Honestly, when will the Phoenix real estate market bottom out? (crime, credit)

[06woman]

Originally Posted by 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.

That is ONLY if they did not borrow against it like many people including myself did. I was talked into a mortgage that I really couldn't afford because I wanted a pool. If I had been told that I couldn't afford it, I wouldn't have done it. The mortgage broker lied about our income. Also, we were told the payment included our taxes and insurance and it wasn't true. I didn't know until we had a past due property tax bill that it wasn't impounded. Then I tried to refinance with Quicken Loans (don't ever deal with them) who told me for 3 months that they could do it and then finally told us no. I didn't want to cancel or I would have lost $500 "good faith" money. By the time they told us they couldn't do it, our property taxes were past due and insurance was coming due (was supposed to be paid at closing). This made it impossible to refinance. In hindsight I would have put my house on the market immediately because I still may have broke even, but hindsight is 20/20. Continuously falling values made it impossible to refi into a real mortgage instead of the Option ARM. My husband got depressed because he was convinced then that we were going to lose the house and didn't tell me. I was trying everything to keep it. It broke us up at the end of April and we decided to let the mortgages go in default. I put the house up for sale and we both moved out of it in June. We have an offer right now and it's in negotiations with our lenders for a short sale settlement. My husband and I have reconciled and we are moving back together in a 2 br apt. We don't know what's next financially until the short sale goes through, but we have learned valuable lessons. 1) Do more homework, 2) If we don't have the money for it, then we don't buy until we save it, 3) Family is way more important. That was our first house and our first experiences with mortgages. We are doomed to rent for several years now, but the consolation in that is that we can save more money for when we CAN buy again and anything major needed in repairs to the house will be the owner's responsibility. Also, we got out of Maricopa which I have discovered after 3 years that I didn't want to stay there. Had this not happened, we would be stuck living somewhere we didn't want to live unable to sell our house.

[londonbarcelona]

Originally Posted by ArizonaBear

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.
.

Vegas - Yes. Cleveland or Pittsburgh? No. The reason being that of the three, only Vegas had huge gains in the real estate maket. The other two, their real estate never took that jump. The big housing swing that happened in Florida, Arizona and Nevada, never happened in Ohio or Pennsylvania.
People are not rushing to move to places like Pittsburgh or Cleveland, so their real estate is just as steady stream of new home buyers and move up buyers who already live in the area. Pretty much just local buyers. So it's a "constant." YKWIM?

[londonbarcelona]

Originally Posted by ArizonaBear

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

I can attest to that! When I lived in Richmond, there were the craziest ice storms! I remember when my children's school was closed for a week because the ice was so thick. Back then they didn't use salt (don't know if they do yet) they only used sand. So it never did anything to help melt the ice, it just made for a dirty bown icky mess that people ended up sliding all over anyway. I have some great pictures of the ice on the trees though.

[londonbarcelona]

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.

That's a very astute observation Steve-22. Hopefully that won't happen here. However, I can see how the standard of living could possibly drop for many people because the city will consist mainly of the "haves" and the "have-nots." I doubt it will effect the more affluent areas. (That is where the "haves" will live.)
To give Phoenix it's due though, it has been trying mighty hard to bring in other areas of business, like computer chip companies and bio-medical companies. Unfortunately, they don't seem to want to relocate here as much as we had hoped they would. One can only pray that something else comes into the area.
But at least our housing is fairly new so even if things do go south, one won't be able to tell because everything will still have that shiney new glow to it! And, we do have the best roads in the nation! Perhaps not enough of them, but nary a pothole to be found.

[Ponderosa]

There's other things going on in Michigan, though, that don't apply to Arizona. The auto industry in the US is doing fine, thank you. Just not in Detroit. Alabama is booming in contrast. The big problem for Michigan and the rust belt is union shops. No manufacturer wants to get into that mess. So skilled labor is driven out of state and what's left goes down hill. MI and the midwest also have tax laws that are a disincentive for investment.

AZ is anti-union for the most part. It also has a very positive climate for entrepreneurial startups - small employers who really are the ones that keep most of us in a job. Unfortunately, start-ups don't pay what the big dogs do. And union scale is well-above what you can get doing similar work around here. But those low labor costs mean jobs and economic growth. That's what we are seeing all over the south and southwest.

[yukon]

I think there's a bittersweet light at the end of the tunnel - home prices are coming down here (in Tampa FL) to what they should be, given our usual appreciation (not the bubble rates). Saw a 2 bd condo (real condo, not apartment conversion) advertised for $145,000, complex peaked last year at about $240,000 - and while this complex is nice, it's NOT a $240K property. But at $145K, it's reasonable and affordable for folks like me. Unfortunately, lenders are tightening up and in many cases are back to requiring 20% down, so I guess won't be buying one of the condos.

[06woman]

Originally Posted by GoGoLucky

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

Go here: REDC | Real Estate Disposition Corporation
and you will find houses starting at $99,000.

[Nice Nice Baby!]

NEVER!!! Hah.

[joninaz]

Ignore the national news. NYC is white hot. FL sucks because they way overbuilt, changed the property tax laws (to favor the local govts) and they are getting pinched by the insurance companies who are sick of hurricane damage.

CA is the key to AZ prices and CA hasn't been coming down. Sales are down. Sure. Inventory is up. But they had zero inventory for a long while. Look at prices. They are still nutty. Bay area. LA. San Diego. All nutty high for big cities. Don't even dare look at La Jolla, Malibu, Santa Barbara, etc. A couple still needs to make a combined 200K a year to get even the cutest little house in a far off area.

At some point the decent 300K home in AZ looks very nice.

1/5th of the coutry lives there but 30% can afford to own. Something's gonna change and AZ is prime to benefit.

[gregandvicky]

Originally Posted by 06woman

Go here: REDC | Real Estate Disposition Corporation
and you will find houses starting at $99,000.

Has anyone, realtor or buyer had any experience with REDC.