Caution! Home buyers! Possible price correction coming to Phoenix! (Mesa: best cities, renting)

[Bondurant]

Originally Posted by Kate2345

Prickly Pear, you don’t even need that much of a down payment to buy a home. For those of low or moderate income, you possible need NONE. But you can get a conventional 3% down. If you’re a first time buyer cash out your IRA.

Are you a financial advisor? I hope not.

[Kate2345]

No, I’m just realistic about real people. Freezing your rent is a good idea for lots of people. There’s no need to be nasty. I do think cashing out your IRA to buy your first home is a good idea for most people who can’t otherwise do it. Just my view based on how most people actually live.

[locolife]

Originally Posted by Prickly Pear

The downside to all of this is if there’s a downturn in the market it will be worse economically for a lot of people than in the past, because renting if not buying needs even more of a correction. One bedrooms in Mesa for $1400/month? I mean come on. I’d never pay that much to live in Mesa. Rents starting at 1000 and steeply climbing in Ahwatukee? Close to 2000 in Downtown and Scottsdale?

I'm not disagreeing that a rental price correction may happen but the prices you're quoting seem higher than average, maybe these are for luxury units?


I have a friend that recently moved to Camden in downtown Phoenix and is paying around $1200 per month on a 1 bedroom, I thought for sure it was going to be much higher than that. Sure, the high-rises are closer to 2000 but you pay a premium to be there. I've got another buddy who has been renting in midtown for 2 years now and pays exactly $1000 for a 1 bedroom unit that includes a garage. Phoenix still feels like a huge bargain compared to what my friends in Denver and Boston are paying.

[JGMotorsport64]

Originally Posted by locolife

I'm not disagreeing that a rental price correction may happen but the prices you're quoting seem higher than average, maybe these are for luxury units?


I have a friend that recently moved to Camden in downtown Phoenix and is paying around $1200 per month on a 1 bedroom, I thought for sure it was going to be much higher than that. Sure, the high-rises are closer to 2000 but you pay a premium to be there. I've got another buddy who has been renting in midtown for 2 years now and pays exactly $1000 for a 1 bedroom unit that includes a garage. Phoenix still feels like a huge bargain compared to what my friends in Denver and Boston are paying.

No she’s correct. Apartments in the EV are going 1k+ in sleazy areas.

[wilberry]

it is true what is happening is investors are " renovating " and then raising the price of the apt by 400 to 500 a month in some areas . m y 2 bd two bath which was built in 2018 went from 1100 to 1390 , this is a new trend here on Phoenix metro . Also they are not building regular apts , they are building mostly " Luxury " apts. the " local market rate " is n ow at an all time high .

[Prickly Pear]

Originally Posted by Kate2345

Prickly Pear, you don’t even need that much of a down payment to buy a home. For those of low or moderate income, you possible need NONE. But you can get a conventional 3% down. If you’re a first time buyer cash out your IRA.

I don’t have an IRA, but if I could gain back my 12% contributions to the pension then I’d definitely be able to buy a solid place for myself, maybe 13% or so down on a condo but closing costs would be a stretch at that point. Unfortunately that’s not an option, unless I leave my job, and if it was I’d have no retirement. I do fairly well as a single-income individual, but part of that luxury is having roommates and never again renting from an apartment complex, unless all utilities (including electric) is included in the base rent. Even with 13% down I’d still need a roommate at current market prices. And that is coming from me, someone who is doing pretty well despite having a bad year financially.

Also I’m not looking to buy here. I do look at what’s available because I’m curious, but I’m sort of capped here in my career (in upward mobility and pay) and as such I’m not planning on buying.

Originally Posted by john3232

The property management company recommends a rent but the owner makes the final decision.

However, I agree it's best to rent direct. You meet the owner, they meet you.

My renters call me up for something and I'm over there within a hour. In turn I expect them to abide by the terms of the lease agreement.

I've got my own bills to pay so I insist rent be paid on the 1st of the month.

If I have to chase down the rent, find out AC filters aren't being changed or someone is living there who shouldn't be the lease will not be renewed.

Out you go.

On the other hand I won't raise much assuming I do if renters pay on time and take care of my property.

It's not rocket science. I was a renter for over 30 years. I paid on time and took care of the apartment. Always got along with the owner.

Our landlord is a good guy and we get along. Tempe has some real nasty landlords and we got lucky. We will probably renew our lease at the end of the month, so long as our landlord is reasonable. My last apartment increased the base rent by $250/month, which of course we declined, as they changed nothing from the time we lived there. No upgrades or nothing. Absurdity.

Originally Posted by locolife

I'm not disagreeing that a rental price correction may happen but the prices you're quoting seem higher than average, maybe these are for luxury units?


I have a friend that recently moved to Camden in downtown Phoenix and is paying around $1200 per month on a 1 bedroom, I thought for sure it was going to be much higher than that. Sure, the high-rises are closer to 2000 but you pay a premium to be there. I've got another buddy who has been renting in midtown for 2 years now and pays exactly $1000 for a 1 bedroom unit that includes a garage. Phoenix still feels like a huge bargain compared to what my friends in Denver and Boston are paying.

Your friend is getting a steal for Downtown. Tell them to never, ever move. Your Midtown friend is also getting a pretty good deal. Back when I was looking I was looking at Midtown and found units listed there but had hidden fees (see below as an example).

Also luxury apartments are the only thing getting built these days, and regular complexes are getting vinyl floors in one room and “new” kitchen making them “luxury” units. So there’s not much else to rent outside of that, the units that are not upgraded are hard to find.

Originally Posted by JGMotorsport64

No she’s correct. Apartments in the EV are going 1k+ in sleazy areas.

Cheapest apartments I’ve seen where $800 starting and we’re outdated, poorly maintained complexes near some rough areas like the I-17. I can have found somewhat decent places at around the $1k/mo mark but found they had some absurd hidden fees (your electric bill is for the whole complex, $7 for laundry [wash and dry] per load, pay for a parking spot, hidden monthly required fee for gym on site, etc.) that in reality bring them up to apartments with just higher listing prices.

[wilberry]

" My last apartment increased the base rent by $250/month, which of course we declined, as they changed nothing from the time we lived there. No upgrades or nothing. Absurdity. "
yes Prickypear this is ridiculous what is happening here. I am in a good job , great company , good raises but the rental and home prices within commuting distance ( 30 mins ) of my office are not even viable anymore .
My next move when my lease is up is rent a townhouse or condo from an individual or management company , never ever a complex again in this city . I have found very nice Townhouses for 1100 to 1200 in different areas that might not be that great as far as the type of people , crime, homeless but there a good pockets all over.
IF they ever build townhouses again like they used to I will by one of those as long as the HOA fee is under $ 400. pre- 2017 was the time to buy affordable homes for a one income person.

[autism360]

Originally Posted by ShampooBanana

Oh, the homebuilders are VERY willing to build more homes (more homes = more revenue = more profit). It's just that they literally CAN'T. The decimation of the construction labor market, high land and materials prices, needless municipal and state regulations and impact fees, and lack of readily available land in which to build in many markets without huge lead times thanks to said regulations makes it nearly impossible in many markets to build what needs to be built at a price that is affordable to many. Not to mention many of the homebuilders that existed before went out of business or were bought up by bigger builders because of the crash. Land developers, too.

It's a tough business, with profit margins not quite as high as you might think, and the builders that are left are trying their damndest to grow as much as they can because they all believe the economy will remain strong and demand is there. Actually being able to do it is different matter. This is spoken as someone who personally knows every big builder in town and speaks to their leadership on a regular basis. Trust me, they are ALL trying to grow but they have some pretty big hurdles to overcome.

I believe that the lack of homebuilding is due to the fact that homebuilders that got caught up in the overbuilding craze of the mid 2000's either had to go out of business or were financially taught a painful lesson. Now however home builders have less competition and have changed their business models so they are building less homes and they are focused on building homes with higher profit margins. Home builders used to build starter homes but they will not build them when they can build fewer higher end homes with bigger profits and less work. It does not bode well for the first time homebuyer who is stuck fighting with all the big corporations with cash buying every resale home under 250k before it even listed on the mls in many cases.
Eventually builders from other areas will see the opportunity and start building new developments but they will be far away where the land is cheap or perhaps they will partner with the Indian tribes and lease the land in order to build homes closer in ?

[john3232]

Originally Posted by autism360

I believe that the lack of homebuilding is due to the fact that homebuilders that got caught up in the overbuilding craze of the mid 2000's either had to go out of business or were financially taught a painful lesson. Now however home builders have less competition and have changed their business models so they are building less homes and they are focused on building homes with higher profit margins. Home builders used to build starter homes but they will not build them when they can build fewer higher end homes with bigger profits and less work. It does not bode well for the first time homebuyer who is stuck fighting with all the big corporations with cash buying every resale home under 250k before it even listed on the mls in many cases.
Eventually builders from other areas will see the opportunity and start building new developments but they will be far away where the land is cheap or perhaps they will partner with the Indian tribes and lease the land in order to build homes closer in ?

I tend to go with that. My guess is builders today are careful not to overbuild preferring to focus on higher profit margins.

The Phx metro was ground zero for the housing crash (or close it.)

It'll likely be a lot more years before local builders forget what happened.

[ps2cho]

OP is a “realtor” and therefore understands complex economic theory.

Realtors are nothing but glorified salesman with a license a 14 year old could get. Your post means nothing.

Plus any idiot could make a 5-year prediction at the top of a record economy and be right. Stupid post.

That said, “New” home buyers should continue renting. Those already in a house who have rose appreciation is less of an issue unless you’re dramatically upsizing.