Real estate market volatility in Phoenix (Scottsdale, Chandler: sales, 2015, rentals)

[pjpalmieri]

I'm looking to buy a home in Phoenix within the next couple of years and had some questions regarding the real estate market in the area. Coming from Long Island, our real estate market fluctuates greatly. For example, a home I purchased a year ago for $315 was valued at aprox $475 about 5-7 years ago. The homes I am looking at in Phoenix are in the $300k range. My goal is to wait a few year so my home's value goes up, sell on the upswing, and move to Phoenix. My question is this... how much does the price of homes fluctuate in the Phoenix area? If a home is valued at $300k today, is it at a low point compaired to the last 5 years and expected to shoot up in price again?

[hikernut]

The low in Phoenix home prices was in 2011. By the spring of 2012 the prices had started moving up noticably. The Case-Shiller index for Phoenix is, if I remember correctly, up more than 20% in the past year.

Phoenix home prices have been very volatile over the past decade. It's really kind of crazy, in my opinion. Too much easy money and speculation, then the banks went 180 degrees and became very strict on lending. During the runup 2004-2006 you could see individual zip codes appreciating 50% or more in a single year. One the way down, some outlying areas dropped 60%-70% in price.

I have a hard time seeing prices going lower in the next two years. The supply is still pretty low here. Any prediction is going to be a wild guess... I'll guess that $300K home is $350K-$400K in 2015.

hikernut

[cy_flembeck]

Originally Posted by hikernut

The low in Phoenix home prices was in 2011. By the spring of 2012 the prices had started moving up noticably. The Case-Shiller index for Phoenix is, if I remember correctly, up more than 20% in the past year.

Phoenix home prices have been very volatile over the past decade. It's really kind of crazy, in my opinion. Too much easy money and speculation, then the banks went 180 degrees and became very strict on lending. During the runup 2004-2006 you could see individual zip codes appreciating 50% or more in a single year. One the way down, some outlying areas dropped 60%-70% in price.

I have a hard time seeing prices going lower in the next two years. The supply is still pretty low here. Any prediction is going to be a wild guess... I'll guess that $300K home is $350K-$400K in 2015.

hikernut

That $300k home now was about $240k a year ago so if anyone buys it in two years for $350-400k, they are crazy.

[DetroitN8V]

Originally Posted by cy_flembeck

That $300k home now was about $240k a year ago so if anyone buys it in two years for $350-400k, they are crazy.

Why? What if they believe the value to be $500k in the future? They might be right, or you may be. No one knows. That's why it's an investment, not a guarantee.

[Zippyman]

Originally Posted by cy_flembeck

That $300k home now was about $240k a year ago so if anyone buys it in two years for $350-400k, they are crazy.

Perhaps.. but the rentals I purchased a year or two ago at ~$70k are surrounded by recent sales at ~$120-$130k.. six or seven years ago you would have been lucky to buy one of those same homes at $250k..

If we dont have a spike in fuel prices, if the economy improves a bit, if interest rates stay low.. $250k might be possible again in 2015.. so is $50k.. booms dont last forever, but busts dont last forever either..

[Tall Traveler]

Originally Posted by cy_flembeck

That $300k home now was about $240k a year ago so if anyone buys it in two years for $350-400k, they are crazy.

Everyone will end up haivng to pay what the market will bear at that time. I live in Seattle area and Phoenix prices for housing are so bargain basement in comparison. That $300K house that becomes $400 K in 2 years would stil be a bargain today in Seattle area.

I bought 2 forecolsoed houses in Phoenix area at about 35% of thier price 4 years earlier when new. Now they're probably worth 50% more than when I bought them and probably another 25% in 2 years and that may still be a bargain.

The truth is that Phoenix real estate market is extremely volatile and still a great bargain at this time imo.

[youthinkso]

Originally Posted by Zippyman

Perhaps.. but the rentals I purchased a year or two ago at ~$70k are surrounded by recent sales at ~$120-$130k.. six or seven years ago you would have been lucky to buy one of those same homes at $250k..

If we dont have a spike in fuel prices, if the economy improves a bit, if interest rates stay low.. $250k might be possible again in 2015.. so is $50k.. booms dont last forever, but busts dont last forever either..

if Obama keeps playing politics with the XL pipeline there could be a very large spike in fuel prices. China has been calling for Canadian crude, so has the east coast of Canada. The US is decades away from being oil independent.

As for house prices...buy now or the odds are you will be paying mucho deneros in a couple of years.

[Zippyman]

Originally Posted by youthinkso

if Obama keeps playing politics with the XL pipeline there could be a very large spike in fuel prices. China has been calling for Canadian crude, so has the east coast of Canada. The US is decades away from being oil independent.

As for house prices...buy now or the odds are you will be paying mucho deneros in a couple of years.

Obama gets the blame if gas prices go up, do we get to assign blame retroactively to Bush for spending trillions of dollars on undeclared wars, the housing crash, leaving the office with unemployment at 10%, and the Dow at 5,000? I'm pretty sure truckers were paying $5 for diesel when he was in office as well..

You're giving the president far too much credit.

[john3232]

Originally Posted by Tall Traveler

....The truth is that Phoenix real estate market is extremely volatile and still a great bargain at this time imo.

Prices are still pretty good but it'll be interesting to see where they end up towar the end of this year.

Right now Chandler homes which sold around $160,000 in 2010 and are now over $200,000

Gilbert is not far behind.

My guess is that Chandler and Gilbert homes that peaked in 2006 for say $350,000 will probably get back to $240,000--$260,000 by the end of 2015

But I doubt we'll see 2006 prices again.

[Solere]

Why are single family homes in desirable neighborhoods of metro Phoenix selling for over $200 a sq ft, sometimes into the $300 a sq ft range? Seems awfully expensive, considering the current economic recession. Many of these homes are "flips" where the most recent sale occurred in the last three months, and now the same house is priced at over $100,000 more. A friend of mine in Scottsdale told me in his neighborhood that someone who bought a house two years ago is asking $190,000 more and did zero improvements to it. Another one of his neighbors lived in a house there for six months, put in new kitchen appliances and sold it for $57,000 more than he paid. Are people really paying the huge mark-up/profit that house flippers and sellers are seeking? When you look at the property's sales history, many current list prices are nearing peak pricing of 2005-07. If buyers have easy access to what a seller paid for a property, why are they rewarding a flipper with so much profit or a seller who did practically nothing to the house, with a profit? Is emotional buying taking over?