Wait at least one more year before purchasing house! (Phoenix: appointed, foreclosed)

[Captain Bill]

=Howard Roark;8191359HBB getting more publicity. Here are parts 1 and 2 of reels from a documentary that is being worked on. Scenes in Las Vegas at a HBB meetup to examine the Vegas bubble. Some of the HBB blogger regulars are being interviewed. Very impressive.

Got that, Captain Bill?


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...

Thanks for posting the "tubes".

HBB was not the only ones who forecast the bubble. The statistics were there for everyone to see and those who were watching it saw the Demand top in April 2005.

Many investors were watching this and sold their properties during 2005 before the Price top hit in April 2006.

Two of my friends sold all their holdings and are now back out there buying.

HBB are not the only ones who feel the government is going about correcting the housing market the wrong way.

I don't think they're doing everything they can for the housing industry either. However, I don't have the solution. So I continue to work within today's market, keeping my hand on the pulse and watching to see the trends so I'll know how to make adjustments in my business model if necessary.

[Captain Bill]

Originally Posted by sh9730

Capt Bill,

Thank you for taking the time to calmly answer your "critics". I agree, the information is valuable, but the DECISION is each one's to make. Yes, there may be a slight bias on your side, and I mean bias that the trend is up, not bias as in a conflict for you specifically, but at least when you present your information it is thought out and logically presented.

Some others post "thoughts and opinions" which may or may not have basis in any experience of fact, and definetely not any more worthwhile than your opinion or anyone elses.

In the end, that is what make a market. Someone is always willing to sell, and someone will buy for whatever reason.

One thing I will add though, is I gather all your statistics are mainly Maricopa county, which makes sense given your market area and interest, but in addition to QC the City, I would contend based on my research (some of which I have posted here in the past) that some of the Pinal county outlier areas such as Maricopa, Johnson Ranch, and Casa Grande, have also bottomed out (at least again in the supply/demand equation part of things).

What I HAVE still seen happening is the larger houses are coming down in per sq ft pricing, although that seems to be leveling out a little also. But what seems to now be available in our area is the total fixer at $25.00 per sq ft, or the 3000+ stuff that is coming down in price to about 60.00 per sq ft if in any decent condition.

The middle of the road stuff - starter size and condition to 2000 sq ft. - has really started to stabilize at about 70.00 per sq ft.

But again, thank you for all the time you take here to post information that you do.

Thanks sh9730,

I believe Johnson Ranch shows up in the Queen Creek mls numbers.

Maricopa and Casa Grande sales have about doubled since mid February.

The listings have decreased for both,

Months supply for Casa Grande declined to 4.2 months

Months Inventory Supply for Maricopa declined to 3.5 months,
Average price hit 114k mid March and has increased to $118k in April

While I'm looking them up, let me also get Surprise because that's another area that has strong activity, and I know there are people here interested in Surprise.

Suprise Months Supply declined to 4.8 months
Sales increased dramatically in mid Feb
Listings declined beginning week 4 in Jan
Average sale price hit $151k mid Feb and increased to $157k in April

The reason for the turn around in those areas is probably because the prices have declined to the point where they are great for first time home buyers, and great for investors.

The spikes in prices could be temporary, or just a sign of flattening out. It's too early to tell because it's only a couple weeks of data for the price increase.

I didn't look at the sales price per square foot because I'm running out of time. That could tell a different story because what I showed above is the average sale price.

[Ponderosa]

Originally Posted by Captain Bill

The reason for the turn around in those areas is probably because the prices have declined to the point where they are great for first time home buyers, and great for investors.

And the govt gives you what, 7-8K for buying a new house? Then there is the lowest interest rate in anyone's memory. Oh, and prices are at the lowest in years and years in present dollars and below replacement cost for these foreclosures. Gee, I think I'll wait a couple years.

Bill, question for you:

When you report that there is a X.x months supply of homes in some place, where does the rate of sales come from? Is the supply based on sales rates from long term data, 05-06 (were they even building in Maricopa before then), at present sales rate or what?

[azjack]

"And the govt gives you what, 7-8K for buying a new house? Then there is the lowest interest rate in anyone's memory"

The $8K tax credit for calendar year 2009 (for people who have not owned a house in 3 years) and historically low interest rates actually signal that "low" prices will go even lower when artificial props like the credit and 4.75% mortgages go away.

"When you report that there is a X.x months supply of homes in some place, where does the rate of sales come from? Is the supply based on sales rates from long term data, 05-06 (were they even building in Maricopa before then), at present sales rate or what?"

Realtors usually just total the Active MLS listings and divide it by the number of MLS closed sales in the past month.

This does not take into account historical/seasonal changes.

For example, the record number of foreclosures in the pipeline can not be accounted for in this way. Also, when sales rates peter out in mid-summer or so (as they historically do), the number of "months supply" simply goes up.

[Howard Roark]

Thanks for your good post Captain Bill and for making clear your observations, which are clearly like my observations.

I get flustered when I encounter every chant of "no one could see this coming." So that led to my two or three posts on this thread. Slogans are sometimes useful but mostly nothing but monkey chants. Like the slogan "change you can believe in."

Originally Posted by Captain Bill

Thanks for posting the "tubes".

HBB was not the only ones who forecast the bubble. The statistics were there for everyone to see and those who were watching it saw the Demand top in April 2005.

Many investors were watching this and sold their properties during 2005 before the Price top hit in April 2006.

Two of my friends sold all their holdings and are now back out there buying.

HBB are not the only ones who feel the government is going about correcting the housing market the wrong way.

I don't think they're doing everything they can for the housing industry either. However, I don't have the solution. So I continue to work within today's market, keeping my hand on the pulse and watching to see the trends so I'll know how to make adjustments in my business model if necessary.

[shiphead]

I swear i posted in this thread, did a search and found no post. My comment was I wish i could buy a house and have a low mortgage like $400-$500 with a low interest rate. The new home buyer program still requires 10% down, right?

I'm sick of paying $800 a month for a matchbox by the highway.

[azjack]

"I swear i posted in this thread, did a search and found no post. My comment was I wish i could buy a house and have a low mortgage like $400-$500 with a low interest rate."

You posted on the famous "Has the bottom hit?" thread. I think that your case of house fever is messing with your memory.

[shiphead]

Originally Posted by azjack

You posted on the famous "Has the bottom hit?" thread. I think that your case of house fever is messing with your memory.

lol dang it. Thanks man

[markas214]

Originally Posted by Captain Bill

Thanks sh9730,

I believe Johnson Ranch shows up in the Queen Creek mls numbers.

Maricopa and Casa Grande sales have about doubled since mid February.

.

Who's buying in Maricopa and Queen Creek? Those areas were never desirable before the boom and only were built up because of cheap land to build on and speculators to sell to. There is nothing out there. I'd like to see statistics showing the ratio of investors (failed flippers 2.0) and people who plan on actually locating there with their family. I just don't see a 4000 square foot stuco box planted in the middle of nowhere and surrounded by failed developement as being desirable at any price. For the person who is buying to sell "when the market turns around" the cost of maintainance of such a huge empty house will certainly cut deep into the bottom line. If and when the market does turn the flipper will then be selling house that has sat empty for several years competing with new builds.

So, while it may be true that those areas are seeing sales, I don't find it as a sign of a rebound toward price recovery. To me it seems like a sign the bottom is not in sight because these fools have forgotten how the market was overpriced and fueled by easy credit. A bottom appears when even the stupidest speculators no longer believe they can flip real estate for easy money.

[Captain Bill]

Originally Posted by Ponderosa

And the govt gives you what, 7-8K for buying a new house? Then there is the lowest interest rate in anyone's memory. Oh, and prices are at the lowest in years and years in present dollars and below replacement cost for these foreclosures. Gee, I think I'll wait a couple years.

Bill, question for you:

When you report that there is a X.x months supply of homes in some place, where does the rate of sales come from? Is the supply based on sales rates from long term data, 05-06 (were they even building in Maricopa before then), at present sales rate or what?

This is the standard way of computing months supply, and it works well in a fairly stable market.



Absorption Rate Calculations

• Determine the number of Sold Properties in the last 12 months
• Number of Sold Properties divided by 12 = Absorption Rate Per Month
• Divide number of Active Listings by the ARPM = Months Supply of Inventory

However, if there has been a change in the market, it may be more accurate to take the Sales per month, using a 7 day average. This is the way it's done at the Cromford Report.

"Sales per Month (7 Day Average) means the average Sales per Month over the last seven days. When sales are measured daily, we sometimes use the average for Sales per Month over 7 days in order to eliminate distortion effects caused by sales tending to close more frequently on specific days of the week. We use this figure to compute months supply, to avoid excessive volatility in the month supply statistics." (Reprinted from the Cromford Report)

When you compare the current month number with the previous years number, then you are comparing numbers within the season, so that you know what's happening year over year.