Housing Bubble? (Phoenix, Yuma: renting, lender, buyers)

[DougStark]

If you're debating the AZ to SoCA move idea, don't forget about income taxes. If you're a high income person, CA ranks at or near the top in the nation. Plus, do you really want Newsom as your Gov? Geez.

[Tall Traveler]

Originally Posted by DougStark

If you're debating the AZ to SoCA move idea, don't forget about income taxes. If you're a high income person, CA ranks at or near the top in the nation. Plus, do you really want Newsom as your Gov? Geez.

To me, it only makes sense if you get paid more for your job or you've already made your money and don't need income.

I used to badly want to live in Socal but that ship has sailed for me and wife wouldn't stand for it in any case.

[Burkmere]

Originally Posted by DougStark

If you're debating the AZ to SoCA move idea, don't forget about income taxes. If you're a high income person, CA ranks at or near the top in the nation. Plus, do you really want Newsom as your Gov? Geez.

Oh, you mean you think the top rate of 13% is high? LOL. Not to mention the millions of hidden taxes and fees and the "in your face ones."

I lived in Northern Cal (Sacramento and then the Bay Area)k for 35 years for my work. Being able to retire a little over three years ago, I decided I no longer wanted to be there, even though I could have afforded to retire there.

It's a failed state, but it does have good weather in many spots. If you don't mind all the other negatives, maybe it'd work for some folks. Don't forget, though, it's turning into a two class state. The middle class is moving out, if they can, or moving to more rural areas. The leaders of the state are now rearranging the chairs and tables on the deck of the Titanic.

Perhaps living in a less expensive rural area is appealable to some. If the highlight if your week is visiting the local Dairy Queen, more power to those folks!

[phx1205]

Originally Posted by DetroitN8V

The $650k hoarder house went under contract after only 9 days. That was fast!

I was curious to see what that house ended up selling for. Looks like it didn’t take long for the potential buyers to get smart and back out.
https://www.redfin.com/AZ/Phoenix/46...m_content=link

[freestoneangler]

Originally Posted by PJSzerz

There was an article in the Republic today with real estate agents claiming that (at worst case), housing prices will flatline in the next year. They claimed (like others) that 2008-2011 was an anamoly and that prices won't fall again.

But with historically low mortgage rates for so long that are now rising, and a lot of people being locked into good rates, doesn't that dissuade folks from moving if they have to give up a (say) 4% mortgage for a 5 or 6+%? Interest rates were 18% in 1981.

Construction is finally matching pace with demand here (and spec building has taken off again). Realtors won't admit it, but there's already been a cooling in the market (as seen by the increase in price reductions and days on market). A lot of these residential developments will take a couple of years to complete.

Are increasing rates along with a potential oversupply of homes (and a lot of other factors like layoffs) going to lead to a housing crash? Do you really feel that homes here will never lose value again?

All of the prolonged quantitative easing to address the last recession has seemed to me to limit the tools available to lessen the impact of the next one.

I feel like even if real estate professionals knew a crash was coming, they wouldn't say so because people would then hold off on buying, the market would be flooded with people trying to bail, and the issue would just occur more vigorously.

It is my opinion that we are at the threshold of another housing bubble. Perhaps not to the extent seen in 2008 but when looking at the crazy price escalations in key markets around the west (Las Vegas, LA, SF, Seattle) they are eerily similar to the run up to the 08/09 crash.


Further, the lending institutions and federal government policies are committing some of the same sins that contributed to the last event. Harsh as it may sound, a good many are simply far too overextended. When we purchased our first home in 1985, mortgage payments representing 25% of your verified household income was considered an upper limit. The years preceding the 08 crash, there were numerous examples of people taking on mortgages that represented 50+% of their "stated, but often never confirmed" income.


Anyway, as we are currently looking into a home buy in AZ, and having lived through and fortunately not lost money in the 08 debacle, I too share your concerns. What I should do is sell our MT house now in the high market, then hang out in our Yuma winter shack until the bottom falls out and pick up a bargain.

[Burkmere]

Originally Posted by freestoneangler

It is my opinion that we are at the threshold of another housing bubble. Perhaps not to the extent seen in 2008 but when looking at the crazy price escalations in key markets around the west (Las Vegas, LA, SF, Seattle) they are eerily similar to the run up to the 08/09 crash.


Further, the lending institutions and federal government policies are committing some of the same sins that contributed to the last event. Harsh as it may sound, a good many are simply far too overextended. When we purchased our first home in 1985, mortgage payments representing 25% of your verified household income was considered an upper limit. The years preceding the 08 crash, there were numerous examples of people taking on mortgages that represented 50+% of their "stated, but often never confirmed" income.


Anyway, as we are currently looking into a home buy in AZ, and having lived through and fortunately not lost money in the 08 debacle, I too share your concerns. What I should do is sell our MT house now in the high market, then hang out in our Yuma winter shack until the bottom falls out and pick up a bargain.

Which could be in a year or could be five years. Plus, AZ is still a relatively low cost state compared to those states folks are fleeing from and moving to states such as AZ so a decline may not happen much in AZ.

[49erfan916]

I think I saw that the East Valley is starting to heat up again as far as home sales.

[Burkmere]

Originally Posted by 49erfan916

I think I saw that the East Valley is starting to heat up again as far as home sales.

Yes, it is. My agent said she's super busy and my lender said the same. I'm glad I bought when I did.

[MN-Born-n-Raised]

Originally Posted by phx1205

I was curious to see what that house ended up selling for. Looks like it didn’t take long for the potential buyers to get smart and back out.
https://www.redfin.com/AZ/Phoenix/46...m_content=link

I bet the bank was the smart one (they refused to give them a loan).

[Sunaimer]

In Seattle, my son couldn't qualify for a loan on his own, so this lender had a new program where, if someone is "gifting you money," they can use that as money to help qualify for a loan. We wanted to help our son with a down payment and/or closing costs, so this was the lender's way of using that money to have our son qualify for a loan. So now my son qualified for a loan he really couldn't afford in the first place. His mortgage payment is a few hundred dollars more a month than he was paying in rent ($1200 rent in Everett) (now approx. $1600 mo. mortgage in Mount Vernon, WA). He could not afford rent in Seattle and the suburbs surrounding Seattle. So now, he lives 2 hours north of Seattle just to be able to afford to buy a fixer-upper home. He is barely making it and if we were not able to to make payments due to losing his job, I can see how this lender could easily end up like the ones in 2008. It's nice that they can help young people by using their family's "gift money" for qualifying for a loan, but, jeez, I can see the same thing happening to people and lenders from 2008. They are creating "unique ways" for people to get a loan. Scary.