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

[TerryTurtle27]

Every year they push the bottom of the market out another year. Much more pain ahead for Phoenix in the coming year. If you don't want to lose 100% of your 20% down payment, don't buy in the year ahead.

Money magazine real estate: Home price forecasts and housing data for Phoenix - Money Magazine on CNNMoney.com

[markas214]

If prices do drop 19.1% they are still up 18% from before the rapid increase. Those who bought prior to 2002-2003 still should be ahead next year if they didn't "cash out" and have been paying down a mortgage for over 8 years. I am seeing so many tempting prices now it is but there is absolutely no reason to rush in. This is definately still a time to rent and wait.

[azriverfan.]

Luxury houses are still in high demand. I've been hearing about these so-called great deals and they are nowhere to be found in regards to luxury homes. The competition for those homes are stiff regardless of the area or city. And in general, houses in great neighborhoods are starting to recover their value. The houses that I have seen sit on the market are the 4000+ sq ft 5 bedroom homes in the cookie cutter neighborhoods. People can't unload those and they are losing value fast. Those houses are just too big for the average consumer but don't interest people with money because they lack the unique quality of the custom built homes that are similar in size.

[shiphead]

How could anyone guess when the bottom has hit? There are no new revolutions or changes in the market, so im honestly waiting. Market going up 7% in one day shows how unstable NYC still is. As far as the Luxury market, i love arizona luxury houses, some of the architecture is very beautiful.

[markas214]

Originally Posted by azriverfan.

Luxury houses are still in high demand. .

The number of houses priced above the conforming limit needing jumbo loan financing are at record levels. They may still be asking huge prices but they are not selling many. If this is the type house you are in the market for I'd wait a couple years.

A quick search of Realtor .com for houses over $600k showed 2900 houses for sale in Scottsdale alone. When I expanded the search to within 20 miles of Scottsdale there were over 5200 for sale. Of those there were 2860 listed for over a million dollars. Plus another 1000 houses for sale between $500k and $600k. There are years of inventory in the luxury market which by the way will be disproportionally affected with the Option ARM resets this year and next.

[Captain Bill]

I'm not sure how that article used their numbers to make a forecast because they used numbers for different years.

They show a 2008 median price or $190k and forecast a 19% decline by March 2010. So they are forecasting a median price of $152k by 2010.

The February 2009 median price is already $125k for the Phoenix metro area.

The median price had declined below their forecase before they even printed their article. How smart is that

If a magazine is going to make forecasts, they should keep their numbers consistant and accurate.

It has fallen 53.2% from the peak of $267k in June 2006

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.

Medium priced areas sucn as Mesa, Gilbert, Chandler and Peoria are also seeing an increase in sales and pending sales.

The % decline can be misleading and may lead people to the false impression that the high end homes will decline at the same rate and as far as the distressed homes.

In 2000 the homes sold were a mixture of some distressed, low end and high end homes.

The increase in sales up to 2006 were predominately sales of high end homes with people moving up.

The increase in sales today, and the decline in prices is predominately lender owned homes sold AS IS.

The steep decline in prices today are mostly in the distressed homes; lender owned; pre-foreclosures, etc. Most of these homes require repairs, appliances, and do not come with any type of warranty, nor any history of insurance claims (may not be insurable), and are being sold by banks and people who are in a distress situation.

The higher end homes that are in top condition, that are sold with a warranty, and insurance claim history, no repairs needed, have not declined in price nearly as much as the distressed homes. And it is likely that they will not. The median price in Scottsdale has declined in the ball park of 25%, and cannot be expected to decline as much as distressed properties.




The median price for Scottsdale homes:

• October 2006------$640,000
• March 26, 2009----$485,000

Naturally, these more expensive homes will sell at a slower pace. There are plenty of people who can afford these homes, and there is mortgage money available to buy them. The loans are harder to qualify for, and are harder to obtain. But they are available. At this point it's more of a matter of non-confidence in the economy.

We saw in 2005/06 that price lags behind supply/demand by months. Those who were aware of how the market indicators work were able to sell their property prior to the top because the supply/demand index showed them that the top in price was coming.

The same thing will happen here at the bottom. The supply/demand indicators have already reversed, and the price reversal will follow.

[markas214]

Originally Posted by Captain Bill

The same thing will happen here at the bottom. The supply/demand indicators have already reversed, and the price reversal will follow.

Nearly 50% of homes sold are foreclosures. That has never happened before. We just had a price increase of over 300% in some areas. Also never happened before. Historical data is useful but we are in a new situation here. There were 750,000 jobs lost in March. Trillions of dollars of net worth were lost in the stock market collapse so even those who we consider rich have lost a large percentage of their wealth. Finally, if anything the forecasts have underestimated the size and pace of declines and those who have called a bottom or have believed prices were leveling off have been dead wrong since 2006.

I do not want to be the negativity man but as a buyer with cash and good credit I would rather wait than lose $60-80,000 the first year after I buy a house. Also every month I watch more and more houses that are pretty spectacular fall into my upper price range. That fact keeps me on the sidelines waiting for an even better house. Until there has been a sustained bottom or an absolutely insane deal surfaces I plan on staying there. I have interviews this week and should move in a month or two. The price to rent ratio is getting very close. In fact buying could be cheaper. The fear of a big loss of equity is the thing that will keep me a renter for the time being.

[azriverfan.]

Originally Posted by markas214

The number of houses priced above the conforming limit needing jumbo loan financing are at record levels. They may still be asking huge prices but they are not selling many. If this is the type house you are in the market for I'd wait a couple years.

That's a good point and that is what is occuring. Those homeowners are not asking for less but their homes are not selling either. Yeah, I'm going to wait a couple of years. Good post

[azriverfan.]

Originally Posted by Captain Bill

I'm not sure how that article used their numbers to make a forecast because they used numbers for different years.

They show a 2008 median price or $190k and forecast a 19% decline by March 2010. So they are forecasting a median price of $152k by 2010.

The February 2009 median price is already $125k for the Phoenix metro area.

The median price had declined below their forecase before they even printed their article. How smart is that

If a magazine is going to make forecasts, they should keep their numbers consistant and accurate.

It has fallen 53.2% from the peak of $267k in June 2006

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.

Medium priced areas sucn as Mesa, Gilbert, Chandler and Peoria are also seeing an increase in sales and pending sales.

The % decline can be misleading and may lead people to the false impression that the high end homes will decline at the same rate and as far as the distressed homes.

In 2000 the homes sold were a mixture of some distressed, low end and high end homes.

The increase in sales up to 2006 were predominately sales of high end homes with people moving up.

The increase in sales today, and the decline in prices is predominately lender owned homes sold AS IS.

The steep decline in prices today are mostly in the distressed homes; lender owned; pre-foreclosures, etc. Most of these homes require repairs, appliances, and do not come with any type of warranty, nor any history of insurance claims (may not be insurable), and are being sold by banks and people who are in a distress situation.

The higher end homes that are in top condition, that are sold with a warranty, and insurance claim history, no repairs needed, have not declined in price nearly as much as the distressed homes. And it is likely that they will not. The median price in Scottsdale has declined in the ball park of 25%, and cannot be expected to decline as much as distressed properties.








The median price for Scottsdale homes:

• October 2006------$640,000
• March 26, 2009----$485,000

Naturally, these more expensive homes will sell at a slower pace. There are plenty of people who can afford these homes, and there is mortgage money available to buy them. The loans are harder to qualify for, and are harder to obtain. But they are available. At this point it's more of a matter of non-confidence in the economy.

We saw in 2005/06 that price lags behind supply/demand by months. Those who were aware of how the market indicators work were able to sell their property prior to the top because the supply/demand index showed them that the top in price was coming.

The same thing will happen here at the bottom. The supply/demand indicators have already reversed, and the price reversal will follow.

No offense Captain Bill but you are a Realtor. A realtor obviously doesn't want people to wait to buy homes. There is an obvious conflict of interest here. Wouldn't you be skeptical if you were in our position? I like your response above and I think you made some fair points. Good response

[Ponderosa]

Barring some unforeseen economic collapse, home values in Phoenix metro "bottomed" around October of 2008. Median prices are misleading as they reflect the relative share of foreclosures. Compare house to house over the coming months. Watch your own house with Zillow. You are not going to see a big value change in THAT house though it may bounce around a little. The worst is over. In a year or less homes will resume appreciating and in a couple years, they will be back on trend again, will make up the undershoot where that has happened, and be tracking gains in wages. This too shall pass.