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Old 08-12-2008, 09:04 AM
 
Location: SE Arizona - FINALLY! :D
20,460 posts, read 26,278,891 times
Reputation: 7627

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Altus2006 -

Are those experts you reference (Wall Street etc) referring specifically to AZ or talking about the nation overall? In real estate it's all about the location and some areas will recover faster than others - based on things like the strength of the local economy (and in this case the desire of us Baby Boomers to head to a warmer climate). While Florida and Southern California will no doubt take a while to recover (mainly because the prices in those area had climbed so incredibly high) Arizona never reached those kinds of sky high prices and thus didn't have nearly as far to fall in their correction. In fact, compared to here in Seattle Arizona prices always were pretty darned cheap (even at their peak).

I do find it kind of ironic that even as you express doubt about the recovery in Arizona, you are in fact planning on moving there yourself next month - and I suspect you are not alone, thus more or less lending credence to what I just posted. As I said, Baby Boomers ARE heading there every single day and Arizona is almost certain to one of the earliest locations to recover.



Ken
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Old 08-12-2008, 09:31 AM
 
Location: Mesa, Az
21,144 posts, read 42,061,062 times
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Remember though there are a couple of jokers in the deck as well:

#1: with the (rapidly) diminishing number of illegals here; that will free up quite a bit of housing stock-----and keep a lid on housing prices for a while longer.

#2: wages here are a bit weak compared to many other places so; unless said retiring Baby Boomers have additional investment income (which might be impacted by the overall economy)----they will need to remain in the workforce longer hence keeping housing prices (relatively) low.

33: Arizona still has a hell of a lot of open real estate left as well.
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Old 08-12-2008, 09:43 AM
 
Location: Wouldn't you like to know?
9,116 posts, read 17,678,645 times
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Quote:
Originally Posted by LordBalfor View Post
Altus2006 -

Arizona never reached those kinds of sky high prices and thus didn't have nearly as far to fall in their correction. In fact, compared to here in Seattle Arizona prices always were pretty darned cheap (even at their peak).

Ken
Have you actually looked at the avg and mean pricing for AZ over the past 6-7 years? look on the AZ MLS and see the jump from 01-04/05 and tell me again that AZ didn't appreciate way beyond historicals...
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Old 08-12-2008, 09:43 AM
 
Location: SE Arizona - FINALLY! :D
20,460 posts, read 26,278,891 times
Reputation: 7627
AZ -

True enough.

Ken
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Old 08-12-2008, 09:45 AM
 
Location: SE Arizona - FINALLY! :D
20,460 posts, read 26,278,891 times
Reputation: 7627
Quote:
Originally Posted by CouponJack View Post
Have you actually looked at the avg and mean pricing for AZ over the past 6-7 years? look on the AZ MLS and see the jump from 01-04/05 and tell me again that AZ didn't appreciate way beyond historicals...
I never said it didn't do that, just that compared to many areas (here in Seattle for example) prices have always been a bargain - even with the surge in prices AZ experienced (Seattle's was much more - and has MOSTLY held up pretty well).

Ken
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Old 08-12-2008, 09:54 AM
 
Location: SE Arizona - FINALLY! :D
20,460 posts, read 26,278,891 times
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CouponJack -

Keep in mind too that "historicals" did not represent the impact of the largest generation in American history heading into retirment (that impact is just beginning to be felt).

Ken
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Old 08-12-2008, 10:55 AM
 
Location: Arizona
824 posts, read 2,332,214 times
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There are good reasons that some places are historically cheaper than other places. Tons of available land to build on, lower wages, and triple digit temperatures for a third of the year are high among these reasons in Arizona. One can make the same mistake that California specuvestors made when they overpaid for Arizona houses: "This would be $800K in La Jolla", so it must be a bargain.

Quote:
"As I said, Baby Boomers ARE heading there every single day and Arizona is almost certain to one of the earliest locations to recover."
Net migration to Arizona has been dropping for the past couple of years based on public utility data.

And house prices are still dropping, despite the mythical hordes of retirees, Canadians, and others who are just dying to overpay for Arizona housing. They are dropping because loose lending is over and the economy is shrinking. This will take us well beyond erasing bubble gains. Congratulations, REIC.
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Old 08-12-2008, 11:01 AM
 
228 posts, read 593,433 times
Reputation: 157
Poignant, non-locally biased article in CNNMoney today about the Phoenix housing market and the looming troubles still to come. Read here:

The aftermath of the Sunbelt housing bust - Aug. 12, 2008

A quote from the article:

"'I understand why lizards live in sunny Arizona,' sings Robert Earl Keen. 'Why people do and call it home I'll never understand.' Neither will I, but obviously we're in the minority."

Wow. Harsh.

As usual, we're all missing the big picture here. The real current and future problem with the real estate market, as I've stated before, has less to do with the supply and demand imbalance than it does with the current miserable state of the credit and banking industries in the US. As more banks continue to struggle, credit gets tighter, the overleveraged debt burden and spending pullback of the average American continues to weigh on the economy, and fewer mortgage underwriters are willing to back or securitize loans, a huge number of buyers will be- voluntarily or not- removed from the market.

Good point about the baby boomers- but remember, if those individuals can't sell the homes where they live now, in hard-hit places like the midwest and east coast, they're unlikely to be able to pick up and move to the southwest. That situation basically hamstrings the retiree market. Not to mention that in the current banking, housing, and credit crisis, many older Americans on the cusp of retirement are suddenly finding themselves with a whole lot less money than they thought they had.
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Old 08-12-2008, 11:11 AM
 
Location: SE Arizona - FINALLY! :D
20,460 posts, read 26,278,891 times
Reputation: 7627
Quote:
Originally Posted by azjack View Post
There are good reasons that some places are historically cheaper than other places. Tons of available land to build on, lower wages, and triple digit temperatures for a third of the year are high among these reasons in Arizona. One can make the same mistake that California specuvestors made when they overpaid for Arizona houses: "This would be $800K in La Jolla", so it must be a bargain.



Net migration to Arizona has been dropping for the past couple of years based on public utility data.

And house prices are still dropping, despite the mythical hordes of retirees, Canadians, and others who are just dying to overpay for Arizona housing. They are dropping because loose lending is over and the economy is shrinking. This will take us well beyond erasing bubble gains. Congratulations, REIC.
True, population growth in AZ is down the last couple of years (not surprising considering the housing issues the last couple of years). It is still the #2 fastest growing state however so the "down" statistic is "relative" to the boom years that we've just come out of.

Real Time Economics : States' Population Growth Amid Housing Slump

WSJ.com

Ken
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Old 08-12-2008, 11:18 AM
 
Location: SE Arizona - FINALLY! :D
20,460 posts, read 26,278,891 times
Reputation: 7627
Quote:
Originally Posted by borborygmi View Post
Poignant, non-locally biased article in CNNMoney today about the Phoenix housing market and the looming troubles still to come. Read here:

The aftermath of the Sunbelt housing bust - Aug. 12, 2008

A quote from the article:

"'I understand why lizards live in sunny Arizona,' sings Robert Earl Keen. 'Why people do and call it home I'll never understand.' Neither will I, but obviously we're in the minority."

Wow. Harsh.

As usual, we're all missing the big picture here. The real current and future problem with the real estate market, as I've stated before, has less to do with the supply and demand imbalance than it does with the current miserable state of the credit and banking industries in the US. As more banks continue to struggle, credit gets tighter, the overleveraged debt burden and spending pullback of the average American continues to weigh on the economy, and fewer mortgage underwriters are willing to back or securitize loans, a huge number of buyers will be- voluntarily or not- removed from the market.

Good point about the baby boomers- but remember, if those individuals can't sell the homes where they live now, in hard-hit places like the midwest and east coast, they're unlikely to be able to pick up and move to the southwest. That situation basically hamstrings the retiree market. Not to mention that in the current banking, housing, and credit crisis, many older Americans on the cusp of retirement are suddenly finding themselves with a whole lot less money than they thought they had.
Indeed, otherwise Arizona growth would be even greater. Certainly folks who find themselves with little equity (or even upside down) are unlikely to pull up stakes and move, but keep in mind that not everyone is in that position. long-term homeowners will still have plenty of equity in their existing homes (at least in many parts of the country -and assuming they didn't borrow too much from their housing "piggybank"). It's really those who bought in the last few years who are most at risk. That's a minority of homeowners.

The factors mentioned above WILL slow the growth in Arizona, but they will not STOP it.

As I mentioned in a previous post, Arizona is still #2 for population growth.

Ken
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