Why Are So Many Houses For Sale In The Phoenix Area?

[foma]

Originally Posted by AZ_Engineer

Anyone who thinks you're stupid for buying this way is not someone whose opinion you should value anyway. My bigger concern for you is buying at all right now. Traditionally, the median price of a home in a stable economic environment is around 3X the median income. Right now the median price of a home in the Phoenix market is $275,000 while the median income in Arizona is under $40,000. That's over a 6:1 ratio, or twice what the historical data suggests it should be. Unless we're all expecting our salaries to double in the next year or two, the only option is for prices to come down by around HALF what they currently are. In this case, he who hesitates will make out like a bandit. Keep renting.

At the earliest, it'll be Jan '08 before we buy but realistically, we're probably waiting until summer '08. If median prices can come down to $200K (that's what we're basing our down payment on!), I'd count my lucky stars but until then here's to hoping. Cheers!

[63ragtop]

Originally Posted by AZ_Engineer

Anyone who thinks you're stupid for buying this way is not someone whose opinion you should value anyway. My bigger concern for you is buying at all right now. Traditionally, the median price of a home in a stable economic environment is around 3X the median income. Right now the median price of a home in the Phoenix market is $275,000 while the median income in Arizona is under $40,000. That's over a 6:1 ratio, or twice what the historical data suggests it should be. Unless we're all expecting our salaries to double in the next year or two, the only option is for prices to come down by around HALF what they currently are. In this case, he who hesitates will make out like a bandit. Keep renting.

While I agree with most of what you have posted, I think it might be more effective to compare the median home price in Phoenix to the median income in Phoenix, not the entire state. Only because I suspect the median income in Phoenix may be higher than the overall state.

I don't know the current data but from 2000 census data reported in the Phoenix Wikipedia entry:
"The median income for a household in the city was $41,207, and the median income for a family was $46,467."

If you pick just Phoenix, the median home price looks more like $225,000 in these graphs:
http://www.arizonarealestatenotebook...-price-graphs/
which is still a 5:1 ratio, which is problematic for most people.

foma - Stick with your plan of 20% down and a fixed-rate mortgage. Speaking from experience, buy far less house than you can afford if possible. I've owned 2 houses and both times we bought for about 50% for we "qualified for". Make extra principal payments if possible.

[foma]

Originally Posted by cheerytime

I used to think prices would come down, but they really haven't. In our area since we moved here a year ago they have gone steadily up, and even now they are more then they were then. I'm ready to buy this summer. No more waiting. All the investors are scooping up houses and they will be the winners when the prices climb next year ... and they will!

Well heck, I guess I'm going to rent forever then!!! I guess all those hard working folks making 40K-60K per year with 2.2 kids can kiss homebuying goodbye, too!! Sigh.

[sheena]

Originally Posted by cheerytime

I used to think prices would come down, but they really haven't. In our area since we moved here a year ago they have gone steadily up, and even now they are more then they were then. I'm ready to buy this summer. No more waiting. All the investors are scooping up houses and they will be the winners when the prices climb next year ... and they will!

What part of the Valley are you in?

[MontanaGuy]

My house has been for sale for about seven months now and it's extremely slow. My realtor tells me there's at least an eight month inventory of homes on the market so it's a very bad time. People are still moving here and buying homes but the housing market is bad all across the country. I just retired so I'm moving to Nashville because I'm interested in music and I'm a guitar player. I still really like Phoenix and think the climate is great. I just like a change of scenery every few years. I think this would be a great time to buy a house in Phoenix because it sure is a buyers market. Also, prices and dropping, I've lowered mine three times.

[sheena]

Originally Posted by MontanaGuy

My house has been for sale for about seven months now and it's extremely slow. My realtor tells me there's at least an eight month inventory of homes on the market so it's a very bad time. People are still moving here and buying homes but the housing market is bad all across the country. I just retired so I'm moving to Nashville because I'm interested in music and I'm a guitar player. I still really like Phoenix and think the climate is great. I just like a change of scenery every few years. I think this would be a great time to buy a house in Phoenix because it sure is a buyers market. Also, prices and dropping, I've lowered mine three times.

I guess your not in that area where they are appreciating. I wasn't either. Gilbert and Chandler must be the only slow spots.

[topjimmy]

Real estate bust. It's a good time to buy.