Will Phoenix Housing Price continue to drop? (Winkelman: rent, mortgage)

[gregandvicky]

Originally Posted by azjack

This is simply not true.

Do you really believe that while the rest of Metro Phoenix, the Southwest, and large portions of the United States were creating new highs in house prices through the end of 2005 due to a lending bubble, that Scottsdale, Arizona's prices rose simply because it is just so desirable? Could you possibly believe that? Why are San Diego prices tanking, because it is undesirable?

When all is said and done, will the overall price percentage drops be lower in some Scottsdale zips than in say, Queen Creek/Johnson Ranch? Probably, but that in no way provides even slight immunity to significant price drops in both areas. It is not even an arguable point anymore.

I am in the same area as you. Would you wait longer to buy in Queen Creek, Casa Grande and Anthem Merrill Ranch, or are we near enough to the bottom not to matter much or would I be safer to wait longer to buy??

[azjack]

"Would you wait longer to buy in Queen Creek, Casa Grande and Anthem Merrill Ranch, or are we near enough to the bottom not to matter much or would I be safer to wait longer to buy??"

There is no question about it for me, I would wait (and am waiting) for at least another year (probably longer) before I consider purchasing a house. The ongoing housing bust is the biggest factor, but the related problems in the economy at large are also important. Renting now provides flexibility in an uncertain period. It would have to be significantly cheaper to buy than to rent in order to justify the risks of further losses, and it simply is not.

There simply is no logical reason to think that a price bottom has been reached. Plenty of houses sit unsold at asking prices well below bubble prices. In an environment that requires real down payments and real underwriting, fake bubble house values are utterly meaningless as a reference point.

Some of the parts of Pinal County that you reference are even in more dire straits because they desperately require updates in infrastructure. Promised/scheduled projects in the 5-10 year range will almost certainly be delayed. State, county, and city budget disasters will soon be the newest headline in Arizona and elsewhere. And no, I am not just referring to the City of Phoenix's current record 200-250 million budget deficit. I am talking about shrinking tax revenues slicing budgets by two-thirds or more in coming years.

[gregandvicky]

AZJack

Great post and my sentiments exactly.
Thanks

[markas214]

Originally Posted by gregandvicky

I am in the same area as you. Would you wait longer to buy in Queen Creek, Casa Grande and Anthem Merrill Ranch, or are we near enough to the bottom not to matter much or would I be safer to wait longer to buy??

If you wait longer you'll find the prices of more centrally located homes will become more affordable. I've been watching the Arizona market for one year now. First big price drops were in Buckeye, Maricopa and Casa Grande. Next Surprise and Queen Creek. Now Peoria, Gilbert, Glendale and areas of Phoenix and Mesa are starting to decline significantly. Scottsdale is still holding onto a lot of the gains made in the bubble thus still bubble priced and poised to drop substantially. This is my opinion based on a lot of reading and research. I could be wrong but so far those who were predicting the worst in this whole housing bubble bursting financial crisis have been right on target while those who were calling them crazy alarmists have been dead wrong.

[Winkelman]

Originally Posted by Kevin Beasley

Here is something to consider. I recieved information from a big retail exec that they predict a big bottom by mid 2009 then a sharp upturn then level by 2011 NOw this company paid big bucks for this reasearch, and I know its retail and not realty, but they kinda run hand in hand. It sounds logical to me. Sub prime people should be pretty thinned out by then, and perhaps new legislation around FHA requiremnents will ease the down payment reigns a bit.

Real Estate Agents are the eternal optimists. Any research done before this recent credit crunch and stock market crash would not be of much value.

This seems to be the talking point of realtors I have spoken to of late. Real Estate prices are going to turn quickly so you might as well buy now or you will miss it.

This goes totally against history. If you look at the best historical reference for what happens after real estate prices crash look at Southern California in the 1990's. It took 5 or 6 years for any kind of real appreciation to begin in housing prices. With this crash being much more severe and all the phony loans that fueled it, it may take even longer to rebuild peoples trust in the housing market.

[ArizonaBear]

Originally Posted by markas214

If you wait longer you'll find the prices of more centrally located homes will become more affordable. I've been watching the Arizona market for one year now. First big price drops were in Buckeye, Maricopa and Casa Grande. Next Surprise and Queen Creek. Now Peoria, Gilbert, Glendale and areas of Phoenix and Mesa are starting to decline significantly. Scottsdale is still holding onto a lot of the gains made in the bubble thus still bubble priced and poised to drop substantially. This is my opinion based on a lot of reading and research. I could be wrong but so far those who were predicting the worst in this whole housing bubble bursting financial crisis have been right on target while those who were calling them crazy alarmists have been dead wrong.

As you stated.

Although what did surprise me is that 85018 (Indian School corridor) is holding up rather well according to realtor.com.

[twiggy]

I heard our housing market went up 10.8% in the last 2 months. Did anyone else see that on the news?
Or hear it somewhere else? Or was it a freak fantasy I was having ?

[NiceJohn]

Originally Posted by twiggy

I heard our housing market went up 10.8% in the last 2 months. Did anyone else see that on the news?
Or hear it somewhere else? Or was it a freak fantasy I was having ?

It is a fantasy for sure. Surrounding housing market will keep housing price in your area in check. People are cutting down the spending noew. Simple economic theory.

[Kevin Beasley]

Originally Posted by Winkelman

Real Estate Agents are the eternal optimists. Any research done before this recent credit crunch and stock market crash would not be of much value.

This seems to be the talking point of realtors I have spoken to of late. Real Estate prices are going to turn quickly so you might as well buy now or you will miss it.

This goes totally against history. If you look at the best historical reference for what happens after real estate prices crash look at Southern California in the 1990's. It took 5 or 6 years for any kind of real appreciation to begin in housing prices. With this crash being much more severe and all the phony loans that fueled it, it may take even longer to rebuild peoples trust in the housing market.

Everything is going against history you cant rely on past trends, or historical references. If they lower the interest rate and ease up on loan guidlines, make loan officers owe a fiduciuary to their clients. People could actually afford to buy and even rent them out without a negative cash flow. I've been representing V.A. buyers that are getting 100% loans with closing costs wrapped. I feel like I'm hunting squirrles, and loaded for bear, and my clients feel like a kid in a candy store.

[twiggy]

Originally Posted by NiceJohn

It is a fantasy for sure. Surrounding housing market will keep housing price in your area in check. People are cutting down the spending noew. Simple economic theory.

um, what?