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Hi gregandvicky - I've been noticing your posts on the AZ thread. I'm up here in Prescott, and fortunately we have not been as affected by the meltdown as Phoenix. Phoenix had a TON of new builds, which really helped glut the inventory down there. Sounds like you've heard the scare stories. A poster on this thread who's been watching the Phx prices said she's seen a $90k drop from an original list price of $325k down to $235k. Ouch! If you happen to be the seller.
I understand you're from Austin. That actually puts you in a pretty good position because your market there is still strong while the Phx market has tanked. As far as knowing when Phoenix has hit rock bottom, that would be hard to predict. However there are some real steals down there now, with many homes at bargain basement prices. If you're wanting to buy new, then look into an inventory home in one of the new subdivisions. (Those are homes that the buyers are unable to complete their contract, so they're almost complete. A lot of times you can still pick things like flooring, counters, and appliances) Builders are desperate to unload those, so there's some bargains there (vs. having a new home built with your specific upgrades/options).
Also, probably the best deals can be found on newer resale homes, REO's, and short sales. Unfortunately the REO's and short sales can be a pain, but they can be real bargains. There was one on our MLS today (sold before it even hit the MLS). It was a 3bdrm/2ba/3cg on 1/2 acre lot in a great area WITH VIEWS, 1700 sf, blt in 96. The owner had paid $280k for it in 2005. It went into foreclosure in July, and the bank bought it back for $233k. It was in MLS at $185k!!! Unbelievable!
I know you'll find similar deals right now down in Phoenix. A word of caution - many builders are in serious financial straits right now. If you purchase in a new home subdivision make sure it's getting close to being built out. You don't want to end up in one of the few finished homes in a subdivision and have the builder go under, leaving bunches of vacant lots and half-finished homes. It will look like a blighted area, and you'll have problems reselling for a long time.
Hope this info helps in the decision making process.
PS Are you sure you don't want to move to Prescott?
Hi gregandvicky - I've been noticing your posts on the AZ thread. I'm up here in Prescott, and fortunately we have not been as affected by the meltdown as Phoenix. Phoenix had a TON of new builds, which really helped glut the inventory down there. Sounds like you've heard the scare stories. A poster on this thread who's been watching the Phx prices said she's seen a $90k drop from an original list price of $325k down to $235k. Ouch! If you happen to be the seller.
I understand you're from Austin. That actually puts you in a pretty good position because your market there is still strong while the Phx market has tanked. As far as knowing when Phoenix has hit rock bottom, that would be hard to predict. However there are some real steals down there now, with many homes at bargain basement prices. If you're wanting to buy new, then look into an inventory home in one of the new subdivisions. (Those are homes that the buyers are unable to complete their contract, so they're almost complete. A lot of times you can still pick things like flooring, counters, and appliances) Builders are desperate to unload those, so there's some bargains there (vs. having a new home built with your specific upgrades/options).
Also, probably the best deals can be found on newer resale homes, REO's, and short sales. Unfortunately the REO's and short sales can be a pain, but they can be real bargains. There was one on our MLS today (sold before it even hit the MLS). It was a 3bdrm/2ba/3cg on 1/2 acre lot in a great area WITH VIEWS, 1700 sf, blt in 96. The owner had paid $280k for it in 2005. It went into foreclosure in July, and the bank bought it back for $233k. It was in MLS at $185k!!! Unbelievable!
I know you'll find similar deals right now down in Phoenix. A word of caution - many builders are in serious financial straits right now. If you purchase in a new home subdivision make sure it's getting close to being built out. You don't want to end up in one of the few finished homes in a subdivision and have the builder go under, leaving bunches of vacant lots and half-finished homes. It will look like a blighted area, and you'll have problems reselling for a long time.
Hope this info helps in the decision making process.
PS Are you sure you don't want to move to Prescott?
Wow great info, Thanks. On the Bloomberg news today it said Beazer Homes is about to default or having problems with its 5 lines of credit that are very large amounts but I did not see the rest of the story, which goes to exactly what you said about being careful with builders.
I would absolutely prefer Prescott to Phoenix but nothing new in our price range. My son went to Yavapai and I visited several times and love Prescott. The lowest price on new construction I could find was more than our $165000 max.
Wow great info, Thanks. On the Bloomberg news today it said Beazer Homes is about to default or having problems with its 5 lines of credit that are very large amounts but I did not see the rest of the story, which goes to exactly what you said about being careful with builders.
I would absolutely prefer Prescott to Phoenix but nothing new in our price range. My son went to Yavapai and I visited several times and love Prescott. The lowest price on new construction I could find was more than our $165000 max.
Wow great info, Thanks. On the Bloomberg news today it said Beazer Homes is about to default or having problems with its 5 lines of credit that are very large amounts but I did not see the rest of the story, which goes to exactly what you said about being careful with builders.
I would absolutely prefer Prescott to Phoenix but nothing new in our price range. My son went to Yavapai and I visited several times and love Prescott. The lowest price on new construction I could find was more than our $165000 max.
Again Thanks
Yeah, unfortunately at this point, the lowest priced new builds up here are $190k+/-. Who would have ever thought a few years ago that new homes in Prescott/Prescott Valley would be pricier than Phoenix? I don't know - you may want to check it out. If you're willing to bite the bullet a little, I have a feeling our future appreciation may be a little higher than Phoenix. It's going to take a very long time for all the inventory down there to get bought up.
Whatever, if you make it up this way, be sure to stop by and say, "hi". Or as we say up here in "Preskitt" (and Austin, too), "Howdy"!
Gretchen - Why so much new inventory in Phoenix? Our Builders in Vegas went pretty much to build only to contract 18 months ago and have almost no inventory at this point. What was different in Phoenix?
olecapt - I am a little surprised that Vegas is in better shape than Phoenix. Here's a couple things that might play into the scenario. First of all, back in about early 2005, AZ was seeing quite a few Vegas investors bailing out of their Vegas properties and buying in AZ (a little bit cheaper here at that point. They were figuring Vegas was pretty much at the top then.) So, of course, the builders responded to the influx of investors and built, built, built. I also think the AZ builders were very slow to respond to the signs of the weakening housing market. They've really put the brakes on since last fall/beginning of 2007, but it was already too late. That, coupled with investors dumping their resales and unqualified first-time buyers getting in trouble with ARM's, there has really been a much more significant increase in inventory than what anybody figured. The other thing we're seeing up here in Prescott (and I'm assuming the problem is magnified in Phoenix) are new home buyers having to bail out of their contracts on the new builds. It's really sad - people are leaving $10k-$20k on the table because they can't get their homes sold wherever (usually Phx) and can't complete their contract. Results: lots of builder inventory homes.
Of course, I'm not down there in the Phx market, and maybe a couple of the Phx realtors can give us a little more insight.
Personally, while I know the builders are really hurting right now, I'm thinking the slow down in new construction was long overdue. The only thing that's helped us a little up here in Prescott is the fact that most of the land is difficult to build on, so we have far more spec homes than we do new home subdivisions. And even in Prescott Valley and Chino Valley where there's flat buildable land, a lot of it is still in the hands of the old-time ranchers. They parcel it off as the economy and growth dictates (make a killing on it), but at least it's kept things sane up here.
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