Is it really a bad time to sell in Prescott?

[Gretchen B]

Originally Posted by LBear

Phoenix, like the rest of the USA, is suffering but I believe that smaller mid-sized towns like the tri-cities are getting impacted harder due to the fact that Real Estate was their #1 source of business/income.

Prescott was built upon Real Estate. That was it's #1 commodity.

Tax revenue is really down in PV & Prescott due to the huge drop in building permits, home sales and people not paying their real estate taxes due to foreclosures.

It would be interesting to get some data on the population. I do remember hearing that they have seen a 10% decline in population. There are MANY vacant homes in PV and Prescott. Seeing all the FOR SALE signs is quite disturbing.

Not all of those vacant homes were owner occupied. Many were owned by investors looking to either "hold and resell" or "fix and flip", who didn't "resell" or "flip" fast enough. In 2004, the home prices in Prescott Valley were very attractive to investors, as we had not yet seen double-digit appreciation. The rush was on as investors saw a golden opportunity. The same thing had happened a couple years earlier in Vegas and a year later in Albuquerque . . . and that same scenario was repeated in other areas across the country. Builders kept building as fast as they possibly could, which is one of the reasons Vegas and Phoenix were hit as hard as they were. Fortunately for Prescott/Prescott Valley we didn't have as many new home subdivisions as a lot of places. Although the real estate market is not rosy here, it is actually quite a bit better than many other places.

As havasulady mentioned, there are good reasons why people are still moving into the Prescott area, and home prices are definitely better for buyers now than they were 2 years ago. Whether or not prices drop further will probably have a lot to do with the economy as a whole. As far as Prescott goes, it will probably always remain a top relocation destination, and that may continue to keep home prices a little higher than in other parts of the state.

[ArizonaBear]

Hang tough: Prescott area folks.........things will improve.

I too suspect the RE market will hit bottom sometime in 2009 and remain there for a few years.

[Ria Rhodes]

"I too suspect the RE market will hit bottom sometime in 2009.."

looks very unlikely

"..and remain there for a few years"

under the best case scenarios.

You are a optimist. I suppose "hope springs eternal"

Any day without the sun burning out or nuclear war is a good day. See, I'm an optimist too!

[Baja Boomer]

Originally Posted by Ria Rhodes

Tell us about the few and far between number of people who were saying these things well before the housing bubble and the mortgage implosions. I don't see anything worthwhile about repeating the "using ones house as an ATM" line as it has already been repeated countless times ad naseum after the fact. It's just comical how much 'after-the-fact' wisdom appears coast to coast as if it's a new insight. Huh! Realtors - the real 'experts in hindsight'.

There were thousands of us trying to warn about the housing/asset bubbles, and I was one of them. And I was a bit late on the scene, not seeing it until 2005. Whenever I brought it up, though, I was laughed out of town. What did a regular Joe (or Joette, lol) like me know, after all? I was just an alarmist, a doom and gloomer, a party pooper. After all, the mouthpieces for the National Association of Realtors and all those Wall Street types were exhorting everyone to buy buy buy, and surely they knew better than little ol' me!

There were lots of Web sites warning about it (The Housing Bubble Blog for one and Mish's Global Economic Analysis for another), lots of economists whose voices were drowned out or ignored by the media, which had its collective head in the sand. It's really not surprising that most people never heard our voices, but it's sad.

This is one time when I am not at all happy to be able to say "I told you so."

[havasulady]

You were right and I heard it too but I decided to ignore it and in so doing have lost $$$$.

Oh, well, such is life.

I do say this. Housing in Arizona will not depreciate that much more. The medium price house is now around $205K. If you allow inflationary costs, costs of material and labor I will be surprised if prices will come too much further. Interest rates on mortgages are what they were in the 70's.

Arizona will always be a retirement haven. The baby boomers are now retiring. Arizona offers low crime, low property tax, home insurance, and all around weather. FL and TX have mild weather but Property tax and insurance is relatively high compared to AZ.
Supply and Demand.

[ElizaTeal]

Originally Posted by havasulady

You were right and I heard it too but I decided to ignore it and in so doing have lost $$$$.

Oh, well, such is life.

I do say this. Housing in Arizona will not depreciate that much more. The medium price house is now around $205K. If you allow inflationary costs, costs of material and labor I will be surprised if prices will come too much further. Interest rates on mortgages are what they were in the 70's.

Arizona will always be a retirement haven. The baby boomers are now retiring. Arizona offers low crime, low property tax, home insurance, and all around weather. FL and TX have mild weather but Property tax and insurance is relatively high compared to AZ.
Supply and Demand.

I like your sunny attitude. I'd like to add, it's a great time to be a buyer with good credit. AZ is a great location to retire. Grow old with me, the best is yet to be. Sometimes I think AZ is a Disney Land for Adults. I'm not retired and I love this place.

[LADY_DI63]

prescott has slowed why down thanks to the bush b-s jobs and gone people moving

it a sad time here

[LBear]

Originally Posted by LADY_DI63

prescott has slowed why down thanks to the bush b-s jobs and gone people moving

it a sad time here

PLEASE....

Leave out the political jabs. The same can be said for the Dumbocrats. Both parties are to blame! Don't kid yourself into thinking that the Democrats are innocent. BOTH parties are guilty.

[esselcue]

Originally Posted by LBear

PLEASE....

Leave out the political jabs. The same can be said for the Dumbocrats. Both parties are to blame! Don't kid yourself into thinking that the Democrats are innocent. BOTH parties are guilty.

Agreed!

[tony soprano]

I sold my townhome in Silicon Valley in September, 2004. I was surprised by the number of potential buyers that asked me why I was selling and where was I going. I gave all who asked the following reasons; I'd been in the home for 8 years and wanted a little change, I wanted to shorten my commute time, and I thought the real-estate market was crazy and unsustainable. In hindsight, not too smart of a sales pitch. Ultimately, my place sold to the first couple who came to look at it, at higher than my asking price. The couple buying put $0 down and actually financed ~105% of the sales price . I have been renting ever since while I decide what to do.

For several months after the sale of my place I would torture myself by looking at the listings in my former townhome complex to see what prices were doing. At the peak, I saw several units identical to mine that listed for 10%-12% than what I sold for. It bummed me out a bit but realistically I don't know why I would have expected to exactly top tick the market. Several years later now I'll check the listings and the identical units are listed at 13%-19% less than what I sold at.

I've been watching Prescott/Prescott Valley pricing for at least a year now. Housing prices in PV have certainly moderated. I'm inclined to think this would be a good time to buy. Yes, prices may go even lower, but just as I didn't top tick my exit, I'm not likely to pick the exact bottom when I buy again. The biggest reason for me not buying in PV at these levels are my concerns with the broader economy. I'd like to think my job is stable but in Silicon Valley, business models can turn on a dime. I'd be renting the PV home out until such time that I could retire. I don't know that I could reliably rent the PV home out at a cash-flow neutral rate. I have to think with all these foreclosures and excess inventory that rents are in the basement.

Sorry for the length of this post. I'm not even sure it's on topic. I guess I just wanted to point out that yes, some people did see this coming. My thoughts are not meant to be a "told you so". I've made some bad RE decisions since the sale of my townhome that keep me humble.