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When it is said and done: going from the 2005 housing price peak; the Phx area will likely have an overall 40% drop in prices.....factoring in core inflation in all fairness.
Some areas will dip slightly as in S Scottsdale, N Tempe, Paradise Valley and the Arcadia section of Phoenix.....think 24th St/Camelback--------but, Queen Creek, Maricopa, Gilbert, Goodyear will probably take a severe hit.
I dont think Gilbert will take the hit that you speak of...
Gosh, this sucks! I'm just waiting for the market to level so I can sell and go. Everyone who always tells me to leave here, this is why I haven't yet! It's not like I'm trying to stay and complain, I am trying to be patient. But 10 more years will kill me!!!!!!!!!!!!
The market peaked at the beginning of '06. We have already seen a 10% drop from there. I predict another 10% drop depending on your locality and the buyers will step in and inventories will decline. Look for increases beginning of 09. Buyers should have bought by then otherwise they'll be squeezed again.
Gosh, this sucks! I'm just waiting for the market to level so I can sell and go. Everyone who always tells me to leave here, this is why I haven't yet! It's not like I'm trying to stay and complain, I am trying to be patient. But 10 more years will kill me!!!!!!!!!!!!
Unless you are moving to a place where the real estate market is currently on the rise, it doesn't matter whether you sell now or two years from now. While the prices are low here and you may receive less from your home than you probably will 2 years from now, you will also be able to buy a home in your new location for less money today than you will 2 years from now.
So you wait 2 years and get $25,000 more for your home. You'll most likely also pay $25,000 more for your new home. In most cases it's a wash.
Getting less for your home today means you'll also buy a home for less. You may even find a better deal by doing it now.
If you're wanting to move, you just may want to consider getting your home prepared for sale and go ahead and sell it. But get it prepared properly and price it right or it will take longer to sell it.
If you want to try and sell it yourself, then do a lot of study and research on marketing a home. If you're going to list it, talk to several agents and choose one that tells you what the market really is, and exactly how they plan to market your home.
If someone tells you that your house will sell for a price that is higher than the comparable sales in your area, then beware. They are telling you what you want to hear--not what you need to hear.
This article is typical of the "sensationalism" and misleading reporting done by the media.
The headline is extremely misleading: "Double digit home price drops coming" which implies that from Sept 19 forward we'll see double digit drops. That is designed to get people to read their article. The negative spin is what sells.
Moody's should get their information from the real estate experts who daily monitor the market statistics, such as the NAR and the founders of large successful real estate companies such as Remax and others. These people are the real experts in this business, and know it better than anyone.
If you look at some of the prices that are being asked for homes today and compare them with the prices 7 months ago, you'll see that there has already been a 15 to 25% drop in home prices. How much farther are sellers willing to go? I don't believe they are willing to go much farther.
A listing I have was listed by another agent early this year for $429k and they reduced it to $385k. It was over priced at 385 because the market had dropped pretty fast.
I was asked to list it, but I told the owner that the home needed redecorating badly, and needed to be priced at the current market value, which is around $348 according to the comps. We kept it off the market for 3 months to start with zero days on market, and they gave me a budget of $10k to redecorate it. We did that and they are firm on holding the price now. They will hold the house until the right buyer comes along, and I don't blame them.
The Moody article reminds me of the days a few years ago, when the talking heads on CNBC stock market shows would talk about how a particular stock is doing so well and everyone should buy. They were selling their stocks into that market. Or they would tout negative on a stock they were buying in order to keep the price down while they bought.
All of that finally got exposed to the public, and the practice is not as prevelant anymore. But they are still deceptive. Watch when they tout a stock, and the host asks "would you be a buyer in this stock". They will answer yes "I would be a buyer". That is deception because it does not say they are buying. And they may in fact be selling. By saying they "would be a buyer" does not mean that they are not selling. It could mean yes I would be a buyer, but in fact I'm not. I'm holding too much of the stock now and I'm reducing my inventory so I can buy something else.
While the general real estate buying population is waiting for the "bottom", the investors are out in force picking up bargains today. I know that because my office has a wholesale department, and I belong to a large investors association and talk to many investors, and have a few investors as buyer clients. A friend of mine has purchased three houses in the past 6 months to hold as rentals.
Just as in the stock market, the general public is the last to get on a rising market, and the last to sell in a declining stock market. The investors, and the sophisticated buyers know that the key to succes is to buy low while others are panic selling, and sell high when the general public is panic buying. They don't wait for "tops" and "bottoms" because they know they'll miss them since they are impossible to predict, and difficult to know when it's there.
Now there's the big money question. If the Fed keeps cutting interest rates, essentially trying to patch up the sinking ship that is the mortgage and credit industry, all that ends up doing in the long run is further debasing the value of the already-weak U.S. dollar and contributing to inflation. That just sets us up for a bigger fall when the next recession does hit. And it will.
It's a simple fact that too many Americans' debt-to-income ratio is dangerously high, and too many have been living off of credit too long. The housing crisis is just the tip of the iceberg. Sooner or later, Americans won't be able to live off of credit anymore. When those bills come due- and they will- Americans will have to start spending only within the limits of what their income will truly enable them to, and start paying off that debt. When consumer spending subsequently takes a nosedive, and inflation soars, the economy's going to hit the skids. When that happens, the housing market's in for a much bigger than 17% correction, I'm afraid.
All I can say is, crash baby, crash. If I can scoop up a house up here in CO at bargain-basement prices, I'm all for it. Until then, I, like most potential buyers, will just watch, wait, and rent...
This article is typical of the "sensationalism" and misleading reporting done by the media.
The headline is extremely misleading: "Double digit home price drops coming" which implies that from Sept 19 forward we'll see double digit drops. That is designed to get people to read their article. The negative spin is what sells.
Moody's should get their information from the real estate experts who daily monitor the market statistics, such as the NAR and the founders of large successful real estate companies such as Remax and others. These people are the real experts in this business, and know it better than anyone.
If you look at some of the prices that are being asked for homes today and compare them with the prices 7 months ago, you'll see that there has already been a 15 to 25% drop in home prices. How much farther are sellers willing to go? I don't believe they are willing to go much farther.
A listing I have was listed by another agent early this year for $429k and they reduced it to $385k. It was over priced at 385 because the market had dropped pretty fast.
I was asked to list it, but I told the owner that the home needed redecorating badly, and needed to be priced at the current market value, which is around $348 according to the comps. We kept it off the market for 3 months to start with zero days on market, and they gave me a budget of $10k to redecorate it. We did that and they are firm on holding the price now. They will hold the house until the right buyer comes along, and I don't blame them.
The Moody article reminds me of the days a few years ago, when the talking heads on CNBC stock market shows would talk about how a particular stock is doing so well and everyone should buy. They were selling their stocks into that market. Or they would tout negative on a stock they were buying in order to keep the price down while they bought.
All of that finally got exposed to the public, and the practice is not as prevelant anymore. But they are still deceptive. Watch when they tout a stock, and the host asks "would you be a buyer in this stock". They will answer yes "I would be a buyer". That is deception because it does not say they are buying. And they may in fact be selling. By saying they "would be a buyer" does not mean that they are not selling. It could mean yes I would be a buyer, but in fact I'm not. I'm holding too much of the stock now and I'm reducing my inventory so I can buy something else.
While the general real estate buying population is waiting for the "bottom", the investors are out in force picking up bargains today. I know that because my office has a wholesale department, and I belong to a large investors association and talk to many investors, and have a few investors as buyer clients. A friend of mine has purchased three houses in the past 6 months to hold as rentals.
Just as in the stock market, the general public is the last to get on a rising market, and the last to sell in a declining stock market. The investors, and the sophisticated buyers know that the key to succes is to buy low while others are panic selling, and sell high when the general public is panic buying. They don't wait for "tops" and "bottoms" because they know they'll miss them since they are impossible to predict, and difficult to know when it's there.
Bill
Typical NAR propaganda garbage. This is too funny. Hey, why don't you try to sell me a bridge? I might just bite on that one, too!
Here's the news: real estate, like most everything else, is all about supply vs. demand. When the subprime mortgage industry went down, lending approval standards became much tighter for everyone, and it's now become much more difficult for the average buyer to qualify for a loan. Combine that with the biggest housing surplus on record, and the ingredients are ripe for a huge housing price drop across the country. Prices simply have to come back to a level where the average consumer who wants to buy an average home can actually qualify. Right now, there is a chasm between what people can and will be able to afford, and what average listing prices are in many areas of the country. So we're essentially at a stalemate until something gives. It speaks volumes when someone who makes a healthy six-figure salary has trouble affording a small, entry-level home in rural America.
Like I said, crash, baby, crash. Oh yeah, I've also read some experts predicting that about 30% of realtors in the Phoenix area will be looking for new lines of work by the time this all shakes out. So good luck with that.
Typical NAR propaganda garbage. This is too funny. Hey, why don't you try to sell me a bridge? I might just bite on that one, too!
Here's the news: real estate, like most everything else, is all about supply vs. demand. When the subprime mortgage industry went down, lending approval standards became much tighter for everyone, and it's now become much more difficult for the average buyer to qualify for a loan. Combine that with the biggest housing surplus on record, and the ingredients are ripe for a huge housing price drop across the country. Prices simply have to come back to a level where the average consumer who wants to buy an average home can actually qualify. Right now, there is a chasm between what people can and will be able to afford, and what average listing prices are in many areas of the country. So we're essentially at a stalemate until something gives. It speaks volumes when someone who makes a healthy six-figure salary has trouble affording a small, entry-level home in rural America.
Like I said, crash, baby, crash. Oh yeah, I've also read some experts predicting that about 30% of realtors in the Phoenix area will be looking for new lines of work by the time this all shakes out. So good luck with that.
I would agree with your first paragraph if you had made it in late 2005 or early 2006. Prices have come down and the smart buyers who plan to buy a home and live in it for 6 years are buying now. They aren't listening to the talking heads in the media and trying to bottom fish.
There is plenty of good affordable housing out there, well under $200,000; mortgage programs are available; FHA loans (non-FICO driven) are available for people who have good performance record but a low FICO for some reason.
There are also Down Payment Assistance Programs available These are grant programs that give up to a 5% grant money for down payment for first time home buyers (defined as one who has not owned a home in 2 years.) The money does not have to be repaid. It is FREE money.
Today a client of mine will be writing an offer of $170,000 on a nice home in a nice neighborhood, in great condition, built in 2001. This client is the typical person that you described, and the only problem they had was their low FICO and performance record. My lender helped them for 6 months get their credit up so they could qualify.
A big problem with people is that they abuse their credit cards and other credit and can't qualify for a loan because of their credit history. It's not that they cannot afford the home they want.
The TV and print media are the ones who put out the unsupported propaganda, and the problem is that people listen to that instead of researching the facts. So many people listen to that and keep hoping that if they wait, they will catch the bottom.
The prediction of realtors leaving the business is probably on target. There was a huge influx of agents that got into the business during the boom years. So when the market dropped there was not a sufficient number of transactions to support the number of agents. Those who did not know how to market for clients, and did not have a referral base could not survive in a slow market, and had to get other lines of work in order to survive. They learned that real estate is a very tough occupation, and that one has to have a lot of business skills, and work very long and hard hours to survive in this business.
Realtors are independent contractors. Each is operating their own business. They do not receive any type of salary, or draw against commissions. They have to pay a fee to their broker just to hang their license there. Then they pay the broker a percentage of their commissions. Plus they have to pay for all of their expenses. So whether or not they have money coming in, they have money going out. Those with no transactions could not afford to stay.
Those who know how to and can afford to market, and have a referral base, and know how to provide excellent customer service are the ones who survive. It's the same in any independently owned business where your income is dependent on your knowledge and skills and willingness to work long hard hours.
Bill
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