Quote:
Originally Posted by markas214
Watch the 10 year note. Friday May 22 saw the yield rise 30%. If the US bond market tanks mortgage rates will go much higher. In that case the high end market will drop like a lead balloon. That is where I see the risk as opposed to sub $120,000 (depending on location) houses. $50-80 a ft/sq in Litchfield Park seems like a better bet than $100-150/ft sq in Scottsdale at this point. I see quite a few homes priced around $270,000-300,000 that I'd be willing to buy if I had any feeling of stabilization. We aren't there yet. Still way too much downside in that range.
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Markas, I highly recommend that you, and anyone else who is watching the market for something specific like you are, get a subscription to the Cromford Report dot com. I believe you can get it by the month or an annual subscription which is cheaper. I forgot the rate but it is reasonable, and certainly worth it. The small amount you spend on the subscription may save you thousands of dollars by having current information from people who are neutral on their market stats and reports. Much of the stats are updated weekly, and there is some excellent commentary.
You will see things happening long before anyone else sees them by studying all the available information.
As an example, I don't believe many have noticed that the prices have increased in most areas of the valley. Certainly no one has reported it here.
People are seeing that there is more competition for the bank properties, but that hasn't been equated with the fact that these prices have been rising.
By drawing a trend line on the Scottsdale median price chart I find that on
- Week 5 the median price was $374,734.
- Week 14 was $385,000.
- Week 21 was $395,000.
There were interim periods of higher prices. I drew the trend line from the bottoms of the troughs.
On one of my Gilbert REO listings, the bank had me list it at $255, when I had recommended a lower price. A short sale next door, same model, listed at $245k recently sold for $250. A bank owned, same model, 3 doors away had just listed at $238. That REO wil get multiple offers and sell in the 255k range also, and possibly higher because there aren't any more of these 3100 sf popular models left. The builder has one spec model listed for $265, but I believe that is going under contract.
We got an offer of $239, and the bank held off accepting. During the week we got a second offer; then the first increased their number. Then we got a third offer. Now the bank had me ask all buyers for their highest and best offer; A one shot deal. The h & b was $258 with only $700 concession. So, to my surprise, the net for the bank was above list price.
Valley wide, it isn't until we get up to the $350-400k range that the inventory is above a 6 months supply. On May 1 that supply was 9 months, and down sharply from a 17 month supply in February.
I know that some are believing that the upcoming resets will have a huge negative impact on the market. I believe the impact will be modest and that the current demand for housing in the 200k range, which is the greatest in about 9 years will be more than a balancing factor.
The foreclosure rates for May will most likely be worse than April, and that will certainly make the news, and hit the City-Data forum rather quickly.
However, what will not be reported by the people who report the foreclosure rate, is that the these bargain prices are attracting buyers into the market at a rate that I believe far exceeds the foreclosure rates.
There is also more of the public showing up at the courthouse steps looking for the bargains. And I believe we'll see banks begin to lower the minimum bid prices so they will get sold at the foreclosure auction rather than go through the expensive process of taking it back to be listed as an REO.
I'm not telling anyone that this is the time to buy. That's a decision that only each individual can make, based on their personal needs and philosophy.
What I'm suggesting is a reasonably priced source to gather more current, unbiased, statistical information and commentary that will put anyone ahead of the pack in being able to forecast what may happen tomorrow.
Disclaimer: I am not associated with, nor do I get any financial renumeration from the Cromford Report. I am only a subscriber.
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vicious cycle
Doom and gloom! 
Wait and wait for prices to keep declining - pretty soon buying a car will be a better investment than a continual declining home? 
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