Phoenix Metro Housing back to 2006 Prices? (Tempe, Surprise: sales, renters, insurance)

[jimj]

Where do y'all see Phoenix Metro home prices going? Are we ramping up too fast, too high, just right or more to go?

Correction coming?

What's your opinion?

I know the house we're in is almost back to it's original pre-crash sales price.

[MN-Born-n-Raised]

Originally Posted by jimj

Where do y'all see Phoenix Metro home prices going? Are we ramping up too fast, too high, just right or more to go?

Correction coming?

What's your opinion?

I know the house we're in is almost back to it's original pre-crash sales price.

Our house is way up from the bottom (we bought in early 2011). Today, it is worth about $325K ($350K MAX and wishful thinking). It sold for about $500K in 2006. It has a LONG way to go (Surprise) before the market is back.

[ShampooBanana]

It really depends on where you are. Some areas got hit harder than others in the Valley. That said, average prices in Phoenix have still not reached that high-water mark set back in 06.


Just take a look at the Case-Schiller Index: S&P/Case-Shiller Phoenix Home Price Index - S&P Dow Jones Indices


Only a few cities have eclipsed their pre-crash high-water marks - notably Denver and San Francisco. A few others like Boston, Charlotte, and Seattle are right about where they were pre-crash. Phoenix and other markets that got hit hardest like Las Vegas, LA, and Tampa still have a way to go. It's hard to believe how so many places are still feeling the effects of events that happened almost a decade prior.

[Zippyman]

the only measure of a bubble that I trust is rental parity.

When buying a $400,000 house costs most of $3,000/mo and you can rent the same house for $1,300 /mo, then you have a bubble. <-------- we had this before the crash

When buying a $75k house costs $500 /mo & renting that same house costs $1,000 /mo then you have a rental-bubble.. <---- this is when Canada "invaded" Phoenix!

We currently have a median sales price of $200k~ish, & buying is still a teeny-bit cheaper than renting at that level..

Renting & buying are at relative parity, so there's no incentive to walk away from a loan & not much incentive to buy, unless you just don't like being a renter.

Short of an economic meltdown where gobs of people become unemployed, the outlook is "meh", up & down as buyers cash out, renters decide to buy, a few owners decide to rent..

[Ponderosa]

My area is no where near what it was at the peak. Maybe 2002-3 right before the boom? 12-15 years of zero net appreciation. Rents are way up though, probably at a record.

[sandy6879]

My area is edging closer. We have a number that, if property values rise to, we've said from day 1 we will sell, take the money and run. It's steadily getting closer to that number. We had a realtor come in about a month ago and do a valuation. We're seeing houses go under deposit within a day of going on the market. Whether it's a bubble or reality, I don't know.

[john3232]

No. Prices in the areas I own (85205 and 85249) are in the early 2005.

2006? Doubt we'll see such prices anytime soon.

[stevek64]

I look at what my home owners policy says/what it values it as the cost to rebuild "new"/inflation adjusted. That to me shows what it's really worth fairly accurately. Anything above/below is Mr. Market supply and demand games. No different than how the stock market gives a discount/premium to a stock on any give day/year.

Looking at what my HO policy says now and what home prices are going for now in our area, the market seems very close to valuing the house for true cost in labor/materials.

I remember when we bought a few houses around the bust it was amazing the disconnect between the price we paid and what we had to insure it for. I'm sure the same happened in reverse around the boom.

Lots of people still upside down who bought in the peak years. We have friends who bought a home at the peak in Surprise and paid about 350k for a basic 2k sqft home that dropped to 130k or so in the bust and is at best worth 230k now. What I've noticed in our area over the last year or so is many people who had rentals cashed out and sold them to primary homeowners.

[JGMotorsport64]

Central areas are hot right now.

My house is pretty close to its 2006 valuation (Midtown Phoenix). My Tempe Rental rents for more than it ever has.

[jimj]

So it seems it might be area specific? As for the insurance valuation, our valuation is right were it was at the boom high.
Our pricing is only $30k+/- from the high out in the west valley.
I think the rental prices @ $1200 +/- per month is right at or slightly more than if they bought the same house.