60% of Home Buyers are Investors in Phoenix market (Scottsdale, Chandler: sales, real estate market)

[Captain Bill]

Originally Posted by Howard Roark

...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.

Of course that is your personal opinion. However, there are many extremely wealthy individuals who made their fortunes in real estate who would disagree with you.

The nice thing about it is, that some people understand real estate, some understand stocks, and each should do what is best for them.

Investing in stocks apparently works for you. Investing in real estate has worked for me.

Living in an apartment and paying rent works for you because of your lifestyle, and it can work for many others. No one can say that is wrong, because it is what you desire.

At the same time, no one can say it's wrong to want to live in a home one can call their own, and invest in real estate rather than the stock market.

So, let's live and let live.

[ReadyFreddy]

You cannot dollar cost average into a house.

Well, not one house. But there are exchange-traded real estate securities of all types.

Stocks don't serve well as a shelter or a tax shelter, and they have their volatility as well. You can beat the stock market some of the time but no one beats it all of the time, or even most of the time. You get what you pay for, in terms of return vs. risk. No asset class is outright bad. They're just all different and useful for different things.

[Captain Bill]

Originally Posted by 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?

I think your conjecture is misguided and not supportable by any available data.

The 60% investor owned purchases noted in that article is not correct. It pointed to azbidder as the source, but looking all through that site I could find nothing to confirm that number.

The only source for the number of Owner Occupied vs Investors is the recorders office where the Affidavit is filed for each property sold and recorded.

The Affidavits of Value in the recorders office show that 73.9% of buyers today are "Owner Occupied". That leaves 26.1% sold to investors.

However, the majority of them are landlord investors who have a 10 year plus hold time goal. These are very astute investors who know the prices of the homes here cannot remain at this level.

[Howard Roark]

I have a combination of Roth IRAs and traditional 401k and traditional IRAs, as well as non-dividend growth stocks which I sell sparingly. I'm in a very high tax bracket. My 2011 Adjusted Gross income will be above $200,000 and my 2012 AGI the same because I converted $200,000 into Roths. But the long term gain tax on my stocks is 15%. And that's only if I sell. Last time I sold any stock mutual fund (which is outside tax deferred) was in 2004. I get about $70,000 per year in a tax write off by my career, so it is far better than a MID. It dwarfs the MID!

Your real estate long term gain is tax free on only your primary residence, not a second residence. And the gain worked well if you bought in 2002 and sold in 2006 but like most post bubbles, the asset that bubbled will not return to bubble proportions for a generation or more (like the 1920s Florida real estate bubble, did not return for 80 years).

Originally Posted by ReadyFreddy

Well, not one house. But there are exchange-traded real estate securities of all types.

Stocks don't serve well as a shelter or a tax shelter, and they have their volatility as well. You can beat the stock market some of the time but no one beats it all of the time, or even most of the time. You get what you pay for, in terms of return vs. risk. No asset class is outright bad. They're just all different and useful for different things.

[MN-Born-n-Raised]

Originally Posted by Captain Bill

Of course that is your personal opinion. However, there are many extremely wealthy individuals who made their fortunes in real estate who would disagree with you.

The nice thing about it is, that some people understand real estate, some understand stocks, and each should do what is best for them.

Investing in stocks apparently works for you. Investing in real estate has worked for me.

Living in an apartment and paying rent works for you because of your lifestyle, and it can work for many others. No one can say that is wrong, because it is what you desire.

At the same time, no one can say it's wrong to want to live in a home one can call their own, and invest in real estate rather than the stock market.

So, let's live and let live.

Well said. I've never really had an interest in stocks. I know several customers and friends who have done very well but 8 out of 10 times they are passionate on the topic. Same thing with RE. The people I know who are passionate do very well. But just like stocks, you have to read the tea leaves and there is an art to it. I know more than a few that lost their butts in stocks as well as real estate.

Independent of all of that, I measure my "wealth" a bit different than Howard. It's the quality of my health, the quality of my family life and (without question) life's comforts. My goal is to work less not more. Also, one of those comforts that is important to me is a home that I call my own. That's what floats my boat.

Luckily, I've never found the need to live next to section 8 folks in an apartment like Howard in the spirit of saving more $$'s. You can triple my net worth and I will still take the last 27 years of home ownership. I'll go farther. You could pay ME $3K a month to live in section 8 apartments and I will positively decline. The quality of life over 27 years trumps intentionally living with subpar folks just to save a few bucks.

So as you say Bill, to each their own.

[Captain Bill]

Originally Posted by Howard Roark

I have a combination of Roth IRAs and traditional 401k and traditional IRAs, as well as non-dividend growth stocks which I sell sparingly. I'm in a very high tax bracket. My 2011 Adjusted Gross income will be above $200,000 and my 2012 AGI the same because I converted $200,000 into Roths. But the long term gain tax on my stocks is 15%. And that's only if I sell. Last time I sold any stock mutual fund (which is outside tax deferred) was in 2004. I get about $70,000 per year in a tax write off by my career, so it is far better than a MID. It dwarfs the MID!

Your real estate long term gain is tax free on only your primary residence, not a second residence. And the gain worked well if you bought in 2002 and sold in 2006 but like most post bubbles, the asset that bubbled will not return to bubble proportions for a generation or more (like the 1920s Florida real estate bubble, did not return for 80 years).

Maybe it would be good if you started a new thread to discuss the advantages of investing in stocks as opposed to real estate. Others on this thread may not be interested in hearing about stock market investments, since it's not the purpose of the thread.

[ReadyFreddy]

I get about $70,000 per year in a tax write off by my career, so it is far better than a MID. It dwarfs the MID!

Your real estate long term gain is tax free on only your primary residence, not a second residence.

But your mortgage interest would be an additional write-off, not an either/or. Or are you saying you pay $70,000 a year in rent and write it off as a business expense?

And who's talking about second residences?

It's neither here nor there, and I have a feeling we could discuss the wisdom of real estate as an investment for a long time and get exactly no where.

[Potential_Landlord]

Let's keep the discussion on the Phoenix RE market, ok? - Different asset classes behave very different. They each have their own risk/reward profile and suite different personalities. It's like comparing apples with oranges as to which is "better". But this is the Phoenix forum folks ;-)

[MN-Born-n-Raised]

Originally Posted by Captain Bill

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"...

My recommendation to "buy now" was aimed towards my kid's (assuming they were in the <$250K market and looking to buy in the Phoenix metro area. They also would be financing which is another sense of urgency.

Interesting chart Capt'n. It seems nearly all price points are going up. Of course if I grabbed 20 homes that have been on MLS for the past 6 months, I predict they are still dropping their price. As I have said before, if someone is trying to sell and they have it over priced, that is a big marketing mistake. Hence, I suspect some people who are convinced the luxury market (on average) is dropping might be looking at stale inventory. That's because they missed THEIR sense of urgency to the buyers.

It seems that the facts are that the luxury market (on average) is currently on the rise!

[azriverfan.]

Originally Posted by 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.

Howard

Yup, the Kiyosaki wannabes are back and that's exactly what they are doing. They are buying shacks for cash to rent out and then plan to dump them in 10 years for profit. It's pretty obvious. Regular folks can't buy these homes and the market is being flooded with these rentals. Listen to the stories on this forum. When people are saying "I can't get a house because there were 4 bids on it" guess who the winning bid went to....the investor who paid cash.