fountain hills real estate insanity

[fluffythewondercat]

Originally Posted by DetroitN8V

What does overpriced even mean? Don’t buyers determine the market value?

Thank you for injecting a note of sanity into this sometimes-bewildering thread.

[fluffythewondercat]

Originally Posted by Tall Traveler

In this context, probability of future appreciation or less depreciation (assuming the bubble concept were correct). I would have said in 2006, for example, that house prices in Phoenix were overpriced. Because I thought house prices were underpriced in he area in 2011, I purchased 3 houses here.

So it's a personal perception, not a yardstick. You might as well have said "guessed" instead of "thought."

Not that there's anything wrong with guessing correctly. I've done that in the past and profited handsomely.

[Tall Traveler]

Originally Posted by fluffythewondercat

So it's a personal perception, not a yardstick. You might as well have said "guessed" instead of "thought."

Not that there's anything wrong with guessing correctly. I've done that in the past and profited handsomely.

Well I would say I thought and then I guessed, I didn't just guess. You may have just guessed but if there was no forethought, then just a lucky guess.

As to whether or not overpriced and underpriced is a personal perception and not a yardstick, I would disagree in this sense....the future value of real estate in this case will determine whether or not the housing price was overpriced or not when you bought. I guess if that's is a personal perception, then I would say that it would be a common personal perception of intelligent people.

[LadmoFan]

The market determines price. If there is keen competition for housing that will reflect the price.

[Andrew Wilson]

Originally Posted by Zathras

Yeah, I didn't state that very well. I always think of PV as a part of Scottsdale but it isn't really. As its own town, PV is certainly at or near the top.

Within a given city there are also going to be substantial fluctuations. Even within FH, it fluctuates from the mid 140's to over 200/sf, with most in the upper 100's. Within Scottsdale there are areas under 150 and areas well over 300.

But to say that FH is 'much cheaper than the rest of the valley' is nonsense.




This is also nonsense in my experience. I've lived there 8 years and no one I know thinks it's 'not that great'.. (except for this one guy that hates AZ in general and whines about everything...)

But it's a desirable area overall. If there were actually all these people 'realizing it's not great and trying to move', they wouldn't be listing for more than they're worth. That's not how supply and demand works.

I wonder where you get your statistics from and I also wonder who the folks are you talk to. I think your looking at a very narrow scope of people. Additionally, I have also noticed that there is similarly priced homes in Mesa and Gilbert that sell much quicker, thanks to there being much more going on in those areas than Fountain Hills. If you notice homes in Fountain Hills tend to sit for a while.

[Andrew Wilson]

Originally Posted by Zathras

This isn't true at all. FH has a higher avg cost per sf than most of the closer-in suburb cities. Scottsdale is the only one higher than FH.

Depends at what zip you look at. If you look at areas like Desert Hills and the Userey Pass area you will find that they are about the same and often times a bit more than FH. Then you add property tax, Fountain Hills property tax is generally extremely low for what you can get, compared to similar areas in the valley. Often times there is no HOA as well. Keep in mind, we are talking about custom homes here, ofcourse they are going to be more than other valley suburbs. So yea, Fountain Hills is more expensive than Gilbert, but keep in mind things like the area, houses, etc. It's still cheaper than much of the valley. That being said, do I think it is overpriced? Absolutely! In fact I would say 80-90% of all valley real estate is.

[john3232]

When I bought in 2010 a Fannie May loan had strict guidelines. It wasn't possible to get a loan without following stringent qualifications including verification of employment a second time just before closing.

The Gilbert home I bought for 150 grand in 2010 now sells for 300 grand which is still well below a peak of 360 in 2006.

Similar situation which the Chandler homes I own. Prices have gone up by nothing the way they skyrocketed in 2004 through 2006.

Buying back in 2005 was much different as well. That year any and everything on the market got multiply offers.

While I agree people do forget I tend to believe the local builders haven't.

The wild card is the government and how easy they will hand out a housing loan.

[MN-Born-n-Raised]

Originally Posted by john3232

The wild card is the government and how easy they will hand out a housing loan.

Indeed. Let's not forget about interest rates. A major the reason why houses are overpriced is because too often, people buy "payments". As in, "gee, I can afford $3,000 a month house payment. That means I can be house-poor and borrow $575,000 for 30 years (4.7 APR)". When the 30 year APR was a point less or 3.7%, then people thought they could afford another $75K more in debt or $650,000 and borrow $3,000 a month for thirty LONG years.

I've never like that approach. So yes, cheap and easy money has always been the cause for (too) fast housing appreciation. If you double the interest rate from 4.5 to 9 percent and make it more difficult to obtain, all of a sudden that $575,000 home will be worth a lot less. Maybe $375,000. Guess what, the "payment" is still $3K a month at an 9% APR. but now, the cost of housing is closer what it is really worth. All of a sudden people just starting out who save, have a snowballs chance in hell of buying in CA, NY, Boston, etc.

[jimj]

Originally Posted by Tall Traveler

I don't think that's correct at least not according to the link below:

https://en.wikipedia.org/wiki/Colorado_River_Compact

The allocation of the lower Colorado River is:

Cali - 58.7%
Zona - 37.3%
Nevada - 4.00%

Cali has been using part of the allocation that Arizona hasn't used. If Arizona needs more water, they can take back the excess granted to California.

If someone has a different calculation, would love to read the link.

This was brought out last year that CA has in it's water rights the right to cut off AZ in case of severe drought.

Here's how the deal among states works, in a nutshell: As Lake Mead gets lower, Arizona has to start cutting back on its take; so does Nevada, which agreed to share Arizona's pain. California gets to keep its whole share, for as long as there's enough water on the river. Wait, why does Arizona get such a raw deal? It goes way back to 1968 — Arizonans wanted to build the CAP Canal to take more water but needed California's congressional support. California agreed, as long as it got to keep the water when things got dicey. So yes, Arizona gets the short end on this deal. On the other hand, if the CAP Canal hadn't been built, Arizona wouldn't have been able to get much water out of the river anyway. The canal helped provide for a lot of new growth in Phoenix and Tucson. Some parts of town get water from reservoirs inside the state, but ...

https://www.azcentral.com/story/news...ught/13883605/

And:
https://www.nytimes.com/2014/06/18/u...cials-say.html