It's a bad time to buy a house in the valley (mortgage, credit score)

[Zippyman]

Originally Posted by ddandano

I thought it was a given that this market was "frothy". I am sincerely surprised to see people are of the opinion that there is still upside to Phx area real estate.
-If rates go up conventional wisdom says prices go down (I know..I know.. it is not a hard and fast rule)
-If deportations start happening it will free up tons of real estate.
why am I wrong?

Rates going up & prices going down just hasn't happened in the real world. It's not a "hard and fast rule", nor is it a "soft and squishy rule" - it's not a rule that's supported by data at all. Unless we've get another Reagan in office, rates will only go up when economic activity supports an increase. The fed will keep printing until that happens & the past few years have shown that no country in the world can prevent us from doing that. If you believe anything else, you need to stock up on bottled water & ammo & your "debt" shouldn't be any concern at all - you can pay your debts after the crash with wheelbarrows full of worthless currency.

As for deportations, that might free up lots of low-end rentals, but that demographic isn't buyers, and they aren't known for being highly-paid/skilled workers who could afford even "median" housing prices. A drop in that population could reduce school taxes, hospital bills & jail populations as well. Supposedly it's "racist" to count the jail population based on legal immigration status, but I've seen estimates as high as 30% and I'd actually believe 10% - which could affect our property taxes in a good way.

I don't think the opinion is that there's a major upside, just that there's no basis to expect a crash. The previous crash was inevitable based on rental parity - those numbers have been even more consistent than any other measure of economic health that's ever been studied. I *do* believe that rents have been "juiced up" by corporate/hedge fund landlords, but at this point, there's no good way to quantify exactly how much they're affecting rents & renting & buying are still in reasonable parity.

[American Expat]

I think Phoenix market is stabilized and likely to increase over the next couple of years. All other big cities in the west (LA, SD, SF, SJ, Portland, Seattle, Denver) have much more expensive housing.

[ShampooBanana]

Originally Posted by American Expat

I think Phoenix market is stabilized and likely to increase over the next couple of years. All other big cities in the west (LA, SD, SF, SJ, Portland, Seattle, Denver) have much more expensive housing.

There is some definite truth to this. Phoenix is a relatively affordable market compared to most western markets (it has been for a while, but the disparity is growing as places like Denver, Portland, Seattle, etc, become ever more high priced). There is plenty of anecdotal evidence to show that people from high COL places like CA have been moving here in increasing numbers, and if you look at the net in-migration numbers from other states California is indeed #1, with a number of other more expensive western states also prominent. There have been some highly publicized company relocation announcements from CA to AZ in the past couple years, as well, and I'd expect that to continue somewhat, especially as AZ continues to provide a more business friendly environment and if it can attract enough qualified talent (which has always been the #1 inhibitor to business growth in this state, with quality of schools a close second).

[WSPHXPELON]

Thanks everyone for the replies. As of today, 33% of people on this thread think that waiting for the next crash/correction would be the better choice. That's an even higher percentage than I would have guessed. I guess it will be fun to revisit this thread in a few years and see how our predictions faired.

[ElleTea]

I think the best time to buy a house is when you are ready to buy a house.

[wase4711]

Originally Posted by ElleTea

I think the best time to buy a house is when you are ready to buy a house.

agree 100%

there is no such thing as a perfect time; although, a year ago, when prices were super low, and mortgage rates were historically low, was probably the best time we will see for quite some time..
the only problem with that was, for someone like me, who bought at the peak before the crash, and paid top dollar for their house, had to wait awhile until house prices started to come back, so I could sell my 12 year old house without losing my shirt!

now, the value is close to what I paid 12 years ago, so its going up for sale on May 1 or sooner...Time to get out to Arizona, and say goodbye to the nightmare of Illinois Politics and Chicago winters!

[JGMotorsport64]

Originally Posted by BIG CATS

There are already signs of another impending crash. I just read an article the other day about subprime mortgages being dished out again (both in the home and auto world). In fact, just got my new Motor Trend magazine today, and guess what? They're already seeing the same thing and warning people.

You take investment advice from MotorTrend?

[DetroitN8V]

No bubble unless orange boy successfully repeals Dodd Frank, then lenders may get sloppy again and we'll have a rerun on our hands.

[wase4711]

I think the lenders are moving towards that again; I have already received mortgage offers with just 1% down, so that might be a sign of lax lending rules moving forward...although I do have an 800+ credit score, so who knows...

[ElleTea]

Originally Posted by wase4711

I think the lenders are moving towards that again; I have already received mortgage offers with just 1% down, so that might be a sign of lax lending rules moving forward...although I do have an 800+ credit score, so who knows...

I think 3% is still the standard for most loans these days.