60% of Home Buyers are Investors in Phoenix market (section 8, apartment complex)

[MN-Born-n-Raised]

Originally Posted by azriverfan.

It is unfortunate that people can't purchase homes they can afford because wealthy investors are buying these properties for cash.

As a US citizen, you are part owner in many of those homes that are being sold. Why would you want the homes devalued even more?

[jdahunt]

You are right on MN.....one of my wifes co-workers took home 800K after the bank bailout in tax payer paid wall street annual bonus's and he bought a new house with it.

When we were invited over to see it I asked my wife which part of the house belonged to us..lol

[Newporttom]

Sounds like something Snopes should investigate.

[amatrine]

I am seeing it here in Arizona city too. Did not think I would, but we are. The cheap 50k homes have been bought up. There are a few, but they are short sales, or really small damaged homes. People are buying out here at 85k again, considering average was 45 a few months ago. At the worst point we had almost 500 homes on the market in this town now down to the low 100's.

In this area what I am seeing are a lot of Canadian buyers. In fact Canadians bought the house next to me. This area has a high retirement population. At the same time I am seeing apartments go into foreclosure, while the houses are getting bought up. I spoke to one owner , who said the people that rent the apartments are younger, and have had to move to the city find work. The only ones renting them are people who do not pay, steal the appliances etc, so a lot of owners are just letting them go after loosing so much. I know this is a local phenomenon to this area of Pinal as far as the apartments go. You can get some good deals on duplexes. The ones that went up for auction last month across the street sold for 10k a building!

[Captain Bill]

Originally Posted by azriverfan.

But I get it, that means every single person in the Valley need to jump into the market and buy a home now because these trends pertain to all of us. Oh the urgency!!!!!

I think you're misunderstanding the intent of the information. No one has suggested that anyone needs to jump into the market and buy a home and no one is trying to create an urgency. I am reporting factual data, (along with an occasional opinion) and others are reporting their factual data also.

I take that back; Mn-Born-N-Raised did say something like people should go out and "buy now"...

Also, everyone understands that the general numbers are for the Phoenix Metro area, all types, that the market varies from price range, city, zip codes and communities; that the general trend in Phoenix Metro does not apply to all homes. Anyone can get all types of specific information about price ranges, zip codes, cities, etc., and much much more by subscribing to the Cromford Report, and from some Realtors who subscribe to that company's service. I only have the time, and permission, to post a small amount (with giving proper credit)

Many individuals on C-D have stated that the market data is valuable to them.

Some people coming to the Phoenix area, such as Jdahunt, have an erroneous picture of the Phoenix market because they've read the national news and have received some market information from individuals who don't know what's happening in the market, or who have bought into the gigantic shadow inventory theory.

Jdahunt thought that we had thousands of vacant homes here with a flood of shadow inventory about to crash down on us causing prices to probably go down another 15%; and he would be able to come down here, quickly swoop up a steal and go home.

I think he is beginning to understand, from the data I've presented, and the stories that local home hunters have told him, that the picture of the Phoenix Metro market that had been painted for him is not today's reality.

We understand from your statements that you are looking to buy a luxury home in the future, and I believe you's said you have been seeing prices decline in your price range. Therefore, what you are seeing in that price range and location may be different from the general market trend.

The chart below, courtesy of the Cromford Report, shows the appreciation in all price ranges. (not broken down by cities)

The last time I posted this chart, there were several price ranges that showed negative annual price appreciation. I'm surprised to see this time that only the <$25K and >$2mil are showing a decline in annual price appreciation. Everything else is showing price increases.

[jdahunt]

This was just put out by ReatyTrac...

From RealtyTrac "Activity in the 26 states with a judicial foreclosure process rose 24% in February, compared with February 2011, while activity in 24 states with a non-judicial process decreased 23%"

In the lastest report Arizona is still number 3 behind California and Nevada in the ratio of homes being foreclosed though...1 in 312.

So I am willing to accept that it may not be a big deal in Phoenix with it being a non judicial state, but its not such a bad thing to have the discussion.

I like to use city data to see what the locals are saying but if you are really interested in spending money you have to get your feet on the ground.....17 days and counting.

Besides the Canadians are you guys seeing a flood of Californians as well?

[Boompa]

Originally Posted by azriverfan.

Interesting article in the Arizona Republic by Catherine Reagor. Here are some quotes from the article. It confirms a lot of what we've been saying. I guess we are not as paranoid as some of us have been labeled.

Cash buyers, who are typically investors looking to resell the properties or use them as rentals, account for nearly 60 percent of all Phoenix-area homebuyers now, according to data compiled by AZBidder.com, an online foreclosure-auction service.

Housing analysts say the current buying frenzy may run its course in six months and not create a lasting recovery. Experts say the region's housing market won't really recover until regular homeowners, who can afford their mortgages, feel like they can sell and make a decent profit -- not the profit of 2006, but enough to pay off their mortgage and net a slight profit if they bought before 2000.

That is not to say the bidding wars are driving up prices in the overall housing market nearly as much as they did in boom times. Median resale prices remain near the bottom of the lows to which they fell after the housing crash and wave of foreclosures that began in 2007.

Read more: Phoenix-area homebuyers squeezed out by investors

Just goes to show that greed, rather than want of a home, is the primary buying motive. That means they haven't nearly hit bottom.

[jdahunt]

Captain, any numbers on former owners that were foreclosed on that are committing to never buying a house again but will only rent?

I've heard people saying that but didn't know if any studies or numbers exist.

[Captain Bill]

Originally Posted by jdahunt

Captain, any numbers on former owners that were foreclosed on that are committing to never buying a house again but will only rent?

I've heard people saying that but didn't know if any studies or numbers exist.

I'm not aware of any studies like that. I doubt if any such study would be reliable because people change their minds. When they first get foreclosed on they may have one opinion about homeowner ship, and change their mind later.

[Howard Roark]

AzRiverFan, thanks for your OP. Yep it's beginning to look like the majority of buyers are trying the ol' Pump and Dump deal. I wonder if "Rich Dad Poor Dad" Kiyosaki is back buying up $80,000 POS shacks in Phoenix and turning them around at $110,000?

Investor owned- Ha! I prefer living in an apartment complex with same day maintenance, not week later maintenance. It's going to be like a Chinese laundry - the Chinese in business to do each others laundry - when it comes to turning houses into rentals. In other words, it will flood the market again and keep apartment rent prices low. No I'm not taking the bait.

Once again, the easier and faster way to build wealth is NOT real estate, but stocks. My net worth went up well over 60% since 2006 because I was focused on equities and 4%-yielding municipal bonds and dollar cost averaged. You cannot dollar cost average into a house.