Do you think the Phx market will pick up next year? (Buckeye: second mortgage, home equity)

[jco]

We talked to a realtor who said that the AZ market goes through nine year cycles and next year's our year. In '06, everyone said the market would pick up in summer '07. I'm not seeing a movement in that direction. What's your educated guess?

[mvimorgans]

Hello!
Well I tend to agree with the information that you have received in that the market will pick up next year. My "test" as it were is in February through May to see what kind of activity we have had. So far it hasn't been stellar with March and May being great "sales" months. As branch manager it has been a rocky 18 months but with a steady climb we should pull out by May of next year(?). Of course with the sub-prime market in shambles which affects a number of buyers the media has posted a lot of "bad press" about our doom and gloom housing market. We could use some positive press from them to "stir" those buyers into buying some of the 50,000+ homes on the market! Take care!

[Nice Nice Baby!]

Nice!!!!!!!!

[foma]

My guess is it ain't going up - at least not in West PHX. There are so many friggin' houses on the market and no end in sight. I'm sure many will beg to differ but I just can't see how a home in Buckeye can cost so much money whenever it's out in the middle of friggin' no where. Call me stupid but I also don't understand how the avg $50K/yr family can even afford a $200K (on the conservative end here) home. We make six figures and still feel that a $200K home is too much considering our other goals of saving for retirement, having kids, saving for their education , going on vacations etc. Are we supposed to give all that up just so we can call a place our own? If that's the case, then no thank you. I'll rent.

[ejk]

Originally Posted by foma

My guess is it ain't going up - at least not in West PHX. There are so many friggin' houses on the market and no end in sight. I'm sure many will beg to differ but I just can't see how a home in Buckeye can cost so much money whenever it's out in the middle of friggin' no where. Call me stupid but I also don't understand how the avg $50K/yr family can even afford a $200K (on the conservative end here) home. We make six figures and still feel that a $200K home is too much considering our other goals of saving for retirement, having kids, saving for their education , going on vacations etc. Are we supposed to give all that up just so we can call a place our own? If that's the case, then no thank you. I'll rent.

I agree that there are way too many homes which are either vacant or on the market, or both. And in my neighborhood, the investors have forgotten about them completely. They let the weeds grow like mad and apparently have a lot of spare cash to throw around, as the HOA continues to fine them all. Out of sight, out of mind? Where are these people? It's disrespectful to those of us who live here.

BUT-- I still think that, except for Verrado, Buckeye is inexpensive and not that far out-- of course I've been jaded by my years of living in suburban Chicago! My husband's job also takes him all over the Valley so location is not a factor for us as much as with some people. He'll be doing the same amount of driving regardless of where we live.

Much of our retirement at this point lies in our home equity-- most of that gain was from before the market took off. Since then it has of course gone up much more but I try not to look at that as it is still so unstable. A lot of people pay the same every month in rent as we pay towards our mortgage, but down the road we can downsize and lose the payments. My parents did that at age 55 and have comfortably lived rent-and mortgage- free ever since. Of course additional retirement funds are important but for us, since we bought at such low prices (both here and our previous home in IL) this is an investment worth having.

[crystalys]

Originally Posted by foma

My guess is it ain't going up - at least not in West PHX. There are so many friggin' houses on the market and no end in sight. I'm sure many will beg to differ but I just can't see how a home in Buckeye can cost so much money whenever it's out in the middle of friggin' no where. Call me stupid but I also don't understand how the avg $50K/yr family can even afford a $200K (on the conservative end here) home. We make six figures and still feel that a $200K home is too much considering our other goals of saving for retirement, having kids, saving for their education , going on vacations etc. Are we supposed to give all that up just so we can call a place our own? If that's the case, then no thank you. I'll rent.

I think you need to talk to a tax advisor or specialist because if you can get a mortgage for as much or a liittle more than your monthly rent then go for it. I am not a tax expert but I do know you can't claim your rent on your tax return. You can claim mortgage interest on a first and even a second mortgage plus all the points you paid to the lender for the loan and it all will reduce your tax liability by quite a bit. If we did not have the mortgage interest to claim then we would owe a whole lot more money to Uncle Sam on April 15th every year. We own a house now and we barely touch six figures and we still have a savings account and a retirement account and we take one long and several short vacations every year. When we bought our house we paid in the upper 200's and we took a first and second. Yes we have kids...(six ) and 2 dogs and 2 cats and a truck and a car and an RV. So you just have know how to budget and look for the sales and bargains. I never pay full price for anything unless of course it is a medical emergency!!! By the way, I agree that we are looking at a slightly downhill market turn until atleast the middle of next year and maybe even into the beginning of 2008. Also note that the trend watchers say that rents are increasing at a steady pace here and condo conversions are still frequently happening so there are even less rentals out there.

[ibarrio]

If you are making six figures and cannot afford a 200K home then something is wrong. Talk to a expert and tighten the belt.

[Jethro]

Heres the problem.

The last few years ALOT of homes were sold to Californian investors.
It pumped up the prices to rediculous levels.

Then the media starts forecasting the impending DOOM of the housing bubble bursting... so all the Californian investors decided it was time to cash out.

The result is a massive inventory of homes for sale, plus all the new builds that spring up everywhere.

There are 20 homes for sale in my neighborhood alone!

We had to sell our house for 20K under appraisal value just to unload it, fortunately we bought it a few years before the big boom so we still made a good profit.
We only had 2 showings in a month and a hlaf though, so we were really starting to sweat!

If you can avoid selling right now then wait it out. It will turn eventually.

[jco]

We've decided to wait until the end of January next year to put the house on the market, but it's scary to think that we won't be able to move because of the market. If it's going to go down even more, I'd rather put it on right now. It's hard to know what the right decision is.

[Jethro]

Originally Posted by jco

We've decided to wait until the end of January next year to put the house on the market, but it's scary to think that we won't be able to move because of the market. If it's going to go down even more, I'd rather put it on right now. It's hard to know what the right decision is.

It might not be a terrible decision to rent it out for a year or so until the market picks up.
We were about to go in that direction before we found a buyer.