Phoenix MLS Predicting Lowest Median September Price in Nine Years (Gilbert: days on market, landscaping)

[las vegas drunk]

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.

Don't let the detractors put you down. You have been honest with your predictions which will prove correct, so you and I will have the last laugh at all the others when they are proven flat out wrong in the coming years. I am no realtor, but my predictions a year ago in the Vegas forum were correct, and they were the OPPOSITE of the realtors in there since I foretasted a 10% or greater decline which did happen.

[azjack]

"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."

Yes, anyone who uses the renting/throwing line with me instantly loses credibility and I move on to talk to people with some appreciation for nuance. Honestly, you do not even need a dramatic bubble/bust environment to understand that the flexibility of renting makes up for any perceived limitations.

I bought a house with a modest mortgage eight years ago because it was affordable, there did not appear to be a half-decade or more of recessionary forces looming, and I could justify it by the low likelihood of my needing to leave Arizona. While some of those facts still hold true (recessionary forces being the difference), I have lost any desire to even slightly bet on any modest suburban Phoenix subdivision being a place that I would still enjoy living in five years from now. I am more concerned about neighborhood stability than price fluctuation, although both factor in.

[MN-Born-n-Raised]

Originally Posted by 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.

That is certainly a point which many people need to be reminded of (including myself). Q1 2009 had a negative GDP. The bulk of it was in March of -5 percent (estimate). Before anybody questions that number, I physically called THE Economist (Lisa Mataloni's office) who gathers the data in April of 2009.

So in March of 2009, the economy fell OFF the cliff! Then April hit (THE very next month) and they had a 1st time buyers program. There was so much pent-up demand that it spurred a solid year of pricing increases. Places like Goodyear had a lot of foreclosures that were mopped up and those prices are still higher than they were in April of 2009.

Granted the sense of urgency was the tax break which caused people to get into a auction like irrational bidding war. When you take that away, things have floated back down to their normal equilibrium (and falling).

I view that approach as an attempted jump start. It failed. They (the government) might try something again and we could get another surge.

All I can go off is probabilities. I can take the best case and worse case scenario and take my best guess. My best guess says it is going down a significant enough amount for me to wait (at least 10%). I could be wrong. But I am going with the odds. Most don't want to hear about the worst case possibilities....

[Zippyman]

Originally Posted by Ponderosa

The ASU moron-professors apparently didn't get the memo that we are in a deflationary spiral.

Premium gas is $2.87 a gallon even with significantly reduced consumption.

I went to McDonald's last week and a Quarter-Pounder with cheese is now $3.25.

Deflation??

I'll believe it when I see it.

[Howard Roark]

Deflation:
Computers / peripherals, smart phones, real estate, big screen HDTVs. 0% interest still on cars.

inflation:
airline prices - US Airways increased its miles to 30,000 from 25,000 for redeeming for a round trip on non-blackout date in the 48 states. That's 20%
Foods - going up in price
Health insurance, health care
College tuition

Other category hard to tell
Apartment rent. Mine in Phoenix went up 2% over last year, but that's still down from two years ago. I expect next Fall (2011) my rent will be lower as more inventory of houses will occur over the next twelve months. In Los Angeles I notice there are more empty spaces in my apartment's parking garage. If this stays like it for five months my LA rent will drop at the January lease renewal. Renting is cheaper than buying in L.A. But I think that is an "earthquake" premium on houses. I'd rather be in a one story house built after 1971 than a three story apartment building

Anyhow, Looks as though we have inflation in things we need and looks as though we have deflation in things we want. So you should have only enough cash for living expenses for a year or two, but put the rest of your assets in stock index mutual funds (and international stock index funds) and precious metal bullion coins.

Originally Posted by Zippyman

Premium gas is $2.87 a gallon even with significantly reduced consumption.

I went to McDonald's last week and a Quarter-Pounder with cheese is now $3.25.

Deflation??

I'll believe it when I see it.

[jimj]

Originally Posted by 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.

No it wasn't perfect, it needed interior paint (builder grade flat paint, boring color) and back yard landscaping as well as carpet cleaning. After talking with the neighbors evidently the owners only lived in it for about a year before they lost it to the bank.
They didn't tear it up, just normal wear and tear. The back yard was left in the same condition as when they bought it, sprinkler system in and that's all, no plants or lawn etc.
We looked for a couple of months to find a house that was cheap and not torn up and every time we found one it'd get bought usually by an "investor" just before we could submit an offer or we found it was a flip so a bit higher priced and they wouldn't move off asking.

After building our last house and being the general on it I don't see how a house like this one could be built for $47 sqft even if you used "lick'em and stick'em cheap finish work, builder grade carpet and evap cooling. Heck, bullnose corners themselves aren't the cheapest and neither is a finished garage (including trim). Oh, they took some of the window blinds and a couple of fans as well...

[Lovegun]

Originally Posted by jimj

No it wasn't perfect, it needed interior paint (builder grade flat paint, boring color) and back yard landscaping as well as carpet cleaning. After talking with the neighbors evidently the owners only lived in it for about a year before they lost it to the bank.
They didn't tear it up, just normal wear and tear. The back yard was left in the same condition as when they bought it, sprinkler system in and that's all, no plants or lawn etc.
We looked for a couple of months to find a house that was cheap and not torn up and every time we found one it'd get bought usually by an "investor" just before we could submit an offer or we found it was a flip so a bit higher priced and they wouldn't move off asking.

After building our last house and being the general on it I don't see how a house like this one could be built for $47 sqft even if you used "lick'em and stick'em cheap finish work, builder grade carpet and evap cooling. Heck, bullnose corners themselves aren't the cheapest and neither is a finished garage (including trim). Oh, they took some of the window blinds and a couple of fans as well...

Where is the location of this home? just wondering

[jimj]

Waddell

[azjack]

"inflation:
airline prices - US Airways increased its miles to 30,000 from 25,000 for redeeming for a round trip on non-blackout date in the 48 states. That's 20%
Foods - going up in price
Health insurance, health care
College tuition"

I would say that I pay less for housing, food, and more for health care premiums. The small amount of air travel that I do is higher, but that was from real dirt cheap to merely inexpensive.

Whenever they do those food price average reports for Thanksgiving, etc, they never resemble my costs. I mean, between the loss leaders and other competition among the several AZ grocery chains, plus Wal-Mart and some other players, I just do not see it. I do not think that I have paid more than two dollars for a gallon of skim milk in a few years. A couple of weeks ago, I bought enough salad ingredients at Sprouts for eight elaborate salads for $6.66. After a quick visit to a priest to confirm that I was not evil, I was all set.

I guess that I have retained my broke college student careful grocery shopping patterns, but I just do not see food inflation.

As far as fast food, I try not to eat it, but I have many buy one/get one free Burger King, etc. coupons arriving weekly. And for some reason, Kohl's clothing store sends everyone (at least in my zip code) $10 gift cards monthly. Obviously, most people must spend much more than that when they use them or they would be eating some big losses.

But to keep things on topic, post-tax credit FHA inventory seems to have more reduced prices and houses are sitting longer. The website that lists their inventory is City Index

[Howard Roark]

AZJack, thanks for the website of the house data! I see that as valuable. Added it to my favorite links!