In 2022, Zillow Predicts That Phoenix housing market will climb ANOTHER 20%?! (Mesa: sale, leases)

[MN-Born-n-Raised]

Originally Posted by waltcolorado

Interesting watching the Arizona forum now compared to around 2010, 2011. Back then, there would be threads where everyone was saying dont buy (turned out to be the best time to buy). Compare that to the threads now when prices are high. Too bad we couldn't visit one of those threads on the Phoenix forum from say 2011.

You can revisit those threads. Here you go https://www.city-data.com/forum/phoen...oenix-not.html


https://www.city-data.com/forum/phoen...take-real.html

https://www.city-data.com/forum/phoen...er-2010-a.html


I can get you 20 more if you like. Pick and chose here https://www.city-data.com/forum/searc...3&pp=30&page=4

I was busy pontificating what I thought in those threads. To me in 2010-2011, it was clear and obvious what was going on. And as luck would have it, I missed the "bottom" by 8 months. I bought early at around $50 a square foot for one of the nicest neighborhoods in Surprise (I wish I would have bought more; could-have-should-have-would-have).

If you want an accurate assessment in 2022, read Mr. Wake's accurate multipoint article in Forbes (he lives in Scottsdale https://www.forbes.com/sites/johnwak...h=506fe6d96182

[MN-Born-n-Raised]

Originally Posted by asufan

HAHAHA. nice subtle dig calling me an idiot for having rentals. At the $370,000+ average increase I've seen per property over the past 2 years, I sure as ***** don't feel like an idiot.

I've had most of these properties for more than 10 years. I've been paying the mortgage, maintenance and upgrades on some of these properties for 11-12 years, these are my properties that no one else wanted to move on years ago. Now I reap the benefits.

You "idiot"! You are only up to around $3M in net worth on your rental RE alone. Next, your gains are capped at a 20% appreciation. Now, you COULD have placed your money in a no-load index fund back in 2011. The market was at 10,810 points and now it is over triple that amount. BUT, you have (overly generous) write-offs plus (I assume) your places have cash flowed for a long time which has been an annuity for many years. Never forget you used someone else's money (the bank) to leverage that $3M in profit all the while you have been paying down your loans using CHEAP money to boot!

You played it p-e-r-f-e-c-t-l-y. Well done! Yea, you are an F'n financial idiot.

[MN-Born-n-Raised]

Originally Posted by Ponderosa

The Dallas Federal Reserve has said home prices are becoming unhinged from fundamentals warning of a new bubble brewing in the housing markets. With Phoenix prices surging more than most in a market that frankly is not all that desirable in the first place, this could be especially prescient of a burst to that bubble.

https://www.bloomberg.com/news/artic...ing-in-the-u-s

Common sense tells us that this run-up isn't healthy. Whenever there is a housing correction (and there will be one), the magnitude of the drop will depend on what happens with the disproportionate housing stock that is currently owned by institutional investors. Once investors stop buying, they will pull the rug from a lot of the appreciation. Because now, there are no "deals". But deals, albeit expensive, will be had once investors stop paying cash.

I think the wild card is what happens with the overall inflation trend. Currently, we have a labor shortage and people are getting downright greedy with their margins. Plus, supply chain issues refuse to go away which also causes rising pricing pressures. So while there is a "bubble", it may not pop so loud if inflation pushes up everything to the point of making these prices the new norm. So no, "what goes up (doesn't necessarily mean" must come down." My 1st brand new 1985 Mustang GT was $11K. Now they are around $40K. You see, it doesn't "need to come down". Every time I turn around, there is another sign of inflation. Heck, there are new chip shortage problems related to Ukraine https://www.wired.com/story/ukraine-chip-shortage-neon/ . Or the 22,000 overpaid union dock workers who might go on strike https://www.bostonglobe.com/2022/03/...y-soon-strike/ I can go on for an hour...

My point is that inflation in other sectors may keep the "bubble" from deflating fast (a.k.a. not popping). In order for a burst to happen, a recession needs to occur. With COVID, our fearless leaders around the world made sure a recession didn't happen, and therefore, this caused a global housing bump in prices https://blogs.imf.org/2021/10/18/hou...und-the-world/


Here in the USA, the FED's (who you referenced in the Bloomberg article) kept on buying mortgage-backed securities keeping money super cheap. For the life of me, I didn't understand why they wanted inflation to happen. They would have to be the biggest dopes not to understand what they caused (a sense of urgency for people to buy "payments". IMO, if there is a pop, a lot of the blood is on the Fed's hands. They were GD financial dimwits OR they purposely wanted inflation to happen (in order to make the massive spending seem less of a burden).

In short, it could end badly. But nothing says this isn't the new norm. Just pay attention to the overall inflation level and you will have your answer as to how big the correction will be. And if we had a deep recession (because of Russia war?), that's when it gets interesting. Until then, expect the PHX housing prices to go UP some more.

[john3232]

Originally Posted by MN-Born-n-Raised

You "idiot"! You are only up to around $3M in net worth on your rental RE alone. Next, your gains are capped at a 20% appreciation. Now, you COULD have placed your money in a no-load index fund back in 2011. The market was at 10,810 points and now it is over triple that amount. BUT, you have (overly generous) write-offs plus (I assume) your places have cash flowed for a long time which has been an annuity for many years. Never forget you used someone else's money (the bank) to leverage that $3M in profit all the while you have been paying down your loans using CHEAP money to boot!

You played it p-e-r-f-e-c-t-l-y. Well done! Yea, you are an F'n financial idiot.

Well done indeed.

[ElleTea]

Originally Posted by asufan

I get text messages every single day asking if I want to unload any rentals. Just delete and block number is all I can do

I get texts all the time asking if I want to sell my house. Yeah right. In this market, no way would I sell to some random investor who would try to low ball me.

[asufan]

Originally Posted by MN-Born-n-Raised

You can revisit those threads. Here you go http:////www.city-data.com/forum/pho...oenix-not.html


http:////www.city-data.com/forum/pho...take-real.html

http:////www.city-data.com/forum/pho...er-2010-a.html


I can get you 20 more if you like. Pick and chose here http:////www.city-data.com/forum/sea...3&pp=30&page=4

I was busy pontificating what I thought in those threads. To me in 2010-2011, it was clear and obvious what was going on. And as luck would have it, I missed the "bottom" by 8 months. I bought early at around $50 a square foot for one of the nicest neighborhoods in Surprise (I wish I would have bought more; could-have-should-have-would-have).

If you want an accurate assessment in 2022, read Mr. Wake's accurate multipoint article in Forbes (he lives in Scottsdale https://www.forbes.com/sites/johnwak...h=506fe6d96182

Yeah I remember being told by someone probably 7-9 years ago right here on city data that I was "going to go bankrupt" because I had rentals and the prices were inflated (I think I only had 4-5 at the time). He gleefully predicted a crash and hoped for my failure. He was upset you couldn't find a single family house in South Scottsdale for under $250K, now those houses are $750K plus.

As I've stated before a couple times the past few months, the market does seem a little bit inflated today and I would not be shocked if there's a pull back. I'm not one of those that think the market will only go up, I am a realist. I just find it funny that suddenly because the market is up and everyone wants a house, I shouldn't be allowed to have rentals, especially when looking back to how the market was when there were more sellers than buyers.

[asufan]

Originally Posted by ElleTea

I get texts all the time asking if I want to sell my house. Yeah right. In this market, no way would I sell to some random investor who would try to low ball me.

There's been a sudden interest in property wholesaling with people selling courses and "coaching" services to the younger generation and they think this is the path to making $50,000 a month flipping paper. The problem is, most savvy wholesalers use software to only target distressed owners of properties that may need repairs and wouldn't qualify for FHA or conventional financing. That's hard to find these days, but the distressed seller market would increase exponentially if the market declines (it will at some point). As it is now, they're just contacting everyone that owns a property hoping one will bite.

[MN-Born-n-Raised]

Originally Posted by asufan

I just find it funny that suddenly because the market is up and everyone wants a house, I shouldn't be allowed to have rentals, especially when looking back to how the market was when there were more sellers than buyers.

Back in 2008-2010, investors and 2nd home buyers helped stop the hemorrhaging and massive blight. When they bought, they hired contractors, bought appliances, freshened up landscaping, upgrading, like mad etc. I spend $70K on upgrades and enhancements (which would cost at least double now). I had neighbors telling me how nice everything looked. All good! I'm sure you have those stories as well.

I certainly don't fault someone under 10 homes for buying and renting out their homes. I'm not telling you anything, but it's a small PITA to rent out a place and it is real work! It's the farthest thing from "free money". There is an opportunity cost to renting out a place too.

My personal concern is institutional investors. As in, one day, they can flip a switch and decide to dump thousands of homes. In my world, that's troubling for all of us. As a 2 homeowner, I do like the appreciation. But I'd still love some common sense controls put in place. The "free market" can fall off the rails from time to time. There are serious risks to what is currently going on.

[john3232]

Originally Posted by MN-Born-n-Raised

Back in 2008-2010, investors and 2nd home buyers helped stop the hemorrhaging and massive blight. When they bought, they hired contractors, bought appliances, freshened up landscaping, upgrading, like mad etc. I spend $70K on upgrades and enhancements (which would cost at least double now). I had neighbors telling me how nice everything looked. All good! I'm sure you have those stories as well.

I certainly don't fault someone under 10 homes for buying and renting out their homes. I'm not telling you anything, but it's a small PITA to rent out a place and it is real work! It's the farthest thing from "free money". There is an opportunity cost to renting out a place too.

My personal concern is institutional investors. As in, one day, they can flip a switch and decide to dump thousands of homes. In my world, that's troubling for all of us. As a 2 homeowner, I do like the appreciation. But I'd still love some common sense controls put in place. The "free market" can fall off the rails from time to time. There are serious risks to what is currently going on.

I remember this guy...
https://www.latimes.com/archives/la-...mento%20County.

[asufan]

Originally Posted by MN-Born-n-Raised

Back in 2008-2010, investors and 2nd home buyers helped stop the hemorrhaging and massive blight. When they bought, they hired contractors, bought appliances, freshened up landscaping, upgrading, like mad etc. I spend $70K on upgrades and enhancements (which would cost at least double now). I had neighbors telling me how nice everything looked. All good! I'm sure you have those stories as well.

I certainly don't fault someone under 10 homes for buying and renting out their homes. I'm not telling you anything, but it's a small PITA to rent out a place and it is real work! It's the farthest thing from "free money". There is an opportunity cost to renting out a place too.

My personal concern is institutional investors. As in, one day, they can flip a switch and decide to dump thousands of homes. In my world, that's troubling for all of us. As a 2 homeowner, I do like the appreciation. But I'd still love some common sense controls put in place. The "free market" can fall off the rails from time to time. There are serious risks to what is currently going on.

And eventually it will soften here. There will be a point where demand isn't at the same level and there will be too much supply and you'll start seeing vacancy periods between tenants start to increase, which lowers market rents and so on. The institutional investors definitely add artificial factors to the market and a mass exodus, if it happens, will create a buyers market again.