Has the bottom hit? (Phoenix, Scottsdale: buyer, income, property taxes)

[Captain Bill]

sh9730, you're correct that there are these sub markets that are all different and it's important to check them. The area CMI gives the large picture of the trend so one can forecast, using some other criteria in conjunction with this, where the overall market is heading.

I noted a few of the sub markets:

Queen Creek’s current CMI is 152 showing an under supply
Gilbert is 77 which is an over supply
Phoenix is 69
Scottsdale’s current CMI is only 36.6

And one can see a vast difference in Scottsdale having over supply while QC has reached an under supply.

CromfordReport.com has about all the statistics one could want. Some are free and the others require a subscription, which is a reasonable rate, and certainly cost effective for anyone wanting to know what's happening in the market and sub makets and the tools to forecast market turns.

Sheena, it could be that the house was listed too high for too long and now it's gone stale, and as you know if one has been on the market for a long time many people won't look at it because they think there is something wrong with it.

My REO across the tracks had the price about 20k too high but they lowered it within a couple weeks and it sold pretty fast after that. I think I put it pending after 44 days. In the range just under $300k if the price isn't right on in the beginning it's difficult to get an offer.

[kashleen]

What is Chandler's?

[w1ngzer0]

I'd love to buy one of these houses where i pay 400-500 for a mortgage, but that's not going to happen until im done with school, when they're back to 8% interest and 500,000 for a 1bd house, because of all the people that treat their home like a commodity.

[Captain Bill]

Originally Posted by kashleen

What is Chandler's?

Chandler is 61.4

[Howard Roark]

Seems that way with the S&P 500 up 24% from its 2009 low. All the financial television talking heads saying that it bottomed and boom times are back.

But they forgot Credit Suisse's warning about Option ARM resets starting to go full force April 2009 (now!) and going on another two years at higher levels. Can you say vast more foreclosures and job losses? Mostly in California but will severely affect Phoenix and Las Vegas. Why? Pressure for lower rents in California and lower housing prices will make "flyover" places such as Phoenix and Las Vegas not as attractive based on price. That is, more affordability, superior climate in California, better schools, and more varied industrial base will attract people from Arizona and Nevada to California.

We have a minimum of two years before we see the bottom. The Option ARM crisis and ALT-A crisis will duplicate the damage that the subprimes did in 2007 and 2008. Deep recession follows 2008. So I would expect a deeper recession in 2011 or 2012 compared to 2009.

If you are not into T-bills, better get on the wagon and buy them. You will get bargains in house shopping. I only want one house. Arizona is my base and has a great airport. However I tend to work and have fun in other places than Phoenix (too police-state social conservative for me).

Originally Posted by ArizonaBear

Going out on a limb here: barring a double-dip recession; I truly think the economy bottomed out this past February.

[Howard Roark]

If you accuse me of trying to frighten you, then you are right.

60 minutes episode, subject: Option ARM and ALT-A resets. Aired in December 2008. Summary, the next three years is the mother of the foreclosures to cause much further price drops in real estate:

Singapore Watch » Blog Archive » Alt-A and Option ARM - the 2nd wave after Subprime?

Note the comments section below the 60 Minutes video on that link. One commenter with supposedly good credentials says you have to also add small businesses to the home buyers who took out Alt-As and Option ARMS.

In the video, the Credit Suisse representative ends up being optimistic on stocks. He thinks 50% stock drop from the peak factored in the real estate crash. I'm not so sure. I think this 24% bear market rally will be cancelled out and we will see new 2009 lows, and maybe into 2010.

Also, note this: Credit Suisse sees what is coming the next 3 years. Could go into 4 or 5 years. Someone sees it coming. Millions of 60 Minutes viewers that Sunday in December 2008 sees this coming but most of them of course forgot about that segment and returned to fiddling.

[nwlv]

I often wonder about this. The media are always talking about resets in one form or another, which is usually very negative. They fail to mention that some of the highest rates would be 6 mo. LIBOR + 6.
The interest rates are still reasonably low for even those with poor credit. I looked at about 50 notes in Phoenix a few months ago. All were foreclosures, 3/4 were ARMs, 90% of those were tied to LIBOR, with a very high percentage of those tied to 6 mo. LIBOR, which is currently a whopping 1.74%. So what's the deal?

[azjack]

"I often wonder about this. The media are always talking about resets in one form or another, which is usually very negative. They fail to mention that some of the highest rates would be 6 mo. LIBOR + 6.
The interest rates are still reasonably low for even those with poor credit. I looked at about 50 notes in Phoenix a few months ago. All were foreclosures, 3/4 were ARMs, 90% of those were tied to LIBOR, with a very high percentage of those tied to 6 mo. LIBOR, which is currently a whopping 1.74%. So what's the deal?"

Are you asking why people who are treading water financially (or worse) would find a modest hike in their payments to be troubling? Or are you asking why those same folks would find it easier to walk away than to pay an increasing monthly nut for a house that is six figures underwater?

And, of course, at some point these loans re-cast, as well as re-set. Many (most?) interest-only borrowers never had the ability to pay a fully amortizing loan.

[markas214]

Originally Posted by Howard Roark

Seems that way with the S&P 500 up 24% from its 2009 low. All the financial television talking heads saying that it bottomed and boom times are back. ....
But they forgot Credit Suisse's warning about Option ARM resets starting to go full force April 2009 (now!)



Phoenix (too police-state social conservative for me).

They didn't forget. They're just suckering people back in to squeeze even more from the life savings of the middle class to try and complete the trasfer of wealth to the top. The 400 richest Americans own 22% of all the wealth in this country. Double what it was ten years ago. I guess greed has no bounds because they want more.

Phoenix is supposed to be a libertarian state. That is a joke. Speed cameras, HOA's, etc. I'm looking for property out in the desert.

[nwlv]

I'm saying that if you look at the rate the foreclosees are paying (or were supposed to have been); it's not high. How many of these resets have gone down? The last ARM I had went from 8.25 to 4.125 one year. Many of the loans i looked at had balloon riders. They were amortized for 40 or 50 years, but the balloon was due in 30. This never became the least bit of a factor.