IMO, Phoenix housing price will drop, (Mesa, Carefree: sales, real estate, 2009)

[greenthinker]

Everyone talks about housing price may get stablized. But I just don't see any economic activities can bring momentum into Phoenix economy. And we may see more foreclosures as unemployment goes up. My own opinion only. Housing price is still at 2004-5 level. I agree some good areas are less elastic to economic recession while some areas housing price may drop more.

[MaxPower123]

I keep hearing that a new wave of foreclosures is set to hit next year. Who knows though, I dropped and broke my crystal ball.

[ArizonaBear]

Originally Posted by greenthinker

Everyone talks about housing price may get stablized. But I just don't see any economic activities can bring momentum into Phoenix economy. And we may see more foreclosures as unemployment goes up. My own opinion only. Housing price is still at 2004-5 level. I agree some good areas are less elastic to economic recession while some areas housing price may drop more.

In some areas, perhaps.

My G/F just bought a house that appraised @ about $220K in central Mesa back in 2006--------she paid $95K (including $12K in upgrades/repairs) for it this past June.

Translation: quite a few enclaves here have dipped down to late 1990's price levels.

[Godot]

Originally Posted by greenthinker

Everyone talks about housing price may get stablized. But I just don't see any economic activities can bring momentum into Phoenix economy. And we may see more foreclosures as unemployment goes up. My own opinion only. Housing price is still at 2004-5 level. I agree some good areas are less elastic to economic recession while some areas housing price may drop more.

I would be interested to hear more opinions on this. I'm hoping to buy a home but won't be in position financially to do so until November. What I'm thinking is that currently the market is in an upswing due to it being prime buying time (I read somewhere that April, May, and June are historically the best sales months) as well as the first time home buyers tax incentive. Once the buying season is over and the first time buyers are gone, prices will dip once again.
This scenario is not necessarily reality and somewhat ignores unemployment and the economy as a whole, just a thought that eases my mind about missing the bottom since I won't have funds until November.

[MadlyAlive]

ASU reported last month that we're showing "promising signs".

ASU index shows promising signs for Phoenix-area housing market - Phoenix Business Journal:

[musicforme]

I just closed on an almost 4,000 sq ft house this past Saturday up in Tramonto (I-17 and Carefree Highway).

It appraised at and as a result price was lowered to $250k and is move-in ready. The appraisal came in at $307k for replacement cost and my insurance company thinks it would cost $427k to rebuild.

This house would easily go for $325k to $375k back in the Dallas area where I just moved from.

[altus2006]

The house we bought last November, which was a foreclosed property that the previous owner had trashed, and which required $45,000 to get it back in shape, is an example of what is happening in parts of the metro area.

It was appraised last week so I could get a mortgage put on it and the appraisal came back $100,000 more than the sales price from last year.

The appraisal also says that the values are going back up in my area.

altus2006

[greenthinker]

Originally Posted by MadlyAlive

ASU reported last month that we're showing "promising signs".

ASU index shows promising signs for Phoenix-area housing market - Phoenix Business Journal:

The report only looks at data from housing market. It ignored an important question "Where is the money to keep housing market stay afloat?" High unemployment rate? What is the major industry here? New companies moving to Phoenix?

[Boompa]

A house is worth the value of the land plus the cost of the structure (currently about $86 per sq ft). That doesn't include your own needs but it is a good starting point.

[fcorrales80]

Originally Posted by greenthinker

The report only looks at data from housing market. It ignored an important question "Where is the money to keep housing market stay afloat?" High unemployment rate? What is the major industry here? New companies moving to Phoenix?

High unemployment rate, relative to where? Arizona and especially Phoenix has one of the lowest unemployment rates in the nation. Compared to itself 3 years ago, yes high unemployment as it has risen 3-4% since that time; however, Phoenix' currently unemployment rate sits at about 7%. Nation wide the unemployment rate is inching ever closer to 10%. In comparable cities like Chicago (11.4%), New York (9.7%), Detroit (16%) and so on, our situation is much less dire and we are sitting in a relatively good position. New employment is mainly in sectors requiring an advanced degree; healthcare, nursing, education, financial management, banking (Chase for example), government, engineering, SLIGHT uptick in construction (highly skilled trades), communications, etc. Also, many first time buyers are padding the market with the $8,000 incentive causing many price and bidding wars all across the Valley; this is also true because of foreign and second home investments with record low prices since 2000. Remember real estate is a cyclical beast. What goes up, must come down, and what goes down must come up. This has been the case forever really. These were the cycles experienced during the Great Depression, the financial crisis of the 70's, the 80's Savings and Loan Scandal, the early 90's deflation of American currency, and our current economic recession.

Remember when everyone was mourning the death of the American Dream in the 80's when it seemed the Japanese were buying America bit by bit, piece by piece? Eventually that came to an end, the economy stabilized, American companies and technologies once again started to roll and profit, the price for real estate skyrocketed, and the Japanese stopped buying and started selling and unloading their properties back to Americans. Deja Vu...how easily we forget.