Posted on 02/16/2009 2:24:42 PM PST by Lorianne
See link below to story
I would love to hear Phoenix resident comment on this situation. I may be buying a home in the area soon - well, within 6 months.
There are 106 comments at the end of the article.
I have a brother who owns a couple homes out there. His second was a bit steep, but was new and in a great neigborhood.
Two years after the purchase, the economy collapses and many owners in his neighborhood were cast out due to the sub-prime fiasco. Many who lost homes trashed them before they left. (I know.) Then the values of all homes in the neighborhood plummeted.
He’s stuck with a flat-rate mortgage he can manage, but it’s obviously pegged to the original value. He’s pissed.
I’m near Tucson, so don’t know if this will apply...
I just reviewed comparables for homes in the area near me, since we were looking at buying a second home and renting out the one we are in. Prices/sq ft ran about 150/Sept, 115/Nov, 110/Dec, 107 Jan. A home near us was up for foreclosure...the people renting there offered 320K in Sept, and were told the minimum bid was 380. They declined, and moved out. The house just came on the market - asking $290K for 3150 sq ft home on one acre.
The realtor I’ve been working with thinks were hitting the bottom or close to it. The problem is that if interest rates go up (the Obama stimulus/housing collapse), then people won’t be able to afford as much, and it will drive prices down.
Most folks buying right now are looking for low prices. Probably with a goal of <100/sq ft. And there are going to be more foreclosures, as people decide to walk away from what they owe or are forced to move to find work, and cannot sell for what they owe.
With the federal government competing for cash, I don’t see how interest rates cannot rise. Obama has already accepted 2 trillion in deficit spending this year...I see that as a home market killer. Maybe I’m wrong.
It was based on a false/illegal population increase:
Some recent Arizona stats:
Arizona population: 6,338,755 (2007 est.)
More than 991,584 people living in Arizona last year were born in other countries.
And 70 percent of them are not U.S. citizens.
That 991,584 estimate from the federal agency amounts to 15.6 percent of the state’s population.
Only 12.8 percent of Arizonans were foreign-born in 2000.
Ten years before that, the figure was 7.6 percent of the population.
But a separate report released by the U.S. Department of Homeland Security estimated Arizona’s “unauthorized” population in January 2007 at 530,000, which would be about three out of every four non-citizen residents.
“More than 991,584 people living in Arizona last year were born in other countries.
And 70 percent of them are not U.S. citizens.”
Just think what Janet Napolitano can now bring to the whole U.S.!
I live in Glendale which is to the west of Phoenix. My daughter and son-in-law just closed on a house in Chandler, which is south and east of Phoenix. The areas in the west have had the biggest downturn in value. Chandler and Scottsdale have held up in price better [from the standpoint of the owner/seller]. This made it quite difficult for my daughter to buy in Chandler.
They looked at bank owned properties. Many of them were trashed. My daughter called two hours ago to see if I would help tear out soiled carpets and clean this weekend.
My son lives in Awatukee, which is a suburb in the south of Phoenix. He plans to sell his house and buy a new, larger home in the Chandler/Gilbert area.
Her real estate agent worked tirelessly and wrote offers on over a dozen houses. We have known Ken for over twenty years from church. [Mail me privately if you would like his name.]
The county lists property tax status online and it is pretty easy to see if a property is behind in paying taxes. They show it on a map so it is easy to find neighborhoods where there are definite foreclosure problems.
Sounds identical to what is happening here in Florida too.
Go ahead and read the article, it’s quite true. One paragraph talks about traffic congestion along the Hunt Highway (Queen Creek, Merrill Ranch, Circle Cross Ranch). My son lives there and works 45 minutes away in Tempe at the University. It doesn’t look good for him right now with the budget cuts planned for Arizona’s universities.
There are good deals to be had and good places to live in the Phoenix area. Surprise is one such - NW of town along Bell Road and the 303 Loop. My sister lives there - shopping and schools are established, the roads are good, but I don’t know what the home prices are like.
Fact is, if you buy a foreclosure in an established neighborhood, then you’re in like Flynn.
There are areas especially south of Phoenix and the near west side that are lower in price, even more. I bought up north, which is much more stable in that regard. I didn't see any reason to try to time exact bottoms or to chase the lowest possible prices - instead I bought quality. Still paid half what the place last sold for, and the house is less than 4 years old and was not trashed at all. Needed only minor cleaning and fixture stuff.
Down south there are entire suburbs that never filled. The foreclosure problem is much bigger there, and houses are more likely to be run down. Still, I bet tons of people are, like me, just writing off entire regions as too risky, and ignoring the diamonds among that rough. There are so many places offered, for a song, there have to be a ton of those.
I told a friend contemplating a house purchase in the northeast what he could get for the same price out here. It came to -
(1) a larger house, more recent construction, in a nice neighborhood on the north side
(2) a second rural property upstate or in southern Utah for summer vacationing
(3) a large recent house in a south suburb as a speculation or rental property
(4) a second large recent house like the previous
All of them. For the price of one 3 bedroom, ancient frame house in the northeast.
It is just insane.
What happened is, the bubble here took the form of buyers expecting house prices in Phoenix to converge with those in the rest of the country. Prices were low here to start with, and the population booming (3% a year, still going). It seemed to make sense to expect prices to move up to the national average level, which would be a big move from their original bargain levels.
But the builders built enough to take something like the whole country's new housing needs in just the SW and Florida, thinking that is where population was moving and wanted to be. In Phoenix, the land is free but the improvements aren't. Once they build a subdivision, they've paid all the improvement costs, and need to sell the houses to recoup them. But if they can, they can always print more houses. They'll never run out of land.
As soon as prices stopped going up, everyone backed out of their purchase contracts on the newer subdivisions, especially south of Phoenix, between it and Tucson. Houses built for $250,000 3-5 years ago are standing empty and have been standing empty for a year or more. Some of those have gone to seed as a result. Others have cut their prices so low they attract less desireable tenants. So some neighborhoods have turned into half empty places. Houses there list for $80,000 that cost 3 times that to put up. Nice places, if kept up or repaired.
The right thing to happen in those neighborhoods is for enough middle class people to come in at once. If that happens you'd fix them up quickly and they'd be worth twice their current quotes or more, easy. But you need critical mass. (Like a church group, mebe, that'd do it I mean). In the meantime, the low quotes for those are dragging down the whole tiered price structure. You don't need to go all the way down-market to benefit from it. I didn't, and I'm very happy with what I got.
But real estate never goes down in value! Just listen to your friendly local realtors looking for a 6% commission. They are there for you!
Well all those who bought in those markets the past couple years shouldn’t worry. Susanne researched it!
http://www.youtube.com/watch?v=Ubsd-tWYmZw
Those real estate agents are having it tough now, and we have not even bottomed out.
My SIL hasn’t sold a house in six months.
It’s a buyer’s market, that’s for sure. I would be careful about buying in an area with a street full of foreclusures. Buy as close “in” as you can. Our neighborhood has had only one or two foreclosures that I know of. Our homes are all block construction, we’re close to a neighborhood of mini-farms, yet only a mile from a major mall and shopping area. There are some very, very nice areas that are affordable.
Of course, this is the message the author is trying to get across: that everybody will be miserable unless development is centrally planned, and controlled by the libs.
But it's utter hogwash. People who made smart decisions will survive the bear markets. And malinvestment will be shaken out of the system.
Builders still can't sell many of the houses they built in the Valley's fringes communities.
They can sell anything at the right price.
I was looking at homes in Surprise on Realtor.com and then checking them on the map w/google. Homes for $75K and in decent shape.
There are a lot of homes in the $100K range...sure seems like a good buy for a second home.
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