Housing prices-high or low?

[Captain Bill]

Originally Posted by Ponderosa

Not yet. Give it time. Anyone who has been in Phoenix for a few years knows what happens to low priced neighborhoods. If I were a realtor, which I am not, I would not advise a client to purchase a cheap house unless a) it's all they could afford or b) it's for rental/rehab. The exception might be if the overall neighborhood is selling for much more and the house is a dump that needs fixing up to bring it to the neighborhood standard. Buying in a future slum is no way to save. Buy the best house in the best neighborhood you can afford.

I don't think azcater was advising people on where to buy; but rather making a point that there are some very low priced homes in good neighborhoods. S/he apparently works the QC area and is familiar with what's happening there, and feels comfortable telling people about QC.

I agree with Ponderosa that a realtor should not advise a client to buy a cheap house. I take it a little further and believe that it's not a realtors position to advise the client on what price to buy, no matter what the client can afford.

My personal philosophy is the same as Ponderosa, and that is to buy the best house in the best neighborhood you can afford. I've always done that.

However, there are different philosophies that others use. One is to buy in a good neighborhood but not the most you can afford, and pay at least 50% down. And there are others. So each person has their own method of determining what to buy.

As a realtor, we have to understand the clients needs and work with those.

The realtors job is to learn what the client needs; the comfortable price range for the client; what type of community the client desires; the geographical location the client prefers; and then help the client to find that particular house and negotiate the best price possible for it; and to make sure that the client is protected all through the escrow process.

It is surprising today how many houses there are in good areas that are in the $100k range. There are several in Gilbert, with one being in Val Vista Lakes at $140k.

[azcater]

He's so hott... I totally agree with you.. you couldn't pay me to live out there because it's just too far for me, but it's a perfect neighborhood for others. And first time homebuyers that can only afford an 80k house, it's a great area, if you don't mind a bit of a commute. Oh and I will mention again, it's only 16 min off the US60 to Johnson Ranch via Ironwood, not too bad! Now, if you commute to Scottsdale or Phoenix.. tack on another hour. LOL!

I actually would prefer not to focus on the queen creek market, but that's where buyers want to buy, so that's where I live now. :-) I'm just trying to educate those that are assuming that if a house is under 100k it's trash and no one could possibly want to live there, that they are mistaken. That's all I'm trying to do.. nice modest homes do exist in that price range and many are happy to snatch them up (heck look at all of them with multiple offers!) I'm not seeing nearly as many that are trashed. And Captain Bill.. I can't believe the prices in Val Vista Lakes, if I could get out from under my own house..I would love to live there, there are some amazing deals right now! We almost bought a house on Azure Sea Lane back in 07, but they wouldn't take our offer.. wow that was a blessing in disguise at the time!!

[Ponderosa]

I was trying to get to the OP's question of why anyone would buy at 200K when there are so many "good" houses at 70K. A scattered diamond in the rough is one thing, a neighborhood of 70K homes is something else. It may not be politically correct, but consider who is buying in the 70K neighborhood. Is this your demographic, your income, job or educational level? The first mistake I made when I moved to Phoenix was to buy a home in south Phoenix because it was "the same house/same builder as the ones in Mesa" - but a lot cheaper. Within months the neighborhood assumed the character of what it was - a low rent, low income district. I sold, made money, and got out, but I would have made more and had more pride in ownership in the Mesa house. Of course, the Mesa neighborhood eventually went to seed as most hoods do around here except at the higher end.

If all the houses in an area are cheap, then today's bargain is tomorrow's headache (or nightmare). People coming here should appreciate that looks can be deceiving and face up to what "affordable" housing has meant over the years in the Phoenix area (south Phoenix, Maryvale, Glendale, Mesa etc, etc.) Don't delude yourself that your experience will be different. Past is prologue. If you decide to buy in a cheap area, then do it with both eyes open. That's my story and I am sticking to it.

PS: I will allow that some of these far-flung burbs - QC, Tartesso - that are priced cheap may be an exception to the decline rule. But the Sundance area of Buckeye is already well on the way downhill (IMO) and that could be the model they follow too. And I wouldn't buy in parts of Goodyear that I had thought were nice just a couple years ago. Time will tell.

[horseplayer]

I've seen three million Dollar rowhouses that smelled like dog urine and I've seen a 47,000 Dollar house with multi-million Dollar views.

From an investment standpoint; it pays to be at the bottom of a good neighborhood. A fancy house in an iffy neighborhood makes no sense. Wages in Arizona stink--I would avoid higher priced areas.

[observer53]

Originally Posted by Ponderosa

I was trying to get to the OP's question of why anyone would buy at 200K when there are so many "good" houses at 70K. A scattered diamond in the rough is one thing, a neighborhood of 70K homes is something else. It may not be politically correct, but consider who is buying in the 70K neighborhood. Is this your demographic, your income, job or educational level? The first mistake I made when I moved to Phoenix was to buy a home in south Phoenix because it was "the same house/same builder as the ones in Mesa" - but a lot cheaper. Within months the neighborhood assumed the character of what it was - a low rent, low income district. I sold, made money, and got out, but I would have made more and had more pride in ownership in the Mesa house. Of course, the Mesa neighborhood eventually went to seed as most hoods do around here except at the higher end.

If all the houses in an area are cheap, then today's bargain is tomorrow's headache (or nightmare). People coming here should appreciate that looks can be deceiving and face up to what "affordable" housing has meant over the years in the Phoenix area (south Phoenix, Maryvale, Glendale, Mesa etc, etc.) Don't delude yourself that your experience will be different. Past is prologue. If you decide to buy in a cheap area, then do it with both eyes open. That's my story and I am sticking to it.

PS: I will allow that some of these far-flung burbs - QC, Tartesso - that are priced cheap may be an exception to the decline rule. But the Sundance area of Buckeye is already well on the way downhill (IMO) and that could be the model they follow too. And I wouldn't buy in parts of Goodyear that I had thought were nice just a couple years ago. Time will tell.

From what I hear, Maricopa is also changing (and not for the better, long term) with the cheap sales and rentals that are going on now, and have been for several months.

[Xica_da_Silva]

I totally agree with Ponderosa. You need to consider not just what the neighborhood looks like now, but what it will look like in the future.

It takes a certain amount of money to not just own a home, but to maintain it properly over the years. When gas prices hit $5 a gallon, and people who bought a zero down SUV start commuting into downtown Phoenix from all these far-flung areas, for a $10/hr job, something has to give. I am also greatly concerned that at some point, with all the money that's being spent by the government right now(whether necessary or not, I don't know, we'll see if it works), we're going to hit an inflationary cycle that's going to make it difficult for all of us; those who live in low-income areas are really going to be strapped for money once that happens. The yards, the pools, the carpets, tend to fall apart.

I would even go so far to say, that, even under $200,000 in central Phoenix it's tough to find something that doesn't require plenty of upgrades, or that is in a non-rough area. It's like this in Central Phoenix:

$200,000 in really nice neighborhood= house needs major repairs to get it up to level of rest of neighborhood(=putting at least $20,000 into repairs)
$100,000 in really nice neighborhood= house should be torn down and rebuilt, and is on a tiny lot, may serve as a cheap rental property someday.
$100,000 in marginal neighborhood= house is still a dump, but may not need to be torn down, since it's close to downtown, maybe investors will bite on it as a long-term long-shot.
$200,000 in a marginal neighborhood= a lovely and sprawling mansion, but surrounded by at least 3 crackhouses.

[azdr0710]

everybody:

please, PLEASE, don't forget the old basics.......

1. you get what you pay for
2. location, location, location
3. supply and demand drive the market
4. buy the cheapest house in the best neighborhood
5. put 20% down

anything I'm forgetting????

[horseplayer]

We may not see the 5 per gallon gas chasing the 10 an hour job this Summer; but we may see the 3 Dollar a gallon gas chasing an 8 Dollar per hour job. Same result: it doesn't add up for the sprawl.

6. Pay more to live in a better school district. Difficult in Arizona, due to lack of good schools, and risks of boundary changes. I would look for a basic house in the Madison School District or Arcadia as opposed to East Valley or the Far North.

[LeprechaunSean]

I'm interested in the litchfield park/palm valley area north of I-10, as I'll be working in Tolleson, and I see tons of good deals there, and I hear lots of good things about the area................I guess I'll just have to see for myself this week

[horseplayer]

I would look at greatschools before I looked at the houses themselves. Let us know.