Has the bottom hit? (Phoenix: renter, broker, purchase)

[markas214]

Originally Posted by nwlv

I often wonder about this. The media are always talking about resets in one form or another, which is usually very negative. They fail to mention that some of the highest rates would be 6 mo. LIBOR + 6.
The interest rates are still reasonably low for even those with poor credit. I looked at about 50 notes in Phoenix a few months ago. All were foreclosures, 3/4 were ARMs, 90% of those were tied to LIBOR, with a very high percentage of those tied to 6 mo. LIBOR, which is currently a whopping 1.74%. So what's the deal?

Interest only option ARMs. Loans resetting at 125% of the original principal.In the beginning they had a lower principal and were only paying the interest. Now they have a bigger loan and have to pay more interest on that and additional money towards the principal. All this on a house worth 40-60% less than they paid for it. That's the deal.

[nwlv]

I know there were lots of those in California, I didn't see many in Phoenix, but there were a few. The balloon rider was much more common. I think many more people will just walk because they are so far underwater. THey could buy the house across the street at 40 cents on the Dollar. IMO, it's more that, than the high interest rates. Even at zero percent; it's not a good deal. I ended up with a condo in Summerlin for 26.5 cents on the Dollar; but I became very familiar with the dynamics (or lack thereof) of the Phoenix Market.

[roosevelt]

One thing I have learned in real estates and antiques, there is no bottom; just when it seems it cannot go any lower it goes lower. For the first time in history we have a president that is scaring an awful lot of people to death with his constant attacks on the so called rich and corporations. Taxes and regulations are forcing small business with employees to shut down. People are going into foreclosure because they are working their rear ends off to pay for a house that is worth half what they owe and the property taxes are horrendous yet schools clamor for even more money. I could go on all day about this. One thing for sure, we need another newspaper in this city.

[ArizonaBear]

Originally Posted by roosevelt

One thing I have learned in real estates and antiques, there is no bottom; just when it seems it cannot go any lower it goes lower. For the first time in history we have a president that is scaring an awful lot of people to death with his constant attacks on the so called rich and corporations. Taxes and regulations are forcing small business with employees to shut down. People are going into foreclosure because they are working their rear ends off to pay for a house that is worth half what they owe and the property taxes are horrendous yet schools clamor for even more money. I could go on all day about this. One thing for sure, we need another newspaper in this city.

In all fairness: several people (including myself) sense the housing market has for the most part has indeed bottomed------------with N Scottsdale, PV, etc. fixin' to crash now.

[Ponderosa]

Originally Posted by ArizonaBear

In all fairness: several people (including myself) sense the housing market has for the most part has indeed bottomed------------with N Scottsdale, PV, etc. fixin' to crash now.

I think "adjust" is a better term than crash, and I would add to that places that have not "adjusted" outside the Sun Belt crash zone where the typical home is still out of whack with the typical buyer's income for that neighborhood. Unfortunately, however, it's not going to be enough and we are going to get back to the situation that we had prior to '05 where the only place we here in Phoenix can move to without paying more for a house is Texas or the worst of the rust belt. I suppose that is good for our growth here and thus our overall local economy, but it is a depressing situation for those who want to leave. For a brief time in 05-06 the world (outside CA and NY at least) was attainable. No longer.

[Beena]

Yes there are further adjustments to go here in Scottsdale and prices will continue to drop. I have been listening to realtors call "we are at the bottom" for 3 years now.

Next time one says that, show them your bottom so they can recognize one in the future.

[Captain Bill]

Originally Posted by Beena

Yes there are further adjustments to go here in Scottsdale and prices will continue to drop. I have been listening to realtors call "we are at the bottom" for 3 years now.

Next time one says that, show them your bottom so they can recognize one in the future.

But if they say it often enough, one time they'll be right, then they can say "I called the bottom." Right?

[Beena]

Originally Posted by Captain Bill

But if they say it often enough, one time they'll be right, then they can say "I called the bottom." Right?

That was funny Had to rep you.

[Captain Bill]

Originally Posted by Beena

That was funny Had to rep you.

I'm flattered; a Realtor being repped by Beena.

Thanks

[azriverfan.]

Originally Posted by Beena

Yes there are further adjustments to go here in Scottsdale and prices will continue to drop. I have been listening to realtors call "we are at the bottom" for 3 years now.

And why wouldn't they say that? It is their profession to sell homes. Why would a realtor ever say: "No don't buy a home from me. I will wait for your business in 2 years when the market is likely to bottom" A realtor making speculations about the housing market is like a Tobacco company making conclusions on smoking incidence and lung cancer.