Moving to AZ to rent & buy later.... (Phoenix, Scottsdale: sale, foreclosures)

[UconnHusky]

I will be relocating from CT to Scottsdale within the next few months. My initial plan was to purchase a home the week I arrive in Arizona, but now my plan is to rent and wait a few years to buy.

I view the subprime mortgage situation as a nightmare waiting to happen, especially for those who purchased a home in the last 3-4 years. ARMS are resetting and foreclosures are going to explode. I'm guessing market prices of homes in AZ will decrease by 25-30% over the next 5 years.

So what are your thoughts?

[aj661]

Originally Posted by UconnHusky

I will be relocating from CT to Scottsdale within the next few months. My initial plan was to purchase a home the week I arrive in Arizona, but now my plan is to rent and wait a few years to buy.

I view the subprime mortgage situation as a nightmare waiting to happen, especially for those who purchased a home in the last 3-4 years. ARMS are resetting and foreclosures are going to explode. I'm guessing market prices of homes in AZ will decrease by 25-30% over the next 5 years.

So what are your thoughts?

I don't think prices will come down that much, but who knows? I still have trouble believing that my home has doubled in value since I purchased it in 2000. I'm anything but an expert on the subject, but my 'gut' feeling is maybe another 10% and then level off for a while.

[sablebaby]

With our continuous growth, I don't think we will be dropping that much. I think we will go back to our yearly average of about 10% appreciation.

[Gretchen B]

I don't think renting for a while is a bad idea - gives you a chance to get familiar with the various areas before you decide where you'd like to buy. Historically, I don't think we've ever seen a 20%-30% drop in prices in a 5-year period, especially not in any metropolitan area that has alot of job availability (like Phoenix does).

If prices start to drop too much more, or if we see a large increase in foreclosures, then you'll see investors flocking back into Phenix to gobble those up. I think the chances of prices falling too much more is pretty slim. As one poster mentioned, maybe 10% max. If new home builds don't get out of control, IMO I think you're probably looking at a pretty steady market by year-end.

[nevercoldcall]

Renting is a great idea to get familiar with the different areas. You have to realize that the Phoenix metro area is huge, and the different areas are HUGELY different - moving 10 miles can be like moving to a different state. Take a year of renting to find out what you like, then decide where to buy.

[jlhct]

Originally Posted by UconnHusky

I will be relocating from CT to Scottsdale within the next few months. My initial plan was to purchase a home the week I arrive in Arizona, but now my plan is to rent and wait a few years to buy.

I view the subprime mortgage situation as a nightmare waiting to happen, especially for those who purchased a home in the last 3-4 years. ARMS are resetting and foreclosures are going to explode. I'm guessing market prices of homes in AZ will decrease by 25-30% over the next 5 years.

So what are your thoughts?

I'm leaving CT permanently next week!

Good luck to you!

[gigi927]

The subprime issue is HUGE and shouldn't be underestimated. In some of the outlying areas of Phoenix where you have a greater concentration of inexpensive housing and first-time buyers, it has really affected the market. My parents own a home in Surprise that's currently on the market. It's pretty well priced but other inventory is coming on that is just almost a fire sale because there simply aren't many buyers out there. Why? Because they can't find any lenders that will give them loans at this point. It's really problematic.

I couldn't begin to guess what the price effect is going to be, but I personally think it may take until well after the end of this year to right side this new issue. It seemed that Phoenix was finally coming out of the market downturn, but this subprime issue is sort of placing even more downward pressure.

While I normally don't advocate renting under any circumstances if you're financially able to buy, I think you're well advised in this situation to do exactly what you're planning to do. Good luck with your move!