Has the bottom hit? (Phoenix, Scottsdale: loans, homes, unemployment)

[twiggy]

Originally Posted by Phoenix lady

I heard Suzy Orman say (maybe 4-5 months ago) that January of 2009 would be the "bottom" and from that point, things would start, slowly, going up in regards to the housing market. Whether or not this is true... She does seem to understand financial issues pretty well from what I can tell from watching, occasionally, her program on MSNBC.

I love Suzy!

[ArizonaBear]

Originally Posted by Phoenix lady

I heard Suzy Orman say (maybe 4-5 months ago) that January of 2009 would be the "bottom" and from that point, things would start, slowly, going up in regards to the housing market. Whether or not this is true... She does seem to understand financial issues pretty well from what I can tell from watching, occasionally, her program on MSNBC.

Interesting: I too am sensing that the first half of 2009 will be the 'true' bottom of the houisng market.

For whatever it is worth: the depreciation in my neck of the woods seems to be slowing down------fast (85257 in S Scottsdale).

Two years ago; the cheapest house here was about $230K-------now, I am seeing some go for under $170K and that is not counting the 'hidden' depreciation of inflation either. Example: a place going for $100K in 2005 should be worth $110K today due to core inflation. Extrapolate that info to other housing values and go from there-------using 3% a year.

[azjack]

"There are way better things to invest in than your house. Buy a house to reside in not as your retirement account. Max out your IRA, 401K, etc. Buy something affordable. Don't put all your diposable income into a mortgage. You'll retire with an old house and no income."

Exactly, max out on all of these retirement vehicles. Heck, save beyond even those limits in index funds.

Buy a modest house if you want. But a modest purchase means your mortgage should be around 3 times your income. Of course, purchasing a house at above historical price norms in the middle of a housing bust could sabotage the plans of an otherwise diligent saver.

Your residence is not your retirement account, but don't let it become an albatross either.

[sheena]

Originally Posted by azjack

Exactly, max out on all of these retirement vehicles. Heck, save beyond even those limits in index funds.

Buy a modest house if you want. But a modest purchase means your mortgage should be around 3 times your income. Of course, purchasing a house at above historical price norms in the middle of a housing bust could sabotage the plans of an otherwise diligent saver.

Your residence is not your retirement account, but don't let it become an albatross either.

Than I have bought a modest house. It doesn't look very modest though

[sheena]

Originally Posted by markas214

Get an 30 year fixed FHA loan. You're in a lot better shape than most who bought two or three years ago.

That's what we are getting.

[nitram]

Suzy Orman, like Dr Phil, is way overrated. Read the reviews about Suzy Orman and her expertise:Amazon.com: Customer Reviews: Suze Orman - The 9 Steps to Financial Freedom

[markas214]

Bump from 6 months ago. I believed $74 a sq ft was near bottom. Many, many nice houses in Surprise, Anthem, Litchfield Park, $40-$74/ft2. Quite a few have a pool. In Maricopa you can buy a greater than 3000 square foot house for $30/ft2. Like this:

46121 W DUTCHMAN DRIVE, Maricopa, AZ 85239**

Beds: 4 Type: SFR Sq. Ft.: 3,740 Lot Size: 1 - 7,500 SQ FT MLS #: 4112199
Baths: 2/1 Built: 2006 $/Sq.Ft.: $31 Entered Date: 12/30/08 On Site: 48 days

List Price: $115,000

[MotleyCrew]

I think every state will have a different bottom point. AZ may recover quicker due to the harsh winters and people wanting to get out of CA. We have seen a lot more activity the last few weeks regarding the foreclosed/empty homes in our development and we now have two new families living in the ones across from us. If you buy now, you may not have the absolute smokin deal if prices drop more, but you will have a deal.

[Ponderosa]

Originally Posted by markas214

Most people buy houses to live in. There are way better things to invest in than your house. Max out your IRA, 401K, etc.

Interesting advice from you from only a few months ago from the same time as today's "bump". Had a person bought a house then -particularly one in a nice area - they would have seen (a lot) less drop in value in the real estate than had they put the money in the average 401K. Houses at less than replacement cost, less than 5% interest, and with cash from Uncle Sam sound like one of the safest places to park your butt, your car, and your money right now if someone is fortunate enough to be able to take advantage.

[markas214]

Originally Posted by Ponderosa

Interesting advice from you from only a few months ago from the same time as today's "bump". Had a person bought a house then -particularly one in a nice area - they would have seen (a lot) less drop in value in the real estate than had they put the money in the average 401K. Houses at less than replacement cost, less than 5% interest, and with cash from Uncle Sam sound like one of the safest places to park your butt, your car, and your money right now if someone is fortunate enough to be able to take advantage.

Ah but I lost ZERO in both my IRA and 401k. I invested very, very, very conservatively following the dot com bust. Zero loss!! In fact I'm up about 3% last year. On the other hand I sold a house in '02 I purchased in '97 for a profit of 20 %, bought my current home with a substantial down payment and live in a non bubble area.

Was I a financial genius? No. I just learned following the bust of '01 that the system is a rigged game set up for the benefit of those who control it. The house was a matter of needing something bigger and getting lucky. Comps are selling for around 60-80% more than what I paid. The safest place some say is in physical gold. I have mine in FDIC insured accounts. I am by no means wealthy but I still have everything plus a reasonable amount of interest in all my accounts. Most of my friends are down pretty substantially.

I will repeat my best advice. Put your money in a federally insured account. Do not trust Wall Street. The system is a joke. These financial geniuses bankrupted the world and walked away with billions. They win either way. In fact there is incentive to fail as their losses get covered, socialized, while the profits are private.

My point for the bump of this thread should serve as a warning. I have a very negative outlook for the future. More-so now than six months ago. It is now quite apparent that even our worse case scenarios based on our experiences are irrelevant in relation to the degree of this financial failure. I have been reading some interesting papers on the capitalist system as it emerged from Britain 400 or 500 years ago. People long ago predicted the system would eventually come to complete failure due to the power of bankers and their ability to create money and debt. How an unregulated system would game the financial markets and reap disproportionate amounts of the income gained by increased productivity. Read the comments section of Calculated Risk Blog. There are always great links to obscure economists. It is amazing how our most visible experts have been so wrong while these unknowns have been so prescient.

Finally, I will never say don't buy a house. Use your judgement and get your best deal. Buy a dwelling that suits your shelter needs. Buy what you can afford. Don't max out your credit. Financial security is better than having expensive "things" that depreciate and wear out. We have not hit bottom in the housing market. $20/ft2 is a real possibility in Maricopa. Scottsdale may yet see most properties fall well bellow $100/ft2. Who knows. One thing for sure. Prices are only going in one direction. It's not up.