In 2022, Zillow Predicts That Phoenix housing market will climb ANOTHER 20%?! (Surprise: power lines, live in)

[MN-Born-n-Raised]

Here we go again. Zillow predicts that home values will go UP in 2023. WTF??? https://www.noradarealestate.com/blo...estate-market/

"Phoenix-area home prices are forecasted to rise by 1.7% between Sep 2022 to Sep 2023." I'm not buying it.

And from the Cromford Report:
“Demand keeps getting weaker, but new supply is also getting lower every week… Sellers outnumber buyers, but not by a wide margin in the majority of areas.”

“Normally when prices start to go down, we get a flood of anxious sellers who want to dispose of their properties before prices get lower still. This is what we saw between April and July, but almost all those sellers have now gone. What is now ailing the market is a lack of motivation, both to buy and sell. In this situation prices are likely to drift lower, but not at a fast pace. In fact with the likelihood of even less supply in November and December, we could possibly see some price stabilization. This would leave us at the end of 2022 at roughly the same pricing level as the end of 2021.” - Mike Orr, The Cromford Report

Note: Mike isn't predicting what is going to happen in 2023. Rather, his crystal ball is only staring at the remainder of the year. All of this is strange to me. Including the Dow Jones average currently at 33,000.

[Mike from back east]

Here's a side issue for the Phoenix area; the percentage of properties owned free and clear of a mortgage.

Stats from the ATTOM realty data firm, reported in Bloomberg today, that Maricopa County, AZ has 1,345,102 properties with 324,102 of them, or 24.1%, being clear of a mortgage. We're 8th on the list percentage-wise. Stands to reason since this area is home to many retirees who've had the time to pay off mortgages.

[MN-Born-n-Raised]

Originally Posted by Mike from back east

Here's a side issue for the Phoenix area; the percentage of properties owned free and clear of a mortgage.

Stats from the ATTOM realty data firm, reported in Bloomberg today, that Maricopa County, AZ has 1,345,102 properties with 324,102 of them, or 24.1%, being clear of a mortgage. We're 8th on the list percentage-wise. Stands to reason since this area is home to many retirees who've had the time to pay off mortgages.

Thanks for Sharing Mike. That is an interesting statistic. I'm actually shocked at how many people own free-and-clear.

As a side note, in October 2022, PHX single-family total home sales (not value but sale figures) are down 45% from a year ago. I would think it would have been MUCH worse. I assume those cash sales are probably a big part of the buyers.

More shocking is Manhatten at 60% mortgage free. FL is about the same percentage. Wow!

[WanderingRebel]

Originally Posted by Mike from back east

Here's a side issue for the Phoenix area; the percentage of properties owned free and clear of a mortgage.

Stats from the ATTOM realty data firm, reported in Bloomberg today, that Maricopa County, AZ has 1,345,102 properties with 324,102 of them, or 24.1%, being clear of a mortgage. We're 8th on the list percentage-wise. Stands to reason since this area is home to many retirees who've had the time to pay off mortgages.

Couldn't that also include all the institutional investors who bought homes and rented them out? That would make the most sense.

[MN-Born-n-Raised]

Originally Posted by WanderingRebel

Couldn't that also include all the institutional investors who bought homes and rented them out? That would make the most sense.

It would all home owners including iBuyers. It's estimated that in Maricopa county, a total of 2500 homes are currently owned by institutional investors totaling around $1 billion. With 1,345,102 total homes, 2500 will skew the percentage but far less than you would have thought.

On that note, iBuyers on average went after those smaller homes to rent out. It's not too shocking that the smaller homes inventory is rising fast as they want to exit the market. I read that they are reducing the price by 2% every 2 weeks. A local economist and RE agent John Wake shows it on a graph here: https://twitter.com/JohnWake/status/...7Ctwgr%5Etweet Notice inventory on larger homes are still tight. But the smaller homes have much more supply than demand.

[kell490]

Stocks surge after core inflation reading comes in cooler than expected

I just got into some stocks I wanted to buy like google, and amazon today market is now 1/2 way recovered from the bottom of 2022. Fed says they will slow rate increase likely the last meeting of the year they will leave rates alone. This could refuel the housing market. Inventory dropped as people took their homes off the market not wanting to drop the price with the short term rental market buyers maybe prices will hold in Arizona.

I was bearish on the housing market if the fed does not continue to push upward in rates not sure we will see any crash. Fed is worried about causing a recession they are trying to walk on a tightrope. Now that we are past the elections that cooled down some of the fear in the stock markets.

[Potential_Landlord]

Originally Posted by kell490

Stocks surge after core inflation reading comes in cooler than expected

I just got into some stocks I wanted to buy like google, and amazon today market is now 1/2 way recovered from the bottom of 2022. Fed says they will slow rate increase likely the last meeting of the year they will leave rates alone. This could refuel the housing market. Inventory dropped as people took their homes off the market not wanting to drop the price with the short term rental market buyers maybe prices will hold in Arizona.

I was bearish on the housing market if the fed does not continue to push upward in rates not sure we will see any crash. Fed is worried about causing a recession they are trying to walk on a tightrope. Now that we are past the elections that cooled down some of the fear in the stock markets.

I also think I was too bearish housing earlier this year. What we're seeing IMO is a post-pandemic cool-down after a relentless 2-3 year boom and not the downside after a 18-22 credit cycle. The latter should hit towards the end of the decade. Even then the downside will be much more limited than 2005-10. Credit cycles alternate- one has a hefty downside, the next does not. So even later this decade the fallout should be more like the 1989-92 credit cycle decline. Which was mild in Phoenix - I think we saw nominal price decline of ~5% (of course more inflation-adjusted).

[WanderingRebel]

Originally Posted by MN-Born-n-Raised

It would all home owners including iBuyers. It's estimated that in Maricopa county, a total of 2500 homes are currently owned by institutional investors totaling around $1 billion. With 1,345,102 total homes, 2500 will skew the percentage but far less than you would have thought.

On that note, iBuyers on average went after those smaller homes to rent out. It's not too shocking that the smaller homes inventory is rising fast as they want to exit the market. I read that they are reducing the price by 2% every 2 weeks. A local economist and RE agent John Wake shows it on a graph here: https://twitter.com/JohnWake/status/...7Ctwgr%5Etweet Notice inventory on larger homes are still tight. But the smaller homes have much more supply than demand.

I meant more companies like Blackrock (who purchase and turn them into rentals), not really iBuyers like Opendoor, Offerpad, etc.

[Mike from back east]

Yesterday, the Federal Reserve Bank of Dallas said housing prices could DECLINE 20% due to the run-up in mortgage rates. If so, that could wipe out a lot of housing inflation seen earlier this year. Story was in Bloomberg, a paywall site.

Here's what Zillow has told me each month of 2022 what they think my home is worth.

Jan 708k (Low point)
Feb 720k
Mar 738k
Apr 769k
May 786k
Jun 795k (High point, a gain of 87k, an increase of 12.28%, i.e., 87 divided by 708)
Jul 792k
Aug 776k
Sep 751K
Oct 741k
Nov 738 (Lowest since June, a decline of 57k, a decrease of 7.17%, i.e., 57 divided by 795)


Sooooo . . . I didn't see the rise of 20% Zillow predicted, but it was only a prediction anyway, most of my gain this year has been given back, these Zillow numbers are just their best opinion, and price activity will vary between areas within the large Phoenix Metro Area. Your Mileage May Vary (YMMV). It's all good. You look marvelous! Have a nice day.

I'll update again when the December number comes in.

[jdahunt]

Originally Posted by Mike from back east

Yesterday, the Federal Reserve Bank of Dallas said housing prices could DECLINE 20% due to the run-up in mortgage rates. If so, that could wipe out a lot of housing inflation seen earlier this year. Story was in Bloomberg, a paywall site.

Here's what Zillow has told me each month of 2022 what they think my home is worth.

First off, don't ever use Zillow for the valuation of your property....they have no clue.

Just take your square footage and multiply it by the square foot average of sold homes near you the past month or so and you will be close.

Zillow does have access to the county records on sales.....use that data and you will be fine.