Phoenix Real Estate Market Keeps Tanking (bill, health, best time)

[jdahunt]

My problem with gov picking winners and losers is that they only seem capable of picking losers time after time.

These houses should have been put on the market and let free enterprise do its thing.

They should have a one year plan to get rid of them then after that everyone can start earning equity again.

If these houses are turned into section 8 houses it is going to depress the market around them years to come.

If I was looking to buy for purely investment reasons I would be sitting on my money right now...wait out the next 6 months.

[john3232]

Originally Posted by jdahunt

....If I was looking to buy for purely investment reasons I would be sitting on my money right now...wait out the next 6 months.

You could wait but I doubt the fire sales of two years ago will return anytime soon for the individual investor.

[Home Addict]

Originally Posted by Zippyman

I don't think you have any idea about the volume of dollars being *given away* here. We're talking billions of dollars in give-aways to the investment banks.

The buyer(s) most likely got a good deal on the bulk sale. But a "billion"? Please....

[jdahunt]

Thats the problem with it not being open and transparent you don't really know....in the end it could add up to a many more homes...that could be big dollars.

I think the housing market would be best served to let everyone have access to them, that would allow first time home buyers to get the good deals and would do a much better job of stabilizing the market verses new mass rentals.

In the 6 months we looked in the Phoenix market before we bought we only came across 2 homes that were foreclosed by Bofa and being sold. With my wife working for Merrill we were not allowed to bid on any of their properties. Since they owned a lot of morgages and bought country wide we were expecting to see a ton of them......but only 2...why is that.....still don't know why that was..anyone have a clue why?

[Zippyman]

Originally Posted by Home Addict

The buyer(s) most likely got a good deal on the bulk sale. But a "billion"? Please....

The foreclosure pipeline @ Fannie is reported to be 1.4 million homes, if even half of those go through this program a billion bucks is a low estimate.

[Marv101]

It's not a matter of allowing bulk purchase such as this to happen; one of the oldest rules in the ole rule book is when the government does super-stupid things such as mandating that houses be sold to millions of folks who never would have qualified under multi-decade long underwriting standards, lots of folks are bound to get filthy stinkin' rich!!!

Then you toss in legions of Canadians who are buying up real estate like crazy throughout Phoenix & Scottsdale as the WSJ reported recently, and it's no wonder that your real estate market has perked up somewhat, in spite of moronic government intervention in the market and the appraisal process and their bad case of tunnel vision that comes with it.

[BestintheWest]

but the party may not be over

5 states drowning in underwater mortgages - Bottom Line

2. Arizona
Percent homes underwater: 48.3 percent
Total property value: $243.02 billion
Mortgage debt outstanding: $226.22 billion
Median home value drop from peak: 47.9 percent (second-biggest decline)
Homes in foreclosure or 90-plus days delinquent: 7.1 percent (11th-largest percentage)

[asufan]

Originally Posted by aliveandwellinSA

but the party may not be over

5 states drowning in underwater mortgages - Bottom Line

2. Arizona
Percent homes underwater: 48.3 percent
Total property value: $243.02 billion
Mortgage debt outstanding: $226.22 billion
Median home value drop from peak: 47.9 percent (second-biggest decline)
Homes in foreclosure or 90-plus days delinquent: 7.1 percent (11th-largest percentage)

That article is 4.5 months old and the data reflected in the article is much older

[Potential_Landlord]

Originally Posted by Marv101

It's not a matter of allowing bulk purchase such as this to happen; one of the oldest rules in the ole rule book is when the government does super-stupid things such as mandating that houses be sold to millions of folks who never would have qualified under multi-decade long underwriting standards, lots of folks are bound to get filthy stinkin' rich!!!

In the commercial RE market there was an identical boom-bust cycle, probably even bigger percentage-wise. This happened without government mandates. Apparently, the free market there came to identically stupid decisions just by itself. To blame the boom-bust cycle on government regulations may therefore be just as well "super-stupid".
If you want to understand the causes for super-long economic cycles in the US or Phoenix history, look at how much the upper 1% make and hold as percentage of total income and wealth. En route to the Great Depression in 1929, this percentage went higher and higher. Thus the imbalance between supply by the rich and demand by the average Joe consumer became bigger and bigger until the total crash. The last hurray of the consumer then was a real estate bubble that popped in 1926, 3 years before the total crash. In 2005 the upper 1% reached the same income share as last seen in 1929. The same year the consumer's last hurray real estate bubble popped and it was again 3 years to the Great Recession. So far the government reaction to the Great Recession has fortunately been better than what happened post 1929, but until we embark on a massive redistribution of wealth towards consumers we are in danger of repeating the experience of the 1930s.
The opposite situation was during the 1970s, when the income and wealth percentage of the super-rich was too small in aggregate and we had a demand-side imbalance, causing inflation and depression. At that time it was necessary to redistribute wealth to the rich. Now we are in the opposite situation.
To quote Marriner Eccles from ca. 1932:
“As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth … to provide men with buying power. … Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 [and again 2005; P.L.] drawn into a few hands an increasing portion of currently produced wealth. … The other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.”

[jimj]

Originally Posted by Potential_Landlord

In the commercial RE market there was an identical boom-bust cycle, probably even bigger percentage-wise. This happened without government mandates. Apparently, the free market there came to identically stupid decisions just by itself. To blame the boom-bust cycle on government regulations may therefore be just as well "super-stupid".
If you want to understand the causes for super-long economic cycles in the US or Phoenix history, look at how much the upper 1% make and hold as percentage of total income and wealth. En route to the Great Depression in 1929, this percentage went higher and higher. Thus the imbalance between supply by the rich and demand by the average Joe consumer became bigger and bigger until the total crash. The last hurray of the consumer then was a real estate bubble that popped in 1926, 3 years before the total crash. In 2005 the upper 1% reached the same income share as last seen in 1929. The same year the consumer's last hurray real estate bubble popped and it was again 3 years to the Great Recession. So far the government reaction to the Great Recession has fortunately been better than what happened post 1929, but until we embark on a massive redistribution of wealth towards consumers we are in danger of repeating the experience of the 1930s.
The opposite situation was during the 1970s, when the income and wealth percentage of the super-rich was too small in aggregate and we had a demand-side imbalance, causing inflation and depression. At that time it was necessary to redistribute wealth to the rich. Now we are in the opposite situation.
To quote Marriner Eccles from ca. 1932:
“As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth … to provide men with buying power. … Instead of achieving that kind of distribution, a giant suction pump had by 1929-30 [and again 2005; P.L.] drawn into a few hands an increasing portion of currently produced wealth. … The other fellows could stay in the game only by borrowing. When their credit ran out, the game stopped.”

The one thing you leave out is we're now a global economy unlike back in '29 which makes the consumption/production much more complicated.
FWIW, pretty much everybody I hear from and talk to says the same thing. We're now starting up the same behavior that caused the housing crisis in the first place.