Honestly, when will the Phoenix real estate market bottom out? (Maricopa: for sale, apartment)

[steve22]

Originally Posted by ArizonaBear

For the record: aside from immigration from places like Mexico, etc. Illinois would be suffering population decline.

Wash DC is a government town------if the Nation's Capital moved to, say Oklahoma, DC would likely shrivel up and be little more than a pit stop between Baltimore and Richmond.

NYC is a major hub, yes for many things.

Heck: look at SE Michigan (Detroit area); its is dying despite very inexpensive housing and lots of water due to the collapsing Detroit Three auto industry.



Puget Sound area I tend to agree-------as for Chicago, etc. the severe winters can be deadly without proper shelter and heat in the winter.

Pick your poison-------I will deal with the heat here in Az vs. the nasty '4 season' weather in the Frost Belt.

Now; as for the overcrowding here in the Phx area; you will get a more sympathetic ear from me

Interesting that you should mention Detroit- that illustrates my point beautifully, actually. The Detroit economy is so completely dependent on the vitality of the auto industry that it's in complete ruin right now as the Big Three continue to struggle and hemorrhage jobs. As people get laid off from the Big Three, the smaller auto parts suppliers and manufacturers suffer also, and then they lose jobs, too. Then the problems trickle down to retail and restaurants in the area, and other small businesses, since people obviously don't buy unnecessary items or dine out when money's tight. Pretty soon, it's a downward spiral, the whole place is in an economic depression, and people are leaving for better opportunities in other states. That scenario you see happening in Detroit could very easily occur in Phoenix if the real estate market/construction industry goes under, b/c Phoenix is equally as dependent on construction & growth to anchor the economy as Detroit is on the auto industry.

[ArizonaBear]

Originally Posted by steve22

Interesting that you should mention Detroit- that illustrates my point beautifully, actually. The Detroit economy is so completely dependent on the vitality of the auto industry that it's in complete ruin right now as the Big Three continue to struggle and hemorrhage jobs. As people get laid off from the Big Three, the smaller auto parts suppliers and manufacturers suffer also, and then they lose jobs, too. Then the problems trickle down to retail and restaurants in the area, and other small businesses, since people obviously don't buy unnecessary items or dine out when money's tight. Pretty soon, it's a downward spiral, the whole place is in an economic depression, and people are leaving for better opportunities in other states. That scenario you see happening in Detroit could very easily occur in Phoenix if the real estate market/construction industry goes under, b/c Phoenix is equally as dependent on construction & growth to anchor the economy as Detroit is on the auto industry.

And you also inferred that it is not just Phoenix that could be vulnerable; other examples would be Las Vegas, Cleveland Oh, Pittsburgh Pa, and many other towns especially in the Midwest.

My theory is that any healthy community has at least three 'legs' supporting it-------think of a stool

Flagstaff would be one example (county seat, transportation hub, university, major shopping, recreation activities, etc.). Another would be Dallas, Tx (transportation hub, shopping, county seat, etc.) whereas Sierra Vista, Az is a military town, close down Fort Huachuca and the city would be in deep doo-doo.

[KarinKarinKarin]

My observation is that credit is going to be harder to obtain for a while. So fewer buyers. Lots of surplus new construction, added inventory, fewer buyers. So prices are going to have to continue to drop. That being said, there is plenty to do for a living in Phoenix other than buy and sell real estate.

Having come from the DC Metro area, there is also a lot more going on than government. It is a high-tech mecca, there are major universities, and NIH is there. That being said, the traffic is the second-worst in the nation, and just about makes the area unliveable, even though there is plenty of room for the middle class there.

Also, it is hotter there than it is here. We just moved from there about a month ago. Having been through the 115-degree Arizona weather, I don't care what the mercury says, it's more unbearable in the DC Metro Area. And you still have the miserable icy winters where it doesn't snow but there are treacherous icy conditions and miserable freezing rain on top of the hot, steamy, stuffy, claustrophobic summers. Climate isn't everything, or half of the world would be uninhabited.

There is plenty to draw people to Phoenix besides the real estate. Places like Paradise Valley and Scottsdale will probably see less depreciation than other parts of the Valley because there are independent things other than bubble to keep people buying there; I guess it will depend on the extent to which speculators bought there, and the extent to which people there got those horrible blow-up-in-your-face mortgages, but prices will probably still fall some.

Back home prices were falling because in addition to the factors I mentioned, tons of people bought at the top of the market with those wretched mortgages, can't sell them, and foreclosed. Other people who couldn't sell for the prices they wanted rented instead. You're right for the most part -- you can sort of tell the rentals from the owned homes, but only occasionally. That's not always true, and depends why it is that the renters are renting. So an outright ban probably makes no sense, but a limit on the number of people per room probably would, because if there are 20 people living in a four bedroom house with all the cars, these are the folks who don't mow the lawn or otherwise maintain the property, and that further depresses property values.

We're not planning on buying for the next several months or so. We are just grateful that we got out from under our house back East before the bottom dropped out. Back there, I dont' think it nearly has yet, and there is plenty to bring people to my old stomping grounds besides real estate speculation.

[ArizonaBear]

Originally Posted by KarinKarinKarin

My observation is that credit is going to be harder to obtain for a while. So fewer buyers. Lots of surplus new construction, added inventory, fewer buyers. So prices are going to have to continue to drop. That being said, there is plenty to do for a living in Phoenix other than buy and sell real estate.

Having come from the DC Metro area, there is also a lot more going on than government. It is a high-tech mecca, there are major universities, and NIH is there. That being said, the traffic is the second-worst in the nation, and just about makes the area unliveable, even though there is plenty of room for the middle class there.

Also, it is hotter there than it is here. We just moved from there about a month ago. Having been through the 115-degree Arizona weather, I don't care what the mercury says, it's more unbearable in the DC Metro Area. And you still have the miserable icy winters where it doesn't snow but there are treacherous icy conditions and miserable freezing rain on top of the hot, steamy, stuffy, claustrophobic summers. Climate isn't everything, or half of the world would be uninhabited.

There is plenty to draw people to Phoenix besides the real estate. Places like Paradise Valley and Scottsdale will probably see less depreciation than other parts of the Valley because there are independent things other than bubble to keep people buying there; I guess it will depend on the extent to which speculators bought there, and the extent to which people there got those horrible blow-up-in-your-face mortgages, but prices will probably still fall some.

Back home prices were falling because in addition to the factors I mentioned, tons of people bought at the top of the market with those wretched mortgages, can't sell them, and foreclosed. Other people who couldn't sell for the prices they wanted rented instead. You're right for the most part -- you can sort of tell the rentals from the owned homes, but only occasionally. That's not always true, and depends why it is that the renters are renting. So an outright ban probably makes no sense, but a limit on the number of people per room probably would, because if there are 20 people living in a four bedroom house with all the cars, these are the folks who don't mow the lawn or otherwise maintain the property, and that further depresses property values.

We're not planning on buying for the next several months or so. We are just grateful that we got out from under our house back East before the bottom dropped out. Back there, I dont' think it nearly has yet, and there is plenty to bring people to my old stomping grounds besides real estate speculation.

Much of what you listed would likely leave DC if the Gov't pulled out.

Look at what happened to Bonn, Germany when the country reunified 17 years ago and Berlin became the capital again.

I am a Wash DC native; born and raised so I know of what you speak of line for line re: the ghastly weather.

[KarinKarinKarin]

Well, it's moot. There is plenty to do in DC. There is also plenty to do here. Neither place has all of its economic eggs in one basket, unlike Detroit, which did.

The DC Metro area, and LA for that matter, could serve as an importan lesson for Phoenix though. Uncontrolled growth produces unliveable conditions. Yes, people do go to DC because of government. No, Phoenix doesn't have that. If Phoenix develops gridlock, it doesn't have DC's high tech or LA's show biz to keep people going there. People will just leave. DC's gridlock is in part what got us to leave. We didn't feel like driving two hours to commute one way to work -- and to add insult to injury, that two hours involving only a drive of 20 miles or so. I dont' want to take 10 minutes to get to my grocery store when it's only 1.5 miles away.

[GoGoLucky]

Double digit* home price drops coming - Sep. 19, 2007

i guess very soon

[blueeyz911]

Originally Posted by GoGoLucky

i cant wait to see it back when it was $115K for a "standard 3/2" new build...

Does anyone think houses will ever be this cheap again? That was back in 2004 when houses cost that little. Looking back, hindsight sure is 20/20. I should have bought a house back then.

[Magnum Mike]

Originally Posted by GoGoLucky

i cant wait to see it back when it was $115K for a "standard 3/2" new build...

LOL.. You might as well wait to see snow fall in Phoenix in the middle of July. It aint gonna happen.

I think we'll start seeing the gradual come-back in the real-estate market around 2010, and I'd rather see a slow and gradual come-back rather than the bubble we saw in 2004 and 2005, which burst. This way it'll be a good and steady market that'll remain healthy for a long time, rather than seeing those sharp peaks and declines in a short period of time.

I also think there are many home buyers out there that are waiting to see more declines in home prices, which is why not many people are buying right now.

[blueeyz911]

yep. I am one of those people that are waiting for house prices to go down some more before I dedide to buy.

[ArizonaBear]

Please remember that a 40% drop in real estate values starting back in 2005-10 (the peak and possible rebound, respectively) would not totally wipe out the $$$ gains if a person bought a place prior to 2003

In other words: a home bought 5+ years ago for $100K but peaking @ $250K (2005)......a 40% drop in value which would bottom at $150K-------would still yield a 50% profit.