It's a bad time to buy a house in the valley (Phoenix: real estate, 2013)

[WSPHXPELON]

Does anyone here think that it is currently a bad time to purchase a home in the valley? I have heard that the current valley RE market is approaching bubble levels and it may be a good idea to wait for the next market correction before making a RE purchase. Probably the consensus is, "That's crazy talk", but I'm sure the same thing would have been considered "crazy talk" back in 2006 too...I'm not here to argue my opinion one way or the other, just looking for opinions of others.

[thinkalot]

Loans aren't as easy to get today.

[wit-nit]

AZ Republic 02/19/2017 Phoenix home values climb....

Phoenix home values climb, but taxes are still wild card

[Hal Roach]

The condo I sold for 42k in 2013 is now worth about 50. 400 meters from northern avenue light rail. Sold for 119 in 2006. A very small sliver is at bubble pricing.

[stevek64]

I think the 1st question before we can answer this is what is one's goal?

If I was an investor, flips, etc.? I wouldn't buy a house in today's market unless I got a house much lower than the price most houses are going for now. This is not 2009-2012 where that game was super easy to get great value/deals on real estate.

If I wanted to live here, planned to stay, and could afford the mortgage easily? I'd buy.

[AZJD]

The market is not in a bubble. Not even close.

Prices still aren't where they used to be. Loans are only given to highly qualified people. Supply is good. Demand is high because Phoenix valley is the most affordable large city in the USA that has decent weather.

If you think Arizona is expensive, you'd never cut it in a real city like LA or SF.

[Minntoaz]

I mean I'd say it's not a bubble in the valley but in many parts of the US it is going in that direction. I think there is oversupply and that is the only saving grace from the Valley being much higher.

[MN-Born-n-Raised]

For the vast majority of the housing market, people buy "payments". So when interest rates are low, people who really have no business buying a larger, nicer home, finance with long term mortgages to strap themselves in assuming their wages are going to go up. If the cost of living is lower, then normally the average wages for most people are also lower in that area as well. That means they cannot afford as much of a payment and housing is suppressed in comparison to other higher income locations.

Generally speaking, the price of housing will start to rise when you are landlocked. So places like LA, San Fran, Boston, NYC, all are atrociously expensive; there is no more dirt to buy unless you bulldoze something else down. Here in the PHX area, people just move farther out and more people arrive (population growth). So there is no pressure of running out of land.

So to answer the question. People should be more focused on the chances of interest rates rising or falling. For that matter, housing prices will follow based on the ease (or difficulty) or obtaining a mortgage. The OP needs to study the future indicators to see if Mr. Tweet will be doing more harm than good (possible recession). In other words, the driving force of housing all ties into the "payment" affordability and consumer confidence. Those parameters will then drive the housing labor supply and material costs too.

I could see housing go either way in the next few years. Up 2-4% or with a stable economy or down 3-4% with a "correction"/recession. Up because of a labor shortage (used houses also track somewhat with new houses especially where there is a lot of available land).

[ScottsdaleMark]

The lack of inventory in the "affordable" price ranges should keep the market propped up pretty well in those price ranges even if there is an economic downturn just because there is such a choked supply and so much demand. There are so many more would-be buyers than actual inventory out there in the starter-home market, and it's been that way for a few years now.

I think mid-market and luxury homes are more prone to interest rates and various market vagaries because there has been and is more supply available in those price ranges.

Honestly like MN said, if I was looking for a home, I'd be worried a lot more about the extra point in interest I'd be paying today versus pre-Election Day than I would anything else. It sucks for those people who maybe were expecting one thing to happen and then the November surprise and interest rates shot up on them. But, interest rates are still pretty low by "historical" levels although the 21st century sometimes seems more and more like a new epoch in terms of expected growth rates, and I kind of wonder if we'll ever see 20th century-level GDP growth rates in this current generation.

As we've seen with Japan, sometimes you can't create inflation no matter how hard you try...the struggle of the Yen is fascinating...all the tools in the monetary policy toolchest and nothing works. Even domestically, we've been essentially printing money unabated for 10 years now and the result has been near-zero official inflation, although anyone who's eaten out lately has certainly noticed that consumer prices are finally inflating somewhat.

[locolife]

It doesn't feel anything like a bubble to me, something like 18,000 new homes went up in 2016 a far cry from the 100,000 or so that were being built per year in the last bubble.