My neighbor just listed their home for $170K (Phoenix, Scottsdale: short sale, real estate)

[Dbacksfan1]

Originally Posted by Beena

Wait 2 years to sell? Wow. That house won't be 170 two years from now. It will be considerably less. And suppose 4 years from now it bottoms at 120? We may hover around the bottom for a couple of years before we return to normal appreciation of 3% per year.

Do the math on that. 220 is a lifetime away.

Let's hope this isn't the case for the bottom price. My wife and I have been investing aggressively in rental homes in North Scottsdale, where you can pick up foreclosed/short sales for $165-180,000 right now. In any case, I suppose we're not seeing negative cash flow, but the rental rates need to stay reasonable, as do future valuation expectations.

[Finger Laker]

i really don't see the bottom declining as rapidly as it has - i think the depreciations are spreading around the valley, but all in all I think a lot of the sinking is stopping as foreclosure properties are getting removed from inventory

these units are starting to sell and the numbers on your cookie cutter average home are trending positively - as long as there isn't another big foreclosure bust stabilization should start

however, the economy is a little shaky and employment changes could lead to more foreclosures

comps do help set the market for current inventory as many people see that a house with XYZ sold for $180k so I'm not going to pay more than $180k for something similar ......... a lot of this is driven by foreclosed & distressed homes - at this point banks are just looking to get anything back and move the house off their books, as quickly as possible driving prices down

unfortunately I don't see a return of traditional supply and demand until the foreclosures clear out - even then it may be hard to hit the numbers of a few years ago as so many more units have been built and it isn't the situation where you have a very high rate of migration coupled with heavy investor speculation to fuel demand on what was a more limited number of homes

even with that I have a hard time believing homes are going to stay at pre 2003 / 2004 prices for a long time even though they probably won't creep up to to the 2005 & 2006 prices anytime soon

and for the record I think it's perfectly acceptable to be upset at the current conditions and the poor predictiments that they put everyone into

[altus2006]

Originally Posted by Dbacksfan1

My wife and I have been investing aggressively in rental homes in North Scottsdale, where you can pick up foreclosed/short sales for $165-180,000 right now.

Are these very small condos that you are buying for these amounts? I haven't seen anything in North Scottsdale as far as houses go for much less than twice of those amounts, and those would be old and in need of repair.

Maybe we are just looking in the wrong places.

altus2006

[ArizonaBear]

Barring something catastrophic happening to the economy---------I suspect we are near the bottom of the housing market crash. Maybe another 10% drop in real value (not counting inflation) and that will be it.

[sassieb75]

Originally Posted by azcater

Sassie, I can understand where you are coming from... get this.. our neighbor just listed their house for... wait for it... $545k. I almost choked when I saw the flyer. They are doing FSBO but have a realtor in the family that is helping them. I was thinking.. "are you insane, there is no way your house is going to sell for anything close to that" I'm irritated because it means the house will be on the market forever with drivebys all the time and then more then likely because they won't reduce the price, it will turn into a rental.

LOL...I totally get it! You are on the "other" side of frustration than I am. I just wonder what it the Heck people are thinking! We just re-fied, but before we did, we took a big long look at putting our home on the market but we just knew it was a crap shoot! I didn't want to have my house available at the drop of a hat when my kids are home all summer and therefore it just doesn't stay as clean as I like it. Not to mention just not knowing if it would sell at all. I didn't want to deal with the roller coaster!

[sassieb75]

Originally Posted by Beena

Ummm....I think I am going to ignore this last post :0 Sberdrow is either a flipper and proud of it or not a flipper and making fun of flippers. As we all should.

Wait 2 years to sell? Wow. That house won't be 170 two years from now. It will be considerably less. And suppose 4 years from now it bottoms at 120? We may hover around the bottom for a couple of years before we return to normal appreciation of 3% per year.

Do the math on that. 220 is a lifetime away.

Although I don't agree with you on the depreciation, if that is the case then we will wait 5 years or however long we have to. Im NOT taking a loss on this house! Another home in my same neighborhood just sold in June for $225K. I have no real reason to sell unless my husbands job transfers(which that isn't likely)so Im not in any hurry. I'd like a bigger home but this one will do for now! Also, my home is bigger and much nicer than our neighbors!

[Dbacksfan1]

Originally Posted by altus2006

Are these very small condos that you are buying for these amounts? I haven't seen anything in North Scottsdale as far as houses go for much less than twice of those amounts, and those would be old and in need of repair.

Maybe we are just looking in the wrong places.

altus2006

You need to be working with the banks, and no we aren't finding many condos in the north part of town. But we own a few in central and south Scottsdale, where we've been able to use a totally different investment strategy with the help of Section 8 (otherwise, the prices are tough to cashflow).

That said, I'm awaiting much more significant downturns in the condo market here. The sales prices are still prohibitive for investors in many locations, which should not be the case (hence, no sales).

[Dbacksfan1]

And by the way, I don't recommend rental investments for novice investors. Many have learned recently about the associated risks, which will continue to increase. I'm currently focusing efforts on low-risk investments by bringing innovative strategy to high-barrier locations.

With the rental market's uncertainty, I highly recommend looking into government assistance programs for stability (and of course, less sexy returns). And we're back to common sense in business - no more easy deals. Finally!

[altus2006]

Originally Posted by Dbacksfan1

You need to be working with the banks,

That said, I'm awaiting much more significant downturns in the condo market here. The sales prices are still prohibitive for investors in many locations, which should not be the case (hence, no sales).

How are you working with the banks? I am under the impression that the banks are putting all of their REO's in MLS or are selling in bulk to investors. The repos showing up on the daily MLS sheets are underwhelming me.

If it is a matter of calling up the bank foreclosure department, I will start dialing.

The sales prices are prohibitive in many areas, especially for the quality of the house (or lack of quality).

altus2006

[Dbacksfan1]

You have to be okay with damaged goods. Most of the tract home communities in Scottsdale faced the same problems as other areas. People got desperate and started trashing their homes on the way out. With a decent repair person, you can cover up the defects - at least well enough for rental purposes - very cheaply.

And to bring this full circle, people need to look at the quality of their investments when seeing such wide varieties in pricing. You will probably need to pay for repairs if you find a great bargain price. I wouldn't buy anything without knowing a good inspector and repair person, and then build a pro forma to represent the total investment and all anticipated cash flows (plus reserves for unanticipated expenses).