Wait at least one more year before purchasing house! (Phoenix: sale, rentals)

[azriverfan.]

Originally Posted by Axiom

Does any one else pay attention to PMI's Market Risk Index?

They use economic, housing, and mortgage market factors (home price appreciation, employment, affordability, excess housing supply, interest rates, and foreclosure activity) to determine scores that translate directly into an estimated percentage risk of future home price declines.

They just released First Quarter 2009 data and Phoenix is still on their list of the 10 riskiest MSA's. In their estimation there is a 98.8% chance that prices will be lower 4th quarter 2010 than they were 4th quarter 2008.

Personally I think things are going to get worse before they get better.

I subscribe to "Money" magazine and kept that particular issue; I mentioned this article's finding in a similar thread weeks ago. Nonetheless, that article stated our low wouldn't occur until the third quarter of 2010 at the earliest which is in line to what you said above. Good post!

[azriverfan.]

............

[azriverfan.]

Originally Posted by Howard Roark

This housing bubble crash has been predicted by the bloggers on The Housing Bubble Blog since 2005. Also Charles Hughes Smith, whose socialist politics I passionately disagree with, predicted on his blogs that the real estate bubble will bring down the stock markets around the world.

We HBB bloggers laugh and quote the pundits who say "no one saw this coming!"

We were aware it would be deep. Also Harry Dent predicted a depression in 2009. Is this a depression...or is it still too early to say? Option ARM resets and Alt-A resets are beginning in earnest. I think October will be a big stock market crash because of continued escalation of foreclosures.

Hey Howard

I wish I would have read this post before I posted the one above. You are absolutely right. There were many people like you who saw this coming. I waited and bought my house much later as a result. It wasn't rocket science. It was simple logic: People couldn't afford their homes-->they were going to default on their loans--> several foreclosures were going to be available-->the banks are going to take a hit.

[azriverfan.]

Originally Posted by Captain Bill

So where is the conflict of interest?

• I am not telling people that this is the time to buy.
• I have never said that
• I have repeatedly stated that everyone has to make the decision to buy (or sell) based on their personal needs, and in some cases I have told people they should wait
• Nothing in my post can be construed as a "Realtor sales pitch

The high buying activity today is due to first time homebuyers and investors jumping in the market. And the sales are focused on areas where pricing is the lowest, such as Surprise, Queen Creek, and Maricopa.

Where is the conflict of interest? If the public were to get the impression that the market has bottomed out or that there is "high buying activity today" then they would feel compelled to enter the market and buy homes thinking that prices will rise as opposed to waiting and seeing if prices continue to decrease. As a realtor and an investor, this impacts you directly because this would increase home values and cause more clients to approach realtors. If the public feels the market will not bottom out for another 2 years then that directly impacts you as well. Therefore, there is a clear conflict of interest when a realtor speculates about the housing market or just includes a certain array of facts or data to provide an impression that favors buying now. Furthermore, you have a trend of positively speculating about the market on this forum even when the conventional wisdom at the time feared the worst. Below are two of your quotes in 2007 and 2008.

Originally Posted by Captain Bill

I just want to mention that sales have been up in the Phoenix area since the first of the year, that's 4 months and 3 weeks (not a single month). The sales have increased and the inventory has decreased. But because a large number of the sales are being affected by the Short Sales and REO's, the prices have still declined. I've been mentioning on the forum since the beginning of the year that there may be a trend developing and that we should watch that trend to see if it continues. I was blasted by a few people here for just posting the facts, and some of them chose to make something negative from the positive facts. I posted that from December 2007, through April 30 that the overall inventory of housing (all types including manufactured housing) had declined from a 19.2 supply to a 9 month supply, which to me is significant but some chose to make that negative.

You made these claims in May of 2008 insinuating that our market had bottomed out because sales had increased and inventory had decreased.

https://www.city-data.com/forum/phoen...ousing-10.html

Originally Posted by Captain Bill

If you look at some of the prices that are being asked for homes today and compare them with the prices 7 months ago, you'll see that there has already been a 15 to 25% drop in home prices. How much farther are sellers willing to go? I don't believe they are willing to go much farther

You were quoted as saying the above in late 2007.

https://www.city-data.com/forum/phoenix-area/328924-wow-looks-like-worst-over-housing-post3848230.html#post3848230

[azriverfan.]

Originally Posted by Captain Bill

March 26 2008: My personal feeling is that now is a good time to buy because of the supply of great homes at low prices and low mortgage rates, provided that one is going to be in the home for 5 or 6 years. If one may have to sell in 2 or 3 years, then that could be risky. Everyone must assess their own situation as well as the market in the area they're considering.

I have about 10 relocating buyer clients that have their community picked out here and as soon as their home sells in their state, they will immediately move here and buy. Several others are here renting until their homes sell. So I see sales across the country as having a positive impact on the sales of homes in the Phoenix Metropolitan area.

Captain Bill

How do you respond to these statements you made in March of 2008 regarding your personal feeling about buying back then?

https://www.city-data.com/forum/phoen...ml#post3256219

[olegk]

Originally Posted by azriverfan.

Captain Bill

How do you respond to these statements you made in March of 2008 regarding your personal feeling about buying back then?

https://www.city-data.com/forum/phoen...ml#post3256219

I don’t know how Capitan Bill would respond… "Busted" appropriate word I guess.
If I bought around that time I would be 15%-20% percent under..
How I can blame Capitan Bill if even our President claimed 2 weeks ago that the recession is not as bad I we thought.

[azriverfan.]

Originally Posted by olegk

I don’t know how Capitan Bill would respond… "Busted" appropriate word I guess.
If I bought around that time I would be 15%-20% percent under..
How I can blame Capitan Bill if even our President claimed 2 weeks ago that the recession is not as bad I we thought.

I don't know, ask Captain Bill? He based his previous analyses on similar facts and reasoning. Therefore, I want to know if his reasoning has changed since that time because his last forecast failed to come true. He is assessing the current market so I want to know why I should trust what he says now and how his approach has changed. He has publicly announced he is a realtor and offers advice on the subject. I think he understands that questions like this come with the responsibility of announcing you are an authority on real estate. This is giving him a fair opportunity to address his previous statements. The President is also asked questions to clarify his previous statements

[tolovefromANFIELD]

Originally Posted by azriverfan.

Captain Bill

How do you respond to these statements you made in March of 2008 regarding your personal feeling about buying back then?

https://www.city-data.com/forum/phoen...ml#post3256219

Ahhhhh, what a difference a year makes Good old Captain Bill reasoning.

[TransporterG]

Good discussion.

I could be wrong, but it seems the discussion has a bias of fear of losing value in the short-term--a down payment, perhaps--but it also is evident to me that the structure of the former or current real estate industry will also change as a result of this downturn.

Phoenix did well in recent boom years due at least in part to the fact of weather for 8 months of the year, not from growing numbers of well-paying jobs in high-tech (dwindling for years) or white collar professions--it was from investment momentum itself. Going forward, I don't see that investors are lining up at the wolf's gate to buy distressed properties and flip at the rate seen in recent years here.

Without economic development of sustainable industry and strong white collar jobs, Phoenix, Las Vegas, parts of Florida and California, will remain stagnant reminders of former boomtowns with little rational, sustainable development. Let's face it, strip malls with minimum wage jobs supporting wonderful communities like where I live in the East Valley are not economic development. When we see Boeing HQ, for example, dump Chicago for Tempe, then we see evidence of interesting opportunities here and real estate potential and sustainable growth, that leads to longer-term real estate price increases.

Without those--we are a beautiful part of a lovely desert that has great weather for 8 months of the year. How much is that worth to you or the greater global (not just national) market, when your best job opportunity is to work at Costco checking membership cards at the door for minimum wage?

Note to self: Remind our congressmen and senators that we are more than an investor play in Phoenix. Geez, we WANT to keep the D'backs, Suns, and Cardinals in town. Oh yeah, and the Coyotes. There is much work to do in Phoenix.

[Ponderosa]

Originally Posted by TransporterG

Good discussion.

I could be wrong, but it seems the discussion has a bias of fear of losing value in the short-term--a down payment, perhaps--but it also is evident to me that the structure of the former or current real estate industry will also change as a result of this downturn.

Phoenix did well in recent boom years due at least in part to the fact of weather for 8 months of the year, not from growing numbers of well-paying jobs in high-tech (dwindling for years) or white collar professions--it was from investment momentum itself. Going forward, I don't see that investors are lining up at the wolf's gate to buy distressed properties and flip at the rate seen in recent years here.

Without economic development of sustainable industry and strong white collar jobs, Phoenix, Las Vegas, parts of Florida and California, will remain stagnant reminders of former boomtowns with little rational, sustainable development. Let's face it, strip malls with minimum wage jobs supporting wonderful communities like where I live in the East Valley are not economic development. When we see Boeing HQ, for example, dump Chicago for Tempe, then we see evidence of interesting opportunities here and real estate potential and sustainable growth, that leads to longer-term real estate price increases.

Without those--we are a beautiful part of a lovely desert that has great weather for 8 months of the year. How much is that worth to you or the greater global (not just national) market, when your best job opportunity is to work at Costco checking membership cards at the door for minimum wage?

Note to self: Remind our congressmen and senators that we are more than an investor play in Phoenix. Geez, we WANT to keep the D'backs, Suns, and Cardinals in town. Oh yeah, and the Coyotes. There is much work to do in Phoenix.

Maybe all you have been able to find is minimum wage work, but let me assure you there are many high paying jobs here and many of us earn salaries on par with anywhere in the US. As for the boom in growth in Phoenix ending - LOL!!! As soon as people in California, New York, Chicago, Tinyville, and so on can sell their homes again, the boom will be back. We have been down this road before and heard the same old nonsense about how it's over for Phoenix. The sunshine is still here and the cheap housing is back. And there are something like 50 million boomers getting ready to retire. Really, anyone predicting the demise of the Phoenix area is not playing with a full deck or is letting wishful thinking get in the way of reason.

I do agree that Arizona needs to do more to attract quality businesses, but I would focus more on companies in green tech, health, pharma, and services than behemoths of the bygone industrial age or even finance and tech manufacturing. If we work to improve our labor force as much as we did on the entertainment and amenities in the last two decades, the companies and capital will come.