In 2022, Zillow Predicts That Phoenix housing market will climb ANOTHER 20%?! (Scottsdale: lender, median income)

[hikernut]

It's more expensive to build a single-story of the same size (square feet of livable floor space). There's more concrete in the slab, more roof trusses, more roof tiles, etc. In theory, the best shape for minimizing material use is a cube. I'm not sure how the labor cost changes between single-story and two-story, if there is any(?).

[MN-Born-n-Raised]

Originally Posted by DetroitN8V

Single story is more desirable for a number of reasons. The main one is heat rises. I find that single story homes feel more spacious too. Backyard space being eaten up is certainly noticeable on a tiny tract house lot but there are many that adequately accommodate a single story home with plenty of yard space.

The biggest reason to avoid a two story home for me is other two story homes. Unless you're unique it usually means other homes in the area are also two stories. Having neighbors' windows peering into my yard isn't for me.

Yep, and yep ^^. Add in steps/stairs and proximity to parents' kids as another 2 downsides. Big picture, single stories are more desirable and they always command more $$.

[WanderingRebel]

Ok that all makes sense. Can we at least agree that 2-story homes have better curb appeal?

[OUgrad09]

If we do a 2-story house, the master has to be on the second level (close to the kids). We don't consider 2-story homes with 1st floor masters.

[MN-Born-n-Raised]

Originally Posted by WanderingRebel

Ok that all makes sense. Can we at least agree that 2-story homes have better curb appeal?

Taller, single-level ceiling homes have great street appeal. 8' ceilings... Not so much. So pound for pound, I like the looks of a well-done, single-level home. YMMV.

[Tarara Boomdea]

MOD EDIT: I've copied this from another forum. It shows a percentage drop in the number of homes bought by investors, not a drop in the price of homes. But....if sales decline this much then we can expect price reductions to move stalled listings.

[Ponderosa]

Originally Posted by MN-Born-n-Raised

Taller, single-level ceiling homes have great street appeal. 8' ceilings... Not so much. So pound for pound, I like the looks of a well-done, single-level home. YMMV.

Back in the day you never saw two story homes in Phoenix. They started building them when the lots got so small that they couldn't manage a footprint larger than 1500 sf.

[MN-Born-n-Raised]

Originally Posted by lvnyc

MOD EDIT: I've copied this from another forum. It shows a percentage drop in the number of homes bought by investors, not a drop in the price of homes. But....if sales decline this much then we can expect price reductions to move stalled listings.

As a side note, IMO, the author of that link (Nick Gerli) has something to sell. And those are clicks. On his LinkedIn page, he has this "incredible" economic pedigree from Siena College with a "3.88 GPA". Not exactly Wharton.

He says here https://www.linkedin.com/in/nicholas-gerli-04b1114b that he is "generating 4 million views on youtube". But IMO, he does so by spreading a biased gloom-and-doom view. He is calling for a 40% real estate crash and it is going to be "much worse than 2008". Since PHX is the highest bubble, according to him, it's going to drop even more than 40% in the PHX metro. He is out on an island versus real economists because his bias and brand are to sell a CRASH of all RE crashes in all of mankind.

On that same link, he brags that he makes $60K a month on youtube.com. Basically, I think the Siena College graduate is putting out as much fear as possible to line his pockets.

If you want to see what is going on with PHX real estate, get it here https://cromfordreport.com . Mike and Tina from the Cromford Report are balanced. And the reality is the investors were buying small homes. Those smaller homes that iBuyers bought are falling much faster than more desirable properties.

Personally, I am shocked at how well the market has held up. And the Dow Jones is at 34,194.06 as we speak which is almost back to where it was. Some people are still calling for an economic armageddon. I'm not saying that we cannot go down a lot in PHX real estate or for that matter, the stock market. But when you hear someone who is absolutely confident while being in the severe minority, take it for what it is worth: they are selling doom-and-gloom for their personal gains!

[Mike from back east]

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.

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 from high, a decrease of 7.17%, i.e., 57 divided by 795)
Dec 707K (Lowest since Jan, a decline of 88k from high, a decrease of 11.1%, i.e., 88 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.

Okay, the December email is in from Zillow and it's no surprise that their opinion of my home's value dropped again. I've put the December number up inside the quoted material. So, overall the price of my home is back where it started in January, essentially zero increase. I expect further declines in 2023 as higher interest rates reduce the number of buyers in the market. Not sure if the billionaire Wall Street firms will keep scarfing up homes to put in the rental markets as I'm seeing reports in various publications that rental prices are softening in some markets.

I know Zillow isn't all that reliable, but I consider it close enough since they do track prices of homes sold.

Maybe we should close this thread after New Year's and start a new thread for what's foreseen in 2023?

[Potential_Landlord]

MODERATOR NOTE: This annual thread is closed for the year 2022, a new thread for 2023 is found here.

Originally Posted by MN-Born-n-Raised

As a side note, IMO, the author of that link (Nick Gerli) has something to sell. And those are clicks. On his LinkedIn page, he has this "incredible" economic pedigree from Siena College with a "3.88 GPA". Not exactly Wharton.

...

Personally, I am shocked at how well the market has held up. And the Dow Jones is at 34,194.06 as we speak which is almost back to where it was. Some people are still calling for an economic armageddon. I'm not saying that we cannot go down a lot in PHX real estate or for that matter, the stock market. But when you hear someone who is absolutely confident while being in the severe minority, take it for what it is worth: they are selling doom-and-gloom for their personal gains!

Same here. I was way too bearish earlier this year. But with inflation starting to come down and real wages (sticky!) going up it's impossible to get a recession in the foreseeable future. GDPNow is currently tracking at 3.7% for Q4/22. No recession = no housing crash. We may plateau to digest the extraordinary gains of the last few years but not more. If inflation falls all throughout 2023 (which is my expectation) then interest rates will come down too. Which will stabilize the RE market. When we compare the current long business cycle or consumer confidence cycle (2011 to date) with the last one (1991-2010) it seems clear to me this one is milder. The current half cycle low does not trigger an outright recession (last one did in 2002) nor will the cycle low expected in late 2020s trigger more than a garden-variety recession and nothing like the GFC 2008. IMO.