Phoenix Real Estate Predictions 2018 (Surprise, Buckeye: buying, school rankings, calculated)

[MN-Born-n-Raised]

Originally Posted by Potential_Landlord

I see this thread is sliding off topic somewhat. Here's my opinion on RE values and school funding - this is probably one of the most important criteria where to buy a home. It doesn't matter so much if higher school funding = better education for my kids is (or somewhere in between). As long as parents act on this it matters for RE values.

Spot on! Perception is reality.

[Hal Roach]

Originally Posted by MN-Born-n-Raised

I've already explained this earlier. 1st semester of college taught us the basics (Econ 101 and stats). Reason: Outliers and law of diminishing returns. If I spend $1,000,000 an hour, I won't get a better person than $500K. Or $300K an hour or even $1,000 an hour (law of diminishing returns). Also, I underlined a statement, "ALL THINGS BEING EQUAL". So the question you should have asked is will Toyota get a better employee at $70 an hour versus Toyota at $35? ON AVERAGE, of course they will.

Since wages doesn't matter, how about I hire someone for 1/2 of what you make. Are YOU going to work as hard, smart, and will 1/2 wages motivate you to stay when someone wants to hire you for more money? I could give a thousand examples; have you observed the caliber of employee at Sam's Club versus the higher wage Costco? It isn't close. I'm a little surprised I had to type this ^^. It goes to show you how important education is (econ 101 etc).

I use the self-check at Costco....and your five year old GM is worth half as much as a five year old Toyota. And unfortunately, organized crime plays a roll in the auto industry as well as education. A few of my friends are ASU grads...pretty smart, both of them, one went to Sunyslope, the other Central......you would need a computer to count up the trashy worthless punks at those schools, but I just don't think of them as having gone to The Slope....and a lot of it had to do with their parents...as stated. But more on the subject of RE...what you will end up with is houses with a negative VA!UE, which is basically Pennsylvania, Ohio, and Michigan..teachers are overpaid, and the school district spends what they want to. Would you buy a 100,000 house with a 5000 dollar tax bill? Or next year when it is a 90k house with a 5500 tax bill? It is a viscous downward spiral. Meanwhile, there are 800 applicants for a firefighter position, and quite a few ivy leaguers would Lee me to make as much. Notice the Western States have nowhere near the low end market as the aforementioned States. Legacy obligations, or lack of, fiscal conservatism and refusal to be held hostage by the unions...and of course the evil old people. For every single family home in Phoenix under 50,000 dollars, there are 500 in Baltimore....complete with big spending liberals, sky high tax rates, and outrageous utility bills...and they do have one of the best univerrsities in the World (Johns Hopkins), but Berkeley has UCB, and in both cases, the average public school student would never be able to get a janitorial position at those universities.

[MN-Born-n-Raised]

Originally Posted by Hal Roach

I use the self-check at Costco....and your five year old GM is worth half as much as a five year old Toyota.

So you close your eyes at Costco until you self checkout? I drive a Honda.

[ShampooBanana]

Originally Posted by jimj

Have you entered into your calculations what will/might happen if/when the blocks of investor owned homes are puked onto the market?
We just had a couple of 'em put on and they listed for $15-20k less than comps.
My guess is instead of putting $$ into them for paint/carpet/cleaning they just figured they'd made enough off rent for the last 7 years and doubled the money they paid to begin with and so just wanted to sell off quick and who cares about the rest of the market...

Investor owned properties still make up less than 5% of the total in Phoenix, so I don't think they will have that much of an impact. Plus, they won't all be hitting the market at the same time. If they do then it's likely the result of something bad, in which case there is much more to worry about and they won't be the only ones flooding the market.

[jimj]

Originally Posted by ShampooBanana

Investor owned properties still make up less than 5% of the total in Phoenix, so I don't think they will have that much of an impact. Plus, they won't all be hitting the market at the same time. If they do then it's likely the result of something bad, in which case there is much more to worry about and they won't be the only ones flooding the market.

Thank you! Now what was this thread about?

[Hal Roach]

Originally Posted by MN-Born-n-Raised

So you close your eyes at Costco until you self checkout? I drive a Honda.

Honda US also has much lower labor costs than Detroit, and also makes much better cars. The Costco near my parents pays 11 per hour to start.....1 bedroom. apartments are closer to 1500, than 1000, but all the emphasis is on the poor teachers, who start at 48k with merely a BA. And for 14,000 per student year...GreatSchools rates the elementary, middle, high as all "3" or below. Taxes 4800 on a 350k house, and they were only 3800, when it was assessed at 472, ten years earlier....but let's start a food drive for the poor, underfunded teachers.

[MN-Born-n-Raised]

Originally Posted by Hal Roach

Honda US also has much lower labor costs than Detroit, and also makes much better cars. The Costco near my parents pays 11 per hour to start.....1 bedroom. apartments are closer to 1500, than 1000, but all the emphasis is on the poor teachers, who start at 48k with merely a BA. And for 14,000 per student year...GreatSchools rates the elementary, middle, high as all "3" or below. Taxes 4800 on a 350k house, and they were only 3800, when it was assessed at 472, ten years earlier....but let's start a food drive for the poor, underfunded teachers.

If you say so. "The lower you pay, the better the quality and service" is now called Hal's Economic Law. Or maybe we need to change the phrase: "You get what you pay for." to "You never get what you pay for."

So we are clear, I don't feel sorry for teachers or the guy flipping my burgers. My point is I want motivated, quality teachers to be teaching my kids / grand kids. Or putting it another way, I don't mind competing against people who have a disadvantage. Personally, I want them to do well. But if they are my competition, not so much.

For many, stats class wasn't their strong suit. So allow me to help. As a whole, teachers in PHX metro don't start at $48K. That's about the average salary and with 10 years of working experience. Several districts have an average wage of $38K like Buckeye Elementary School District or Roosevelt School District in Phoenix. Statistically speaking, that means the starting wage is lower. So based off of Hal's Economic Law, people should send their kids to the lowest wage districts because they are better.

I'll use my approach that appreciates motivated and talented teachers (part of which is related to wages), lower class sizes, and well funded advanced programs. Our family was involved in the school from K-12 so that we could figure out what teachers to ask for the upcoming year. That doesn't mean I cannot find the highest paid teachers and districts that spend thousands more per pupil and get garbage results. But I have already explained that earlier.

The bottomline is there are educated people and companies who have studied the school rankings that won't come to AZ because of the schools.

Meanwhile, we need to slash Toyota workers wages so that the quality can increase some more!

[MN-Born-n-Raised]

Originally Posted by jimj

Thank you! Now what was this thread about?

Good reminder Jim. My bad.

[MN-Born-n-Raised]

Originally Posted by ShampooBanana

Investor owned properties still make up less than 5% of the total in Phoenix, so I don't think they will have that much of an impact. Plus, they won't all be hitting the market at the same time. If they do then it's likely the result of something bad, in which case there is much more to worry about and they won't be the only ones flooding the market.

The saying use to be: "a house is only worth what someone is wiling to pay for it." When they tightened up the lending standards, now a section needs to be added which includes: "... and what an appraiser says it is worth."

If someone dumps their house with the exact same floor plan as you have, it could have a lingering effect. Someone could offer you more and if the appraisal comes in lower, that can give the buyer leverage to show the lower appraised value and ask for more off after it's off the market.

To take this a step further, if 100% of the buyers were loan based, it would have taken a lot longer for the prices to bounce back. Because 5 short years ago, close to 1/2 of the buyers paid cash. We didn't pay for an appraisal because we were cash buyers. So back then, investors who were often cash buyers actually helped bring in higher comps.

But to tie in an earlier post (Hal's Economic Law), we all should have bought less expensive homes because the quality was better! JUST kidding!

[jimj]

Originally Posted by MN-Born-n-Raised

The saying use to be: "a house is only worth what someone is wiling to pay for it." When they tightened up the lending standards, now a section needs to be added which includes: "... and what an appraiser says it is worth."

If someone dumps their house with the exact same floor plan as you have, it could have a lingering effect. Someone could offer you more and if the appraisal comes in lower, that can give the buyer leverage to show the lower appraised value and ask for more off after it's off the market.

To take this a step further, if 100% of the buyers were loan based, it would have taken a lot longer for the prices to bounce back. Because 5 short years ago, close to 1/2 of the buyers paid cash. We didn't pay for an appraisal because we were cash buyers. So back then, investors who were often cash buyers actually helped bring in higher comps.

But to tie in an earlier post (Hal's Economic Law), we all should have bought less expensive homes because the quality was better! JUST kidding!

I guess I will soon see what the impact will be as I pulled the house off the market and did a refi that will be appraised this week before the rentals sales close.

Going to be interesting to see in real time if what I thought would happen will actually happen...
What I "think" will happen is my house will appraise $15k +/- higher than the rentals are under contract for. Now the question is after those rentals close what will the comps be?