Phoenix Real Estate Market Keeps Tanking (good credit, tax return, requirements)

[azjack]

I guess that I will chime in with some anecdotal reports that obviously mean little in the larger scheme, unless they are actually happening to larger segments of the population. A relative who has not paid her underwater mortgage for a bit over a year is scheduled for a Trustee Sale this coming week. She has moved out, and is actually hoping that it is not delayed. I guess that she wants closure by way of foreclosure.

One couple whom I know moved out of their Buckeye house that was practically 2/3rds underwater. Purchase date: late 2005, zero down, no refi. They just moved into a rental house in another burb and seem happy. I wondered why they did not stick around for what could be a long period of free housing, but I guess that they just did not want any drama. I am not sure how long since their loan was paid, but there certainly is not any sign of a Trustee Sale Notice. I guess that it will just sit vacant for many months (or longer) like many others on their street and in their subdivision.

Anyone have the most recent stats on the percentage of houses with loans underwater in the Phoenix area? I think that it was above 50% in the past. Has that changed?

I also recall reading an article about someone who was doing housing vacancy studies by using water use data, but I am not sure if Phoenix was included. That sounds like it would be more accurate than census data.

[john3232]

Originally Posted by azjack

....
Anyone have the most recent stats on the percentage of houses with loans underwater in the Phoenix area? I think that it was above 50% in the past. Has that changed?
.

I really have no idea but my feeling is those who could get out from under would have already done so.

The market has turned around at least in Gilbert and Chandler and while prices are still much lower than in 2006 if you bought anytime before 2004 it might be best to wait another year and see where the market is then before making plans to sell.

[Home Addict]

Originally Posted by Guitarmaan

How does Europe affect Phoenix prices? I'm curious, currently being in Europe.

If Europe banks do start to fail, that might cause their US counterparts to tighten lending (to preserve capital) further. This might mean that mortgage approvals will go down as a collateral damage.

However, I don't think you could even predict the Phoenix housing price direction given that scenario.

[MotleyCrew]

My son in law talked to two banks recently to refinance his home which is not underwater. He has a good job, my daughter does as well, even with putting more money into the loan, the banks just don't want to lend at 3.66 percent. I do believe that all this mortgage help is so much hot air/feel good garbage. The housing market will not fully recover until jobs return in mass and the banks let loose some funding.

[Sunni2012]

Originally Posted by MotleyCrew

My son in law talked to two banks recently to refinance his home which is not underwater. He has a good job, my daughter does as well, even with putting more money into the loan, the banks just don't want to lend at 3.66 percent. I do believe that all this mortgage help is so much hot air/feel good garbage. The housing market will not fully recover until jobs return in mass and the banks let loose some funding.

Banks are just getting redicilous. It should be a simple decision for a bank to refinance ur son in law especially given that fact he is buying down his loan more.
I refinanced last year n did the same thing and it took 4 months to get it done. And I put down a huge chunk of $$ to bring loan down. They still gave me a hard time asking for everything under the sun for approval. It was a redicilous process that took forever. It's almost like they'd rather see the house foreclosed on then help people who can make payments and want a better rate. Btw my mortgage was 1300$ and I was buying down to $900. Absolutely redicilous, if I can make a 1300 payment. I certainly can make a 900 payment. Banks are just pathetic lately.

I see the rental market increasing now cause of all the banks not approving people .
I was gonna sell my house in Ma but now I'm gonna rent it out and buy a house in Az very soon

[asufan]

Originally Posted by Ponderosa

The party's over before most of the guests arrived. Look for prices to drop 10% on average by the end of the year if Europe can't get its act together.

The lone bright spot I see is that they are building houses like crazy again. I was driving down Cotton Ln in Goodyear and it looks like an entire block is under construction over by Target. I heard that homebuilders are building homes to rent. Maybe that explains the construction boom.

Not sure that's the case in my market. I have searched for a very specific type of property in South Chandler (basically everything South of Chandler Fashion Center, East to Cooper Road and South to Chandler Heights Road). my search criteria contains houses with an average price of probably $550,000 (when you include the million dollar homes that skew the average), and the actives on the market have decreased by ~10% every 2 weeks. I did the search as recently as yesterday and it was down about 6% from the previous week. The list included 5 "new listings" and some of those shown as active also have the note "multiple offers received" in the remarks, so they aren't active either. I am seeing occasional price decreases. One house I saw was listed for $599K, they reduced it about $30K 2 weeks after listing it and now it's pending. I actually would've wanted it at $520K and felt that was all it was worth.

[MN-Born-n-Raised]

Prices are softening some in my neighborhood. The momentum has slowed down a bit and asking prices are turning back a little. Typically, that happens every summer. But nothing has been "typical" for years. I told my wife that if I was only interested in appreciation, I would sell my place in Surprise two months ago. It would have been an easy FSBO. But it is not for sale.

One variable that is controlling appreciation is that new construction is filling the pipeline (a.k.a. more supply). In many areas, new home prices got close enough in comparison to new. People got sick of being outbid and many decided to build in growing areas like Gilbert, Surprise, Peoria (Vistancia), Goodyear etc.

Since homes are 25% more than they were in the trough, they don't cash flow as easily so many of the investors have gone to different locations like Atlanta. Additionally, 2nd home buyers have also leveled off because of the higher prices. The numbers are no longer a no-brainer for a subset of the 2nd home owner population.

As others have said, Europe's bad news shakes the stock market which affects peoples buying mood. Anyone who has ever opened up their portfolio after a stiff drop knows that they tighten their belt.

Finally the sense of urgency to buy is subsiding. People get the feeling that this super cheap money is going to be around for a much longer time than they initially thought. When you combine all of these other parameters together I could see housing dropping at least 5% before years end. This very well could be the beginning of a typical 2-4% annual gains. Putting it another way, the quick rebound of appreciation is probably over and we are reaching an equilibrium.

[Ponderosa]

Originally Posted by MN-Born-n-Raised

Prices are softening some in my neighborhood. The momentum has slowed down a bit and asking prices are turning back a little. Typically, that happens every summer. But nothing has been "typical" for years. I told my wife that if I was only interested in appreciation, I would sell my place in Surprise two months ago. It would have been an easy FSBO. But it is not for sale.

One variable that is controlling appreciation is that new construction is filling the pipeline (a.k.a. more supply). In many areas, new home prices got close enough in comparison to new. People got sick of being outbid and many decided to build in growing areas like Gilbert, Surprise, Peoria (Vistancia), Goodyear etc.

Since homes are 25% more than they were in the trough, they don't cash flow as easily so many of the investors have gone to different locations like Atlanta. Additionally, 2nd home buyers have also leveled off because of the higher prices. The numbers are no longer a no-brainer for a subset of the 2nd home owner population.

As others have said, Europe's bad news shakes the stock market which affects peoples buying mood. Anyone who has ever opened up their portfolio after a stiff drop knows that they tighten their belt.

Finally the sense of urgency to buy is subsiding. People get the feeling that this super cheap money is going to be around for a much longer time than they initially thought. When you combine all of these other parameters together I could see housing dropping at least 5% before years end. This very well could be the beginning of a typical 2-4% annual gains. Putting it another way, the quick rebound of appreciation is probably over and we are reaching an equilibrium.

There's another 20% or more of fast appreciation left in the housing here before we get settle into the pace of wage inflation. Just not right now. The euro crisis is dragging on the world economy and slowing the pace of recovery from what it otherwise would be. We need that job recovery. I still hold out some hope that the US consumer, buoyed with money from falling energy prices, will start spending and pull the world back from the brink. I'm doing my part, LOL.

[bguar]

Originally Posted by MotleyCrew

My son in law talked to two banks recently to refinance his home which is not underwater. He has a good job, my daughter does as well, even with putting more money into the loan, the banks just don't want to lend at 3.66 percent. I do believe that all this mortgage help is so much hot air/feel good garbage. The housing market will not fully recover until jobs return in mass and the banks let loose some funding.

This isn't true and you aren't hearing the entire picture.

[MotleyCrew]

Originally Posted by bguar

This isn't true and you aren't hearing the entire picture.

I am afraid it is true. They both have great jobs, a big savings account, both been working for same companies for almost a decade. I think it is more that banks really do not want to be tied to 30 year loans at 3.66 percent. He will go and talk to their credit union next.