Caution! Home buyers! Possible price correction coming to Phoenix! (Jerome: insurance, homes)

[49erfan916]

I close on the 2nd. Should i back out of the deal or nah? Lol

[asufan]

Originally Posted by Ponderosa

Big crash coming in home prices. High growth areas like Phoenix will be hit harder once again. It will be worse than the recession but may be shorter and maybe there will simply be few to no buyers for the next 6 months.

I disagree, it will be nothing like 2008. 2008 had many out of town overextended speculators that had no option but to bail on the properties. There were people in Las Vegas, LA with $90,000 jobs buying a dozen houses here with no money down with the intention of flipping them. The loans were often subprime, NINJA loans, stated income, etc, lots of mortgage fraud and people in over their heads, lots of adjustable rate mortgages with payments suddenly inflating. The best option was for them to bail on properties.

Today, while the prices have shot up similarly, the loans are better. People have lower fixed rates, they qualified with appropriate credit and paid more down. Owners have more skin in the game. Most of the investors are institutional investors or local investors, not a lot of mass out of state speculation with zero down like the 2008 crash.

Now I agree, real estate prices are likely to eventually pull back, however not to the extent of 2008. I can see a 15-25% drop more likely than a 57% drop. People are in good loans and will want to hang on to their properties. This would be a drop based on temporary forced business closures and layoffs in an otherwise good economy versus bad loans, rampant fraud and bad economic conditions.

[Sno0909]

Originally Posted by MN-Born-n-Raised

Add to it, this problem is not only the USA, rather a WORLD economy issue. If this continues for the 6 months, I suppose we can expect a crash in real estate too. Not now... But if it continues in the long run, of course, it's going to have an impact.

Now for some great news. This is the best crystal ball that we have..... China (assuming they are not lying) has NO NEW INFECTIONS. Meaning, their quarantine is working. South Korea and Taiwan infection rate is also is flattening https://www.nytimes.com/interactive/...countries.html . But they have had their stuff together for a long time. Also, notice how many people wear surgical masks? Hint: we have been lied to that they don't help. The Surgeon General mislead us. After all, the CDC is telling ER docs to use make-shift masks. Gee, I wonder why? Here is some hard data where they are comparing DIY to masks in lieu of the shortages. All of a sudden the surgical masks work? Oh... Wait. It's because people don't know how to wear them. I call B.S. Read https://smartairfilters.com/en/blog/...ce-mask-virus/ to see how well the surgical masks work as compared to DIY. I digress.

I honestly have a hard time believing anything the Chinese are saying. Even if (and that's a big IF) they are being honest about the containment, I truly believe they have been dishonest about the number of infected and dead. Only 81,250 infected and and 3,133 deaths? Italy has already put that death number to shame.

Also, how are they only at 81,250 when they are expecting millions in the US (hell, millions in California alone)? Granted, we don't allow the Gestapo-type tactics they used, but I still find it to be a very under-reported number.

[stub303]

I honestly would not expect prices to fall far in Phoenix. I split my time between LA and Phoenix and the demand in Phoenix is still mind blowing. I own multiple rentals in the East Valley and last week had over 19 rental applications for a 3 bedroom in Gilbert. Every single application was from couples or families retiring from the Midwest or fleeing California in hopes of cheaper living in AZ.

For CA residents moving to AZ, a 300K house is peanuts as is a $1,700 rent for a 3 bedroom home. Until that demand disappears, I would not expect too much of a dip. LA however, could easily see a 30%+ correction.

[barca12]

Originally Posted by asufan

I disagree, it will be nothing like 2008. 2008 had many out of town overextended speculators that had no option but to bail on the properties. There were people in Las Vegas, LA with $90,000 jobs buying a dozen houses here with no money down with the intention of flipping them. The loans were often subprime, NINJA loans, stated income, etc, lots of mortgage fraud and people in over their heads, lots of adjustable rate mortgages with payments suddenly inflating. The best option was for them to bail on properties.

Today, while the prices have shot up similarly, the loans are better. People have lower fixed rates, they qualified with appropriate credit and paid more down. Owners have more skin in the game. Most of the investors are institutional investors or local investors, not a lot of mass out of state speculation with zero down like the 2008 crash.

Now I agree, real estate prices are likely to eventually pull back, however not to the extent of 2008. I can see a 15-25% drop more likely than a 57% drop. People are in good loans and will want to hang on to their properties. This would be a drop based on temporary forced business closures and layoffs in an otherwise good economy versus bad loans, rampant fraud and bad economic conditions.

Yes, thank you for pointing this out. A lot of people assume this will be repeat of 2008. A key difference is the government is intervening and trying mitigate further damage to the economy. That did not happen in 2008. The interest rates were already lower than in 2008 but the Federal Reserve stepped in and reduced it even further. They have also deferred tax filings and payments by 90 days. And they are about to introduce a 1 trillion dollar aid package which cash payments being given directly to families. All of those factors will keep property taxes competitive. And it's not just the government. Banks are also delaying mortgage payments with no penalty. Credit companies are similarly offer one month no payment without penalty or interest. Companies are lowering fees and leases on franchisees.

[Hal Roach]

I heard a bank stating no principle required, which is mostly in their favor with low interest rates. Many will be in for a rude awakening if they think they don't have to pay due to job losses. Those provisions are not in deeds of trusts or leases.. I will wait to see forced sellers dropping prices before I make any plans to buy my sixth home in Arizona.

[Rvguru6338]

Originally Posted by Sno0909

I honestly have a hard time believing anything the Chinese are saying. Even if (and that's a big IF) they are being honest about the containment, I truly believe they have been dishonest about the number of infected and dead. Only 81,250 infected and and 3,133 deaths? Italy has already put that death number to shame.

Also, how are they only at 81,250 when they are expecting millions in the US (hell, millions in California alone)? Granted, we don't allow the Gestapo-type tactics they used, but I still find it to be a very under-reported number.

I agree with you, I don’t believe anything the Chinese say. The Chinese, would hide the death of 1 billion people just to save face. That said, let’s assume it’s true. Then the Chinese have affectively whipped are you know what’s in this war. And that’s what this is, it is a war. They now have a blueprint on how to stop any virus outbreak that hits their country. And us? Experts are estimating that 56% of us are going to catch this. Why? If Marshall law and locking everybody down for 30 days works, why aren’t we doing it? Why are we going to let our country go through something that’s probably going to be worse than a nuclear war? Makes no sense to me. None of this makes any sense to me. Our efforts to control this are halfway down the middle of our two options to control it. Let it run free and do it staying and everyone develop immunity to it, or just force everybody and isolation for a month till it’s gone. We’re doing a little bit of both. And it’s not working

[MN-Born-n-Raised]

Originally Posted by Sno0909

I honestly have a hard time believing anything the Chinese are saying. Even if (and that's a big IF) they are being honest about the containment, I truly believe they have been dishonest about the number of infected and dead. Only 81,250 infected and and 3,133 deaths? Italy has already put that death number to shame.

Also, how are they only at 81,250 when they are expecting millions in the US (hell, millions in California alone)? Granted, we don't allow the Gestapo-type tactics they used, but I still find it to be a very under-reported number.

We agree, the Chinese lied about their numbers. But Taiwan and Soth Korea are waaaaaaaaay ahead of this than the USA and they took more of the Chinese lock-down approach. Before I forget, this Republican here (me) has a hard time believing Donald Trump. This statement isn't coming from "politics", rather Trump is a lying baffoon (even though I agree with several of his policies while despising others). Sorry, I digress...

Back to their policies. Our son did an ER rotation in Taiwan (he will be starting his ER residency in a few months in CA on the front lines. In Tiawan and Hong Kong, 100% of the people walking the streets were wearing surgical masks (97% filters). When he was on the Taiwan owned airlines, the attendants wore gloves and masks. When he came to LA and sat in 1st class, the attendants were handling people's food with their hands so he passed. So as you see, culturally speaking, we are going down the Italy path. We won't be as bad as Italy because our population is younger and we are not as close in proximity. But expect it to be a sh*t-show in the pending weeks for San Fran and NYC. And in Italy, STILL their "lockdown" really means 40% of the population is as mobile as before. In South Korea as well as in China, for instance, they have multiple apps. Apps that verify where people are. Apps that show where more supplies are located when there is a shortage. And Apps that show where outbreaks are occurring. As you see, the USA is doing a dismal job in comparison. Let's face it., we are rather selfish in comparison. We can all set-down our flags and call a spade a spade. In hindsight, there will be a lot of legitimate blame to go around in the hard-hit areas.

In a personal example, our dentist Army doctor is being forced to treat routine patience in Washington state. The ADA basically said, "don't fix people's teeth unless it is an emergency". They understand why. But some General said "it's all overblown". Meanwhile, she is filling and drilling creating aerosols (submicron particles) from the spit. Read all about it here https://www.dentistryiq.com/dental-h...51012/aerosols. It's known that the spit aerosols hang in the air for 30 minutes. But the non-technical army general knows better! She questioned her authority and it went up the chain and they said "fill and drill". Therefore, the 65+ year old people are playing a game of roulette and statistically speaking, that dental clinic is spreading the virus.

[kell490]

Many will not have a job to go back to how will that effect the housing market? I think it will be a significant blow that's only if we see one wave of the virus. We don't even know if a vaccine will be effective, or will it be like the flu every year new strain.

The Economy is not going to just snap back like a spring. I think many are going to be very cautious about buying after this.

[Hal Roach]

Notice how Taiwan linked its immigration database, with its national health insurance database to identify and track cases. Not going to happen in the States, with a pourous border and a bunch of lefties advocating open borders.