Breaking News: Phoenix home prices up 32% in past year (Tempe: days on market, to rent)

[Bideshi]

Originally Posted by Captain Bill

Everyone had an opportunity to buy before the prices began to increase. The regular buyers apparently held back, while the investors came in and bought.

The investors were responsible for helping stabilize the market because they were buying. So it was a very good thing the investors were buying. It's only after the market had begun to increase that some of the regular buyers started to buy.

No worries. You can buy from the "investors" a year or two down the road at a considerable discount after they've lost their shorts.

[sarichter]

Originally Posted by Bideshi

No worries. You can buy from the "investors" a year or two down the road at a considerable discount after they've lost their shorts.

Lost their shorts on what? Prices are still well below reality... except maybe those prices quoted earlier in Gilbert. I think in another year or two we'll be at normal and then we'll start seeing (hopefully) mild increases because people still want to move here.

[jimj]

Originally Posted by Bideshi

No worries. You can buy from the "investors" a year or two down the road at a considerable discount after they've lost their shorts.

Tsk,tsk,tsk still riding that "houses are going to fall another XX %" are you? Is that when the "shadow inventory" gets released or another debacle?

[MN-Born-n-Raised]

Originally Posted by Bideshi

No worries. You can buy from the "investors" a year or two down the road at a considerable discount after they've lost their shorts.

I bought at about $51ish a square foot. A conservative market is at $69 a square foot. I paid cash. My shorts are firmly attached!

[sarichter]

Originally Posted by MN-Born-n-Raised

I bought at about $51ish a square foot. A conservative market is at $69 a square foot. I paid cash. My shorts are firmly attached!

Smart thinking... and it's only going to go up from there!

[Captain Bill]

Originally Posted by Bideshi

No worries. You can buy from the "investors" a year or two down the road at a considerable discount after they've lost their shorts.

The investors I've worked with are looking at a time frame of 5-10 years. Most of them paid cash and have their homes rented out, so they're making money every month. Even if prices go down, they are still making money on the rental income, which is the purpose of their investment.

Absent some sort of personal financial emergency where they may need some cash, they don't have any need to sell until the time is right for them.

For the investors to lose money on their capital investment during the next two years, prices would have to go down drastically. I try to keep up on what the market is currently doing, plus the trends because I own some rental properties. The information I have doesn't appear to support your projection of a huge decline during the next two years.

Since I'm always eager to learn more about the market, please point me to the data you're using to make your projection.

[liz451]

I don't think investors will completely leave the market or dump properties in 2 years however if prices continue to rise the ROI will not be there for them anymore and they will leave the market to an extent (this just seems logical - if they can't make money on their rentals they won't buy).

My question is what will happen to the market when this happens - my uneducated guess is getting back to a normal amount of inventory and prices perhaps slipping 5% or so but if someone else has theories, or facts, please share. For instance, Captain Bill, are the investors you are working with still snapping up properties?

[Captain Bill]

Originally Posted by liz451

I don't think investors will completely leave the market or dump properties in 2 years however if prices continue to rise the ROI will not be there for them anymore and they will leave the market to an extent (this just seems logical - if they can't make money on their rentals they won't buy).

My question is what will happen to the market when this happens - my uneducated guess is getting back to a normal amount of inventory and prices perhaps slipping 5% or so but if someone else has theories, or facts, please share. For instance, Captain Bill, are the investors you are working with still snapping up properties?

Each investor I was working with had a budgeted number of properties to buy, and they have all purchased their budgeted number.

I have since been turning down investors because they are looking for homes <$150k and it takes too much time to buy one now. I can't spend the amount of time required to find them homes now without charging them for my time. The last home that I purchased for an investor took around 25 offers, plus previewing about 75 homes.

Currently I'm spending most of my time working with listings.

The more accurate data on investors is in this chart below, courtesy of the Cromford Report. It shows the investor market still strong.

[Captain Bill]

Originally Posted by liz451

I don't think investors will completely leave the market or dump properties in 2 years however if prices continue to rise the ROI will not be there for them anymore and they will leave the market to an extent (this just seems logical - if they can't make money on their rentals they won't buy).

My question is what will happen to the market when this happens - my uneducated guess is getting back to a normal amount of inventory and prices perhaps slipping 5% or so but if someone else has theories, or facts, please share...

If investors leave the market, it will probably open the way for more of the mortgage buyers to fill the void. With the multiple offers involved today, there are many buyers who just can't compete, because the cash buyers are winning the bids.

[PHX Newbie]

Bill:

A quick question about the graph. How do they know the buyers are landlords? If they assume that buyers who's principal address is somewhere else are buying to rent out the home, then they are missing those people who are still buying homes (mostly condos I suspect) as vacation properties/future retirement homes.
While it might be safe to call those folks "investors", it would certainly be wrong to call them "landlords"