Phoenix MLS Predicting Lowest Median September Price in Nine Years (Goodyear: coupons, health insurance)

[Greatday]

Originally Posted by Boompa

The value of the land plus the cost to rebuild it = value

That is ONE of the THREE appraisal approaches to Value - it is known as the "Cost Approach".

The other TWO approaches are: The Market Data approach and the Income Approach.

Residential Real Estate is most often valued by the Market Data Approach - sometimes referred to as the Comparable Approach -

[azriverfan.]

Originally Posted by SOON2BNSURPRISE

I say buy when you are ready and able and for get about anything else. In the old days people bought homes to live in and not as an investment like today. Many times they just stayed in those homes and passed them down to the kids or grandkids. My Uncle lives in the home he grew up in. My grandparents owned it before he did. My great grandparents owned it before my grandparents did. The home has been in my moms family for the past 90+ years. That will end when my uncle and aunt pass away, unless my cousins rent it out. Chances are they will sell it though.

My parents lived in their home in Port Hueneme Ca for 38 years before selling and moving to their home in Surprise over 7 years ago. we still have friends on that same street that have never left. The thought I am passing on is that for many they buy and hold onto a house and make it a home. The truth is that it cost you to move over and over again. That is money you can stick away if you can keep the home you buy and just live in it. Look at people like Warren Buffet, he still lives in the home he bought back in 1958.

There is no shame in renting. Unfortunately, our society has conditioned people to think renting is inferior. It's smarter for one to live within their means and save money. If houses stand a good chance at losing another 10% in value, that is thousands of dollars one can save. What's the harm in renting in the meantime?

People say you are throwing away money by renting but you are also throwing away money by paying 50K more what you would have paid had you waited.

I have a friend who bought a short sale in an upscale area for what he thought was a great deal 1 year ago. Now he regrets paying that because there are better deals on the market today than there were at that time. He bought into the hype that prices were going to rise and felt a sense of urgency to buy.

[Howard Roark]

Don't forget that in most cases, people who change from renters to buyers typically go from small rentals (apartments) to houses with larger square feet. They end up paying more PITIM (principle, interest, taxes, insurance, and maintenance) and buy more furniture to fill the empty space. If they are renting a house with the same square feet and same number of rooms it's a different story, but that is rare. Most cases are where they end up paying more as buyers.

Originally Posted by azriverfan.

There is no shame in renting. Unfortunately, our society has conditioned people to think renting is inferior. It's smarter for one to live within their means and save money. If houses stand a good chance at losing another 10% in value, that is thousands of dollars one can save. What's the harm in renting in the meantime?

People say you are throwing away money by renting but you are also throwing away money by paying 50K more what you would have paid had you waited.

I have a friend who bought a short sale in an upscale area for what he thought was a great deal 1 year ago. Now he regrets paying that because there are better deals on the market today than there were at that time. He bought into the hype that prices were going to rise and felt a sense of urgency to buy.

[Foreverking]

Sold our house a little over 3 years ago in Washington, and have been renting ever since....have watched the homes I would want to buy drop from 290s to the 130s, so if anyone is making fun of renters, Ive made 160K by doing absolutely nothing but let some other dude mow my front yard (yeah the one I share with everyone), let some rental office take care of all my maintenance, pay no property Tax (not in a separate check anyway), pay no home owners insurance. My only gripe is that every once in a while, the jerk down stairs has a TV that apparently isn't very loud it him, and I miss a back yard, but I have a park next door. I'm going to wait until these houses are down to about 100-110K, and, no one here is going to tell me its not going to happen. I remember when my homes I was looking at reached 200K from 290, and they would put the fear of God in me that I had to move now....180...its going to up, better buy now, 150...cant go lower than this, the materials cost more....140...bargins at this price, never be seen like this again in a lifetime. Well unemployment is up, banks aren't lending....demand is down, this all leads to slower buying. I honestly believe even when I buy my home at 110K, Ill be looking at my neighbor's home a couple of years later being purchased at 80K...but I don'[t think I can go another 3 years or so with out owning a house.

[MN-Born-n-Raised]

Quoted from Roberto A. Ribas's Blog | Just another WordPress.com site (He is an investor / Realtor).


Median sales price information for the Phoenix area:
May $130K
June $127.4K
July $125K
Aug (so far, Aug 11) $118K
today, bank owned homes in Phoenix actively marketed are at 7300. Notice how fast this increase has taken place, from just 4500 at the end of April. Typically, when a bank can’t sell a home for a few months, it begins dropping its price, so price drops are a few months AFTER the bank owned home is listed.
We will start seeing even more price drops now."

[MN-Born-n-Raised]

I looked at new mortgage applications (new purchases; not refinancing). Remember, new applications were down 40% a couple months back?? Well, they are up 2% but still at a 13 year low in early August. That means the bulk of the sales are to "investors" (40%+ of Phoenix are buyers are 100% cash). Some will rent, others will rehab or flip, while some will buy as a 2nd property. If those "flippers" toss it back on the market that isn't helping the situation.

Pricing reductions lag softer sales buy a couple of months. It will be an interesting October. If mortgage applications are still soft, the writing is on the wall for for October sales. Inventories will build. Mark Zandi is looking smarter as the year progresses.

[jimj]

From my perspective, we just bought 30 days ago. We got a REO 4 yr old 2500 sqft house for $118k that sold originally for $270k. Could it go down more? Sure but to rent anything close to the same would have cost me more than I'm paying now. I decided due to market conditions and after almost losing the money I put in when selling my last house I didn't want a bunch of skin in the game and wanted to stay as liquid as possible so we went for the 3% down deal from FHA which had some upside because the loan is assumable so when interest rates rise we'll have a bit of an edge if we sell.

Was it the right time to buy? Who really knows for sure but we had to live somewhere and unless we wanted to either store or get rid of quite a bit of our stuff and be squished into an apartment we really had no other choice. I lived in rentals for all my childhood so I've seen exactly what that's like and wasn't really thrilled with the idea to do it again. I saw the landlords that talk a good game but when it came time to do anything they were not to be found or pi$$ed and moaned about how they're losing money or my favorite, put the house up for sale without letting you know until the sign went in then expected you to drop everything to show it.
Yes I know there's laws for tenents and I also know there's many a way around them or the landlord has ways to make it sooo hard for you to stay you leave.
Not for me thanks...

[MN-Born-n-Raised]

That is $47 a square foor got a 2006 built home. You did well!

jimj. What / how much did you have to do it it?? @$47/sq ft, I'd assume it wasn't perfect.

[MotleyCrew]

Originally Posted by EnicAZ

This is correct, as the second leg down of the housing crisis already underway. I have been advising my one client (for now) to wait 6 to 9 months before buying, to see how far prices are going to fall in the Phoenix area.

My office has been analyzing housing and economic data, and the long-term range of falling home prices will be 25-40% from where we were in June. I am hoping for some kind of economic turn around that can bring some permanent jobs back, although I'm not yet sure where that is going to come from.

Hard to buy homes on unemployment and when 1 out of 10 homes are slated for foreclosure the market looks gloomy. But, if you want a home to live in, I think it is a good time to buy. If you need the income, then I would also be buying a rental right now. If you are still delusional and want to flip homes, then go ahead and throw your money away.

[Pirate0202]

We all know the tried-and-true maxim of investing, "Buy low, sell high." The problem is that it's impossible for anyone -- even the experts that have access to all the data -- to determine when the actual bottom of this market will hit. It will almost always be hindsight as to when the bottom WAS, just as it was hindsight when the top of the market was 3 - 4 years ago. However, there is motivation to buy before the lowest low price point is recognizable -- availability of housing will be at it's highest point, so you will have a lot more choices in location, style, amenities, etc. I'm certainly not going to wait until some expert says that we've hit bottom... by then, we will surely already be in the start of an upswing, with the resulting loss of inventory.