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Old 08-08-2012, 08:21 PM
 
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I read an article on phoenix Business Journal, saying housing price may drop. I am not sure about the conclusion as I am not the expert. I will like to listen to your opinions. Thanks. See link:

Fiserv Case Shiller predicting Phoenix home values to decline - Phoenix Business Journal
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Old 08-08-2012, 08:52 PM
 
Location: Anchored in Phoenix
1,942 posts, read 4,261,300 times
Reputation: 1779
Well you are going to get opinions from people based on their biases. Real Estate brokers and landlords will tell you the prices will go up. Renters like me will tell you the prices will go down.

Think of phoenix as 1% of the population of America. It is a good cross-section. The fiscal cliff is months away (not years away). Spending cuts and tax increases, including on middle class. It does not take anyone with more than a sixth grade education to conclude there will be less money in our wallets to spend on mortgage payments when the spending cuts and tax increases kick in. Even those lucky enough to not have their spending money cut will have to worry about their next door neighbors - do they work in defense? One spouse might lose her job. Then they could not afford payments on that house next door to you. Then they get a NOD. Then Foreclosure. The value of your house drops. Think General Dynamics, Honeywell, Boeing, Orbital Sciences and other companies in Phoenix. Even non-defense jobs will be cut as the spending cuts are in social security and medicare administration.

Now you tell me what you think the Phoenix house prices will do...Oh...Time period starting in Summer when any unemployment payments are stopped.
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Old 08-08-2012, 08:58 PM
 
1,517 posts, read 3,273,981 times
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I'm no expert but I can say that if you put things in their simplest form, it's usually obvious.
The facts are that there are WAY more buyers than sellers right now. More buyers than sellers equals people bidding things up. At least in the short term.
I have a few friends in the RE biz and they are complaining that there is no inventory. It's hard to sell something that isn't there.
I have a good friend that is trying to buy a house here. He found one in the hills east of AJ. Almost in Gold Canyon. Asking price was 110. He checked the comps and offered 137,500 and was outbid by 22K. It sold for 50K more than asking.
Sounds like a sellers market to me except prices haven't gone up all that much yet but what do I know.
I'm sure Captain Bill will be along to give us some stats.
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Old 08-08-2012, 09:47 PM
 
Location: Rural Michigan
6,333 posts, read 13,176,431 times
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Quote:
Originally Posted by greenthinker View Post
I read an article on phoenix Business Journal, saying housing price may drop. I am not sure about the conclusion as I am not the expert. I will like to listen to your opinions. Thanks. See link:

Fiserv Case Shiller predicting Phoenix home values to decline - Phoenix Business Journal
They're predicting a 9.5% fall in prices, but with statistics, you can twist them into knots and never tell the truth, especially when the sample area is the size of the Phoenix area. According to the stats from our MLS, around 68% of the pending contracts signed in the past 30 days are for homes under $200k. If you look at the amount of houses available for under $200k, and compare that with the real-world demand right now, the idea that a $200k property today is going to lose 20k in value over the winter is just silly. There's no other word for it.

This has been going on for years, we're already seeing buyers that either foreclosed or sold-short coming back into the market, ready to buy again & that market is going to continue to grow.
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Old 08-08-2012, 10:55 PM
 
1,087 posts, read 3,241,626 times
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As someone who is still actively looking in both the Phoenix and Tucson areas in case my current deal falls through, I can tell you that in the under $115,000 price range, the prices are still steadily increasing in both cities, and there are more buyers than homes. The house I have a contract on is quite a ways out from where I wanted to be, because it was getting next to impossible to find a good one in that price range that wasn't already contingent or didn't have multiple offers, in my preferred areas. I'm not seeing much of a summer slump, so I don't think we'll see prices decreasing anytime soon, at least not in that price range. I think we've already seen the bottom. But I'm no expert.
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Old 08-09-2012, 12:32 AM
 
10,720 posts, read 18,934,695 times
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I have to side with the realtors on this issue. The supply continues to drop. It's hard to see how prices will fall when the supply of homes continues to fall. I'm finally starting to see demand for large luxury homes. Sure there are plenty available but most of them are grossly overpriced and have been on the market for months without any real offers, but whenever I've seen a quality home that is accurately priced, it's gone and by gone we are talking less than a week. A year ago, those same homes would have sat on the market and the sellers would have been forced to drop their price.

Last edited by azriverfan.; 08-09-2012 at 12:45 AM..
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Old 08-09-2012, 08:21 AM
 
Location: Sonoran Desert
35,270 posts, read 45,368,808 times
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Quote:
Originally Posted by Howard Roark View Post
Well you are going to get opinions from people based on their biases. Real Estate brokers and landlords will tell you the prices will go up. Renters like me will tell you the prices will go down.

Think of phoenix as 1% of the population of America. It is a good cross-section. The fiscal cliff is months away (not years away). Spending cuts and tax increases, including on middle class. It does not take anyone with more than a sixth grade education to conclude there will be less money in our wallets to spend on mortgage payments when the spending cuts and tax increases kick in. Even those lucky enough to not have their spending money cut will have to worry about their next door neighbors - do they work in defense? One spouse might lose her job. Then they could not afford payments on that house next door to you. Then they get a NOD. Then Foreclosure. The value of your house drops. Think General Dynamics, Honeywell, Boeing, Orbital Sciences and other companies in Phoenix. Even non-defense jobs will be cut as the spending cuts are in social security and medicare administration.

Now you tell me what you think the Phoenix house prices will do...Oh...Time period starting in Summer when any unemployment payments are stopped.
I agree that macro factors will influence home prices in PHX more than they did this year, but the indicators are UP not down. As for the so-called fiscal cliff; it is just media buzz. Ain't gonna happen. Demand, not headlines, drives business expansions. Look for an accelerating recovery this fall into next year along with home prices rises of 10% in the Phoenix area. You read it here first.
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Old 08-09-2012, 10:06 AM
 
Location: Centennial, CO
2,073 posts, read 2,586,709 times
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I have to agree with what most others are saying. Consider that most of the data the media is going off of is months old. For more recent data a good place to follow is The Cromford Report, which tracks prices and inventory on a daily basis. Michael Orr who puts it out has been bullish on the Phoenix housing recovery and has indicated since at least early this year that Phoenix is ahead of the pace in terms of housing recovery and price increases compared to the rest of the nation.

Yes, macro factors will have some impact, but if you look at what is happening locally (much more important) you will see that there is job growth, office and industrial vacancy is down and absorption is up. There is an uptick in number of leads for technology and industrial businesses. Defense cuts will hurt a little, as will likely loss of US Airways HQ in Tempe, but that will be offset by increases at Intel once they are fully on line, Boeing getting a new UAV contract, and Luke getting the F-35's. Plus there is continued growth in healthcare employment, and now an increae in construction employment as well with a plethora of multi-family being built and the start of some single-family developments once again (trying to meet the DEMAND for new housing as a response to lack of current inventory, as well as population growth). There is finally spec industrial being built, especially in the West Valley. These are all positive signs.

Personally, I bought a house about 3 1/2 months ago. I looked around and would put offers in on homes only to find out there were already 3-4 other offers on them (within a week!), most by cash buyers. While I was lucky to get mine, while going through the closing process I was told there were at least 2 other interested cash buyers who would pay me $25,000-30,000 more than I offered if I would sell to them after I closed. I was tempted, but sure as heck didn't want to have to go through the process again! Only 3 months later, I am already doing a streamlined refi because I can still get a full 1% lower on my interest rate (to 3.25%). As long as rates remain low, inventory remains low, and with the overall positive signs of a Phoenix economic recovery ahead of most other places, I can easily see a steady increase in home prices over the next few years.

Last edited by ShampooBanana; 08-09-2012 at 11:09 AM.. Reason: Typo
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Old 08-09-2012, 10:56 AM
F40
 
Location: 85379^85268
826 posts, read 793,176 times
Reputation: 403
I agree with Ponderosa.
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Old 08-09-2012, 09:10 PM
 
Location: Anchored in Phoenix
1,942 posts, read 4,261,300 times
Reputation: 1779
Okidokie! Bookmarked!

Quote:
Originally Posted by Ponderosa View Post
I agree that macro factors will influence home prices in PHX more than they did this year, but the indicators are UP not down. As for the so-called fiscal cliff; it is just media buzz. Ain't gonna happen. Demand, not headlines, drives business expansions. Look for an accelerating recovery this fall into next year along with home prices rises of 10% in the Phoenix area. You read it here first.
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