Insiders: Do you think Phoenix housing Price will drop? (real estate market, condos)

[john3232]

Originally Posted by sarichter

...The politicians need to figure out how to attract other types of work here. Until they do that, this state won't be stable when the economy fluctuates.

Exactly!

Hopefully the Phx metro will able able to snare companies leaving California but there is a lot of competition from other States. Chandler recently got Intel and that's a great catch!

Originally Posted by maurb

...

a). Too many people think the bottom is in. Any investor knows that movements in either direction tend to be the opposite of what the average Joe and the so-called experts expect. Back in the hey day of the housing bubble, every Tom, Dick and harry thought prices would keep on rising. We all know what happened since then.

I'm not sure I follow you. Are you suggesting investors are on the sidelines waiting for prices drop?

I watch the housing market in Gilbert and Chandler fairly close and have seen nothing to suggest home prices will be falling anytime soon. In fact many Gilbert homes are now listed at $100 per sq ft.

Last year at this time prices were in the low 60- high 70 range.

[Potential_Landlord]

Unfortunately, our Governor set another obsticle to our Arizona RE recovery by denying the DREAMers state IDs among other things. Nothing to better hurt your own RE market than telling your own youth with local roots and a proven way of life (no drugs, crime record, but with high-school and college degrees) that they are undesired and please go elsewhere. Who in there right mind would do that? I agree short-term this may have little effect, but long term there will be major repercussions when DREAMers are at the stage of renting / buying their own place. And they will sure tell their younger siblings, friends etc. about how "welcome" they were in Arizona. Not.
After I completed my Federal immigration procedures, I could apply for all AZ paperwork with no issues. I guess we cannot take this for granted any more.

[sarichter]

Originally Posted by Potential_Landlord

Unfortunately, our Governor set another obsticle to our Arizona RE recovery by denying the DREAMers state IDs among other things. Nothing to better hurt your own RE market than telling your own youth with local roots and a proven way of life (no drugs, crime record, but with high-school and college degrees) that they are undesired and please go elsewhere. Who in there right mind would do that? I agree short-term this may have little effect, but long term there will be major repercussions when DREAMers are at the stage of renting / buying their own place. And they will sure tell their younger siblings, friends etc. about how "welcome" they were in Arizona. Not.
After I completed my Federal immigration procedures, I could apply for all AZ paperwork with no issues. I guess we cannot take this for granted any more.

That's a whole different can of worms... I would agree that the more people that we allow to get documented (and make it cheaper to do so since it's so cost prohibitive to become a citizen here), the more tax money we collect for healthcare and educational services. It blows my mind that politicians (especially in this state) want to close the door on the exact type of ideology this country was founded on. Oh well... no one ever accused all politicians of being intelligent and tactful!

[maurb]

Originally Posted by john3232

Exactly!

Hopefully the Phx metro will able able to snare companies leaving California but there is a lot of competition from other States. Chandler recently got Intel and that's a great catch!





I'm not sure I follow you. Are you suggesting investors are on the sidelines waiting for prices drop?

I watch the housing market in Gilbert and Chandler fairly close and have seen nothing to suggest home prices will be falling anytime soon. In fact many Gilbert homes are now listed at $100 per sq ft.

Last year at this time prices were in the low 60- high 70 range.

I'm not suggesting investors are on the sidelines. They're already in the market just as they were in 2005 when every Tom, Dick and Harry thought housing prices only go up. Again, the majority thinking prices are going up is why I think there's more downward pressure.

As I said before, interest rates have to double just to get to historical norms(8 to 9%) which is only a matter of when, not if. If you think interest rates can double without a negative impact on prices, I'd love some of what you're smoking.

Oh, and lets not forget the demographic tidal wave coming our way as the Boomers start to downsize to condos and apartments.

[sarichter]

Originally Posted by maurb

I'm not suggesting investors are on the sidelines. They're already in the market just as they were in 2005 when every Tom, Dick and Harry thought housing prices only go up. Again, the majority thinking prices are going up is why I think there's more downward pressure.

As I said before, interest rates have to double just to get to historical norms(8 to 9%) which is only a matter of when, not if. If you think interest rates can double without a negative impact on prices, I'd love some of what you're smoking.

Totally agree with you with the exception that prices might not take that much of a hit. We may just see less total sales and more people renting. I agree that interest rates have to go up to definitely see stabilization in the market (refinance now while you can!). Prices though will probably stabilize in central Phoenix before they do out in the far suburbs. More business and more density in central Phoenix will take market fluctuations better than elsewhere.

[maurb]

Originally Posted by sarichter

Totally agree with you with the exception that prices might not take that much of a hit. We may just see less total sales and more people renting. I agree that interest rates have to go up to definitely see stabilization in the market (refinance now while you can!). Prices though will probably stabilize in central Phoenix before they do out in the far suburbs. More business and more density in central Phoenix will take market fluctuations better than elsewhere.

I think prices in general(nationwide) will take a hit. You might have a point in the sense that Phoenix might not suffer as much of a blow as cities in other regions like the Midwest and Northeast where a lot of Boomers are leaving for warmer climates in retirement. Also, the Phoenix Area with its low population density has much more room for growth than areas in the Northeast and Midwest do.

If more business locates to the area, I think Phoenix has the potential to be the next Houston where there's that optimal mix of affordable housing/Cost of living and a vibrant economy.

Also, I don't think water will be the issue that the anti Sunbelt crowd tends to spew about in other forums. We've had the technology to create man-made lakes. We'll have the technology to deal with any so-called water shortages in the future if in fact there are any in the first place.

[john3232]

Originally Posted by maurb

... Again, the majority thinking prices are going up is why I think there's more downward pressure..

Supply and demand. The supply is much smaller than two years ago and thus prices are rising. And unlike in 2003-06 current buyers are much better financial shape. In other words I don't think we'll see the massive defaults of five years ago and without a major increase in inventory I can't see a lot of downward pressure on pricing even if interest rates were to begin rising.

[maurb]

Originally Posted by john3232

Supply and demand. The supply is much smaller than two years ago and thus prices are rising. And unlike in 2003-06 current buyers are much better financial shape. In other words I don't think we'll see the massive defaults of five years ago and without a major increase in inventory I can't see a lot of downward pressure on pricing even if interest rates were to begin rising.

The supply is only smaller because A). Banks are keeping it artificially low by holding onto their portfolio of foreclosed properties, hoping to sell when prices rise. and B). Many of those who are underwater, can't sell and are holding out, adding further to this pent up supply. As this pent up supply gets released into the market(and it will eventually), it will counteract any price increase (balance out the demand) or in a more likely scenario, outpace the demand and send prices down further.

Again, this doesn't even take into account the demographic shifts taking place - Boomers downsizing, Gen Xers and Gen Yers not having kids(no need for that Mcmansion in the burbs) and fewer immigrants arriving.

[sarichter]

Originally Posted by maurb

The supply is only smaller because A). Banks are keeping it artificially low by holding onto their portfolio of foreclosed properties, hoping to sell when prices rise. and B). Many of those who are underwater, can't sell and are holding out, adding further to this pent up supply. As this pent up supply gets released into the market(and it will eventually), it will counteract any price increase (balance out the demand) or in a more likely scenario, outpace the demand and send prices down further.

Again, this doesn't even take into account the demographic shifts taking place - Boomers downsizing, Gen Xers and Gen Yers not having kids(no need for that Mcmansion in the burbs) and fewer immigrants arriving.

Yes... I don't see this being a problem. I say this of course because I own a condo (which there is a lower reward for because the risk is low... always a demand for it) and I'm not a fan of mcmansions. Personal preference that doesn't have anything to do with popular culture. All this said, people will adapt and it's not like Phoenix is losing a major industrial giant like some other US cities have in the past resulting in massive emigration.

[john3232]

Originally Posted by maurb

[color=black][font=Verdana]The supply is only smaller because A). Banks are keeping it artificially low by holding onto their portfolio of foreclosed properties..

Can you provide a link to your source?

If there was an abundance of shadow inventory we would have seen it hit the Phx market earlier this year when homes were selling like hot cakes.