looking at so it can be a wash unless you build or go for a fixer.

Given the rise in new construction I don't see a house that's currently going for <$300k going anywhere near $400k or higher anytime in the next 10 years. There's just too much available land. Now if water restrictions go into effect and permits are restricted then maybe...
On the other side, I do have a friend who's parents bought their house in Scottsdale 15 years or so ago for $150k and just sold it for 4 million to a developer so I guess it can happen. Man I wish we were "best friends"or better yet brothers!...

You say there's too much available land but that's not true everywhere, especially in the most desirable parts of the Valley. Chandler is almost built out (it will be in 5 years). Gilbert is getting there. Permits have dropped in Gilbert over 2015, which is the first time in a LONG time where that's happened. It already reached "peak growth". Queen Creek is the next Gilbert. There and SE Mesa south of the 60. North Peoria is growing like crazy but will be running out of land closer to the job corridors, also. If you can buy closer to Happy Valley Rd you are golden. Builders are selling like crazy along there. Overall, land supply is not infinite and there are definite constraints in many parts of the valley. It may look like there is tons of available land around Phoenix but much of that is reservation land, preserves, or BLM or State owned land that won't be developed for years if ever. The places with ton's of available land are places like the far West Valley (Buckeye), Surprise, and San Tan Valley that are very far from employment centers and are thus less desirable.

[phx1205]

Originally Posted by jimj

On the other side, I do have a friend who's parents bought their house in Scottsdale 15 years or so ago for $150k and just sold it for 4 million to a developer so I guess it can happen. Man I wish we were "best friends"or better yet brothers!...

I think your buddy was pulling your leg. That scenario is not possible. Unless you forgot to mention they built a 10,000 sqft house on that property before selling.

[asufan]

Originally Posted by phx1205

I think your buddy was pulling your leg. That scenario is not possible. Unless you forgot to mention they built a 10,000 sqft house on that property before selling.

yeah it sounds like someone gave them a story. I was in the Custom Home biz in North Scottsdale in this time frame (2000-2003ish) and the acre+ lots back then were in the $400,000-$1,500,000 range. Less if it needed significant site prep. At $4M today that is a 7,000 SF house in Silverleaf, and no way that was had for $150K in 2002, not even the lot. I suppose this is easily searchable on MLS if he was so inclined. Couldn't have been that many recent sales around $4M in Scottsdale to search through.

[TimtheGuy]

Originally Posted by JGMotorsport64

You take investment advice from MotorTrend?

^^^ that is hilarious.

[jimj]

Originally Posted by phx1205

I think your buddy was pulling your leg. That scenario is not possible. Unless you forgot to mention they built a 10,000 sqft house on that property before selling.

Actually the developers flattened the house, they wanted the land right next to Shea Rd for some sort of school. That's the story I was just told soooo...

[Rogarven]

Originally Posted by wase4711

I think the lenders are moving towards that again; I have already received mortgage offers with just 1% down, so that might be a sign of lax lending rules moving forward...although I do have an 800+ credit score, so who knows...

Exactly, it has nothing to do with "orange boy". Too many people getting into houses they can't afford if even a hiccup in the economy.

[jimj]

Originally Posted by Rogarven

Exactly, it has nothing to do with "orange boy". Too many people getting into houses they can't afford if even a hiccup in the economy.

C'mon, can't you leave the juvenile insults out of a simple conversation about R/E?

[AZJD]

Interest rates are still at historic lows. You need good credit, job history, and you go through the ringer with the mortgage process. Appraisals are conservative, sometime too conservative.

Prices are not back to peak levels and are still cheap compared to any other city in the USA with decent weather.

Supply and demand are in balance.

People aren't buying investment homes with little to no money down.


So yes, it still is a good time to buy.


When I start seeing major red flags, I'll change my tune. But everything adds up.

[wase4711]

Originally Posted by AZJD

Interest rates are still at historic lows. You need good credit, job history, and you go through the ringer with the mortgage process. Appraisals are conservative, sometime too conservative.

Prices are not back to peak levels and are still cheap compared to any other city in the USA with decent weather.

Supply and demand are in balance.

People aren't buying investment homes with little to no money down.


So yes, it still is a good time to buy.


When I start seeing major red flags, I'll change my tune. But everything adds up.

THIS right here...
Thats why we are buying in Phoenix this year, before mortgage rates and values start to take off into the stratosphere again..and, I am pretty sure that there will be a pretty big upturn in prices and mortgage rates in the next 18 months, barring a terrorist attack on US soil, or some other major disastrous world event

Its still a relative "bargain" to buy a decent house in the Phoenix market; we would have been here a year ago, but, its taken some more time for our upside down house in Chicago land to come back in value to the point we could possibly "break even" selling it after living in it for 12 years

[ShampooBanana]

Originally Posted by AZJD

Interest rates are still at historic lows. You need good credit, job history, and you go through the ringer with the mortgage process. Appraisals are conservative, sometime too conservative.

Prices are not back to peak levels and are still cheap compared to any other city in the USA with decent weather.

Supply and demand are in balance.

People aren't buying investment homes with little to no money down.


So yes, it still is a good time to buy.


When I start seeing major red flags, I'll change my tune. But everything adds up.

Yes this. All of this. That and resale active listings have been trending downward for some time, and new home supply has still not caught up to historical building levels. Supply/demand fundamentals are still very positive, and that is only enhanced by positive job growth and net in-migration back to where we were back in the late 90's to early 2000s. The supply of active new home communities is stagnant because builders are having much more difficulty sourcing and underwriting new land deals (because land prices, materials prices, and labor prices have actually outpaced home price appreciation - which has still been very good). Combine that limited supply with all those others factors and there is nothing that would prevent me from buying right now. Heck, median closing prices are still some 60k below where they were at the peak, and that's not taking into account inflation. There still a lot of room to run, and I expect it to for another 2-3 years at least when we might hit a minor recession again (but nothing like what we saw in '08/'09).