Will Phoenix Housing Price continue to drop? (Scottsdale, Miami: cheap house, neighborhoods)

[markas214]

Originally Posted by finnari

They will continue to drop until all the foreclosed homes are off the market. The good news is Arizona will continue to be a destination for people to move to since the population is ageing. Buying a house right now is a good idea since the drop will not be too much and at some point you will get your money back and then some. Just like the prices went way too high they need to correct before they go up.

NASDAQ was over 5000 8 years ago. Today it's around 1500. How long you are willing to wait should be the big question.

[sheena]

Originally Posted by sh9730

I am not a huge realtor rah rah supporter (didnt use one for my new build purchase recently), but ya know, people DO buy houses even when the market isnt going up for reasons BEYOND financial concerns. Many people LIKE stability and renting and having to move "when the market gets better" is something many do not like to do!!

As such, no matter what the market, some people will ALWAYS be buying. Realtors who honestly (and I have not seen anything that suggest Captain Bill is anything but) help a client who has MADE THE DECISION already to buy a house, find the best one for their needs/budget and navigate those that prefer having someone help them through the process, is not a bad thing.

All Im saying is many people bought homes in 2005-2007 are still very happy they did. Do they wish the value was still in their home as before? Probably...but would they have made a different decision if they could see the future? Some would of course, but some would still buy as they are more concerned about a place to raise their family with stability...even if the asset is worth zero in the end.

Are you kidding? You actually know real people who are still happy they bought a house in Phoenx in 2005?

[dchap480]

Does Fulon Ranch know something about the market that we don't know? I just notice they raised their prices for that master plan community in Chandler. It was only Sept 11 when they sent out emails announcing they were lowering their prices for the first time for that community. Now after 2 months their prices for their homes are taking a hugh jump. Do we have any Fulton Ranch home owners online? How are they as a builder? Are the homes value worth the price they are asking? Do you know why they raised their prices? Thanks

[altus2006]

Originally Posted by dchap480

Does Fulon Ranch know something about the market that we don't know? I just notice they raised their prices for that master plan community in Chandler. It was only Sept 11 when they sent out emails announcing they were lowering their prices for the first time for that community. Now after 2 months their prices for their homes are taking a hugh jump. Do we have any Fulton Ranch home owners online? How are they as a builder? Are the homes value worth the price they are asking? Do you know why they raised their prices? Thanks

The builders have been using this tactic for months to create a false sense of urgency in potential buyers. Wait a week or so and the prices will go back down. Don't bite on the "upward" price trend the builder is suggesting.

altus2006

[ArizonaBear]

Originally Posted by altus2006

The builders have been using this tactic for months to create a false sense of urgency in potential buyers. Wait a week or so and the prices will go back down. Don't bite on the "upward" price trend the builder is suggesting.

altus2006

I tend to agree with your assessment as well-------------especially with our growing job layoffs here.

[Ponderosa]

Originally Posted by dchap480

Does Fulon Ranch know something about the market that we don't know? I just notice they raised their prices for that master plan community in Chandler. It was only Sept 11 when they sent out emails announcing they were lowering their prices for the first time for that community. Now after 2 months their prices for their homes are taking a hugh jump. Do we have any Fulton Ranch home owners online? How are they as a builder? Are the homes value worth the price they are asking? Do you know why they raised their prices? Thanks

Price discovery at work in the new economy. It means that houses sold at the lower prices, so they will crank them up and see what happens to sales. They had a pretty high visibility campaign based on the lowering of prices and it may have been successful. If sales hold up at the new prices, they will raise again; if not they will lower.

[Kevin Beasley]

Originally Posted by FlyGuy_ca

What about buying a place and renting it out (assuming the rent covers the expenses)?

Nothing wrong with that at all- when you can buy and lease out equal to or less than most apartments, anybody notice that rates fell to 5.5 there last week on a 30 yr fixed?

[ArizonaBear]

UPDATE:

I went on realtor.com the other night and received quite a shock. Glanced at housing prices near 12th St/E Indian School Rd and several homes were going for under $75K.

Methinks that housing prices here (factoring in core inflation of 2-3% a year) are crashing down to late 1990's levels. So much for the 'housing boom' of 2003-05.

[Captain Bill]

Originally Posted by ArizonaBear

UPDATE:

I went on realtor.com the other night and received quite a shock. Glanced at housing prices near 12th St/E Indian School Rd and several homes were going for under $75K.

Methinks that housing prices here (factoring in core inflation of 2-3% a year) are crashing down to late 1990's levels. So much for the 'housing boom' of 2003-05.

Properties within a 1/2 mile radius from 12th St and Indian School range from $42,700 to $499,900.

Isolating one property and only using the price, without any details to explain and support the price, can lead one to wrong impressions on what's happening in the market.

In order to know the current value of a property with a given listed price, one needs to have a lot of information, such as:

What is the age of the house
What is the square footage
Does it have covered parking
How many bed rooms and baths
What is the condition
What is the cost of fix up
Is this an REO
What are non REO comps listed at
What are non REO sold prices
What are the REO comps sold prices
What are the REO listed prices
What is the condition of the above comps

That's the sort of information that is required in order to determine the current value of a house.

Here's an example:

I just bought a condo for $22,000, close of escrow next monday.
This month I bought a single family house in a Gilbert golf community for $85,000.
Last month I bought a single family house for $29,000.

What does that tell you without knowing the details of the properties?

Absolutely nothing.

Without more details, one does not know the actual value of those three properties.

I'll provide a little information on the $29k home that explains and supports that price.

I negotiated an excellent price for the property, and wholesaled it immediately at $40k.

It needed a lot of work.

Built 1964
Located in a well kept pride of ownership community in Mesa
Car port
3 bedroom
2 bath
Finished Arizona room (not with permit and in need of repair)
1400 square feet not including Arizona room and another laundry room.
Needs exterior stucco primer and paint and wood trim paint
Needs interior paint and carpet.
Needs new electrical panel and probably interior wiring
Needs new ceiling fixtures
Needs tile replaced in two baths
Needs landscaping
and more

Estimated cost of work about $16-20k

REO sold comps around $65k (require work)
REO listed comps around $63k (require work)
Non REO listed and sold comps, in move in condition, $80 to 100k.

To summarize:

The value of the home in the condition I purchased it was about $49k.

I sold it at a discount to the wholesale price for a quick sale, and so the rehabber would have room for profit.

The after repair value (retail) is around 80-100k so the rehabber has room to do a good fix up and sell at a discount to the retail market and make a profit for his work. If he makes money then he'll come back to me to buy another rehab property.

Most of the homes that show low prices on the mls, which automatically go to Realtor.com, are REO properties, and the vast majority of them need a lot of work. Many of them are trashed with busted out walls, kitchen completely missing, and much more damage.

The REO's that are in move in condition are priced at a discount to retail, but are usually bid up closer to retail.

So one cannot judge the value of a property by the listed, or sold, price. One must know the current condition, the cost of repair, and the comparable home prices and condition.

[Kevin Beasley]

Originally Posted by Captain Bill

Properties within a 1/2 mile radius from 12th St and Indian School range from $42,700 to $499,900.

Isolating one property and only using the price, without any details to explain and support the price, can lead one to wrong impressions on what's happening in the market.

In order to know the current value of a property with a given listed price, one needs to have a lot of information, such as:

What is the age of the house
What is the square footage
Does it have covered parking
How many bed rooms and baths
What is the condition
What is the cost of fix up
Is this an REO
What are non REO comps listed at
What are non REO sold prices
What are the REO comps sold prices
What are the REO listed prices
What is the condition of the above comps

That's the sort of information that is required in order to determine the current value of a house.

Here's an example:

I just bought a condo for $22,000, close of escrow next monday.
This month I bought a single family house in a Gilbert golf community for $85,000.
Last month I bought a single family house for $29,000.

What does that tell you without knowing the details of the properties?

Absolutely nothing.

Without more details, one does not know the actual value of those three properties.

I'll provide a little information on the $29k home that explains and supports that price.

I negotiated an excellent price for the property, and wholesaled it immediately at $40k.

It needed a lot of work.

Built 1964
Located in a well kept pride of ownership community in Mesa
Car port
3 bedroom
2 bath
Finished Arizona room (not with permit and in need of repair)
1400 square feet not including Arizona room and another laundry room.
Needs exterior stucco primer and paint and wood trim paint
Needs interior paint and carpet.
Needs new electrical panel and probably interior wiring
Needs new ceiling fixtures
Needs tile replaced in two baths
Needs landscaping
and more

Estimated cost of work about $16-20k

REO sold comps around $65k (require work)
REO listed comps around $63k (require work)
Non REO listed and sold comps, in move in condition, $80 to 100k.

To summarize:

The value of the home in the condition I purchased it was about $49k.

I sold it at a discount to the wholesale price for a quick sale, and so the rehabber would have room for profit.

The after repair value (retail) is around 80-100k so the rehabber has room to do a good fix up and sell at a discount to the retail market and make a profit for his work. If he makes money then he'll come back to me to buy another rehab property.

Most of the homes that show low prices on the mls, which automatically go to Realtor.com, are REO properties, and the vast majority of them need a lot of work. Many of them are trashed with busted out walls, kitchen completely missing, and much more damage.

The REO's that are in move in condition are priced at a discount to retail, but are usually bid up closer to retail.

So one cannot judge the value of a property by the listed, or sold, price. One must know the current condition, the cost of repair, and the comparable home prices and condition.

Thanks for bringing that to the boards awareness Bill- Most of the REO's Ive seen lately are just that- They are mostly new homes, so have a very nice picture of the front. BUt when you go to show the property. it is a complete rathole inside and back- The REO listers never seem to to take more than one photo of the property, especially if it is thrashed. As prices continue to drop so does the condition of the property.