Possible First Time Home Buyer. Should I Wait? (Phoenix: sales, rent)

[Juram]

Originally Posted by MountainGuy74

Finally decided to stop paying my landlords mortgage and look at getting into my own home for the first time. I've lived here for a little over a year and have decided that Phoenix, specifically the northern side of town, is someplace I'd like to find a home. Not looking to buy anything new due to my serious dislike of any kind of HOA so I'm mostly looking at older neighborhoods where they have front and back yards and were typically built in the 80's.

I've been monitoring websites like Zillow etc and the home prices vary greatly even within the same street. I understand some are fixer uppers and others are complete remodels with pools so I get the price difference. I'm just wondering if perhaps I should wait a bit and see if home prices ad inventory changes. I was planning on starting my quest late this year or early next year so I do have some time to keep researching. What do you the experts in real estate think? Buy soon before prices rise and inventory shrinks or wait till next year where I won't overpay and there are more choices?

Thanks in advance.

Buy now. Prices won't be dropping off anytime soon and are only expected to continue rising, along with interest rates. Also if you're looking at North Phoenix, go as far north as you can afford. Just as the area along Metrocenter rapidly decayed, some of the nicer neighborhoods north of there are starting to fall apart a bit as well.

[Burkmere]

Originally Posted by Juram

Buy now. Prices won't be dropping off anytime soon and are only expected to continue rising, along with interest rates. Also if you're looking at North Phoenix, go as far north as you can afford. Just as the area along Metrocenter rapidly decayed, some of the nicer neighborhoods north of there are starting to fall apart a bit as well.

Usually what happens is whatever the "experts" are saying is wrong. Not saying prices will fall, but just stating what often happens.

Just like in stock trading, the contrarian approach works wonders. When the volatility index is in the 40s and everyone is scared out of their mind, that's when you buy. Also, when extreme complacency exists, beware.

[AZJoeD]

Originally Posted by Burkmere

Usually what happens is whatever the "experts" are saying is wrong. Not saying prices will fall, but just stating what often happens.

Just like in stock trading, the contrarian approach works wonders. When the volatility index is in the 40s and everyone is scared out of their mind, that's when you buy. Also, when extreme complacency exists, beware.

Except that people need to stop thinking about housing as they do the stock market. You are buying a place to live, not an investment that must make you money. Even when the housing crash occurred in 2007 rents did not stop going up. On the contrary, the more homes that went into foreclosure the higher rents went up (higher demand for rentals).

One thing that housing and stocks have in common is that until you sell you have not lost a penny. Some people panicked because the perception was they had lost money. But if most had ridden it out they would have lost nothing. It took 10 years but it all recovered. That is why you buy in a place where you like living so you don't have to move if you don't want too.

[Burkmere]

[quote=AZJoeD;49199659]Except that people need to stop thinking about housing as they do the stock market. You are buying a place to live, not an investment that must make you money. Even when the housing crash occurred in 2007 rents did not stop going up. On the contrary, the more homes that went into foreclosure the higher rents went up (higher demand for rentals).

One thing that housing and stocks have in common is that until you sell you have not lost a penny. Some people panicked because the perception was they had lost money. But if most had ridden it out they would have lost nothing. It took 10 years but it all recovered. That is why you buy in a place where you like living so you don't have to move if you don't want too.

I agree. Actually both our posts support the idea that housing is difficult to time. And it's probably not wise to try. That's really what the OP was asking. I was just contending that it IS hard to time. Could be up two years from now or could be down two years from now.

[asufan]

Originally Posted by AZJoeD

Except that people need to stop thinking about housing as they do the stock market. You are buying a place to live, not an investment that must make you money. Even when the housing crash occurred in 2007 rents did not stop going up. On the contrary, the more homes that went into foreclosure the higher rents went up (higher demand for rentals).

One thing that housing and stocks have in common is that until you sell you have not lost a penny. Some people panicked because the perception was they had lost money. But if most had ridden it out they would have lost nothing. It took 10 years but it all recovered. That is why you buy in a place where you like living so you don't have to move if you don't want too.

I sort of agree with this, if someone is in need of a house or needs a larger house and can easily afford it and plan to stay for several years, I wouldn't worry too much about current prices or where they are going. However, some people are over paying because they think they "need" to get in this house, or they are emotional and anxious about it. People need to do a little bit of research and make sure they are getting a decent deal based on the comps and not just put all of the responsibility on their agent or appraiser. I see some new houses in Chandler, on not the best land in Chandler, selling with price increases +45K from when they opened months ago. These are tract houses on 10,800 SF lots and are selling over $700,000+ with options but without pool. If these buyers would do some research they would see it's not a great deal and it would be tough to recoup their investment. People are just in a rush to build a new home in the area with the "hot" options they see on HGTV and are overpaying. I do agree though, these new homes have some great options.

[john3232]

Originally Posted by AZJoeD

Except that people need to stop thinking about housing as they do the stock market. You are buying a place to live, not an investment that must make you money. Even when the housing crash occurred in 2007 rents did not stop going up. On the contrary, the more homes that went into foreclosure the higher rents went up (higher demand for rentals).

One thing that housing and stocks have in common is that until you sell you have not lost a penny. Some people panicked because the perception was they had lost money. But if most had ridden it out they would have lost nothing. It took 10 years but it all recovered. That is why you buy in a place where you like living so you don't have to move if you don't want too.

True but I certainly wouldn't want to go through that again.

Although not everyone got creamed during the housing crash. There were people who made a lot of money. They bought and sold fast before getting out of the market by the end of 2006. Come 2010 they jumped back in and cleaned up.

[bryans1620]

Originally Posted by MountainGuy74

What do you the experts in real estate think? Buy soon before prices rise and inventory shrinks or wait till next year where I won't overpay and there are more choices?

Thanks in advance.

I think it's a good time to buy. Prices are still going up but I don't see the 'irrational exuberance' that we saw in 2005 leading up to the crash. My view is that, at worst, prices may reach a plateau and just stop going up. In a lot of the zip codes I work in, I am seeing some slower growth, but it is very different from zip to zip.

What particular areas on the north side are you looking for, Desert Ridge? Peoria?

[WSPHXPELON]

I'm in a similar position as the OP and personally I'm waiting for the next market correction before I buy. Yes, I know it might take a few years, bur personally I'd rather just wait...But I'm in no rush, whereas the OP may be...

[Rico Valencia]

Originally Posted by Juram

Buy now. Prices won't be dropping off anytime soon and are only expected to continue rising, along with interest rates. Also if you're looking at North Phoenix, go as far north as you can afford. Just as the area along Metrocenter rapidly decayed, some of the nicer neighborhoods north of there are starting to fall apart a bit as well.

Wow, you know absolutely nothing about the North Valley. I could just as easily say if you're thinking about buying a house in the East Valley, make sure you buy in Queen Creek because Gilbert and Chandler will become rundown and blighted like West Mesa.

The North Valley has many old neighborhoods like Moon Valley, Squaw Peak and North Central Phoenix which are many decades old and have remained highly desirable. Some of the best neighborhoods with the best schools in all of Phoenix are in the North Valley like Norterra, Desert Ridge, Anthem etc. The reason the Metro Center area went downhill was due to all the section 8 apartment complexes they put up in the 90s and has nothing to do with other North Valley nieghborhoods.

[locolife]

Originally Posted by WSPHXPELON

I'm in a similar position as the OP and personally I'm waiting for the next market correction before I buy. Yes, I know it might take a few years, bur personally I'd rather just wait...But I'm in no rush, whereas the OP may be...

What if the next correction takes 10 years or more and what if the drop is just 5-10%? Are you still good with waiting? A lot of people seem to think massive corrections of 40% or more happen regularly, before the drop in the early 2000's home prices had climbed steadily since roughly the 1960s, with a few minor dips here and there. With a 15 year mortgage you can have more than half of a home paid off in 10 years.