Multiple Offers on Homes Priced below $350,000 (Maricopa: house, appraisal, office)

[Ritchie_az]

Yeah, $145,000 is just above our price range, but we're also trying to get a house with 1,800 SF or more if we can, which puts Verrado even further out of reach.
Just two years ago we would have had a real tough time purchasing a home in the Phoenix area, all things being equal, so we are excited at the opportunity. Now if we can just get the bank to choose our offer....

[Ritchie_az]

We (finally) had our offer accepted on a home, in Estrella Mountain Ranch (just Estrella now, I guess). There was one other offer on the home, but since we had offered above the asking price, ours was picked. This was the fifth offer we had placed on a home.

[Rick Lee]

We've had seller-accepted offers on two places for over three weeks now. No word from their banks yet. Both are short sales. I'd be overjoyed to be moved into a new place by Xmas.

[Ritchie_az]

The home we're purchasing is bank-owned, so we should have the keys early September. (It's nearly turn-key, too!).
Hopefully, all works out well with the short sales for you. I know those can be hit or miss.

[Boompa]

This multiple offers thing is a scam. If it was a used car the dealer would have to post "only one at this price" on his ad. This low balling should be illegal. They really aren't interested in someone with cash, looking for the wannabe speculators who are looking to score on margin. I hate to tell you, theres still another downward bump coming, especially in the West Valley.

[bobhertzog]

Awesome Post! I've noticed the same things lately, and have blogged on it as well. Buyers are seeing a 20-60% reduction in price, if they have the patience to wait for a short sale. Well Said!

[Ritchie_az]

The market fluctuates. Saying that another downward bump is coming is like saying another winter is coming.
The reason there are multiple offers on these homes is because the value dropped severely on the homes at the bottom end of the market. Once people saw this--investors of different kinds, first time home buyers, and those who were previously priced out of the market--they realized that this is a unique opportunity. So a large group of people nearly all at once decided to buy a home.
That's the boat I was/am in. I was one of those "previously priced out of the market." This opportunity couldn't have come at a better time for me (as I'm being transfered from Tucson to the Phoenix area in October). And now I'll be moving to Estrella Mountain Ranch, a beautiful community that my young children will love growing up at.
Once the prices start coming up at the bottom end of the market--and they already have started to--the demand will begin to drop. But as surely as winter turns to spring, at some point the value on all the homes in the Phoenix market will begin to rise.

[badamson]

A temporary bubble is being created by the $8,000 tax credit. They are basically paying people to buy houses. Who will be buying next year when this promo is over and interest rates start shooting up? The idea that "homes under 350k are getting multiple offers" is not something I have seen much of. Most of the properties I have been following have been on the market several months with no offers and continuous price drops. Real estate agents have been saying anything trying to pump up the market for months. They have a vested interest in the public's perception of the real estate market. There are plenty of amazing houses for less than 175k, so buying a house anywhere near 350k seems excessive in the valley. My guess is that these would have to be bought by relocating out of state buyers and investors who are unfamiliar with the city, and who think 300k for a house is cheap based on the areas they are accustomed to.

[Ritchie_az]

All five homes (all under $150k) we had placed offers on had multiple offers. Two had five or more offers. The one that finally accepted our offer had one other offer.
The $8,000 tax credit certainly is one of the fuels aiding this, but that only applies to first-time home buyers (or those who have not owned a home in the last three years). I think once the tax credit is gone and prices at the bottom of the market have increased, there will be fewer first-time home buyers.
And I do believe there are plenty of buyers or potential buyers who are not from the Phoenix area that have no intentions of living in the homes they're purchasing/trying to purchase. I have nothing to back that up, it's just a hunch. I have no problem with that, especially if they're paying cash. But I do hope they can find renters or are paying someone to do the up-keep.

[Balthazar-B]

There are several things driving the buying at the low end of the market: investment groups buying up 200 REOs at a time, the tax credit, fear from the bump up in mortgage interest rates (IOW, people afraid the rates will keep rising and snuff out their last chance at an affordable home)...but one macro-factor is that a great many of these homes are priced below replacement cost. This is a market phenomenon that cannot persist (it can last a long time, however, but like an inverted yield curve, it eventually has to revert to rationality). There are reportedly several thousand foreclosures in the pipeline in the Phoenix metro area, so if interest rates don't shoot up dramatically, there will be plenty more chances to buy. But prices at the low end may not erode much from what seems to be the current floor.