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To: palmer
paid 155k, sold in 1993 for 135k

About 15%. About what I'd figure for maximum drop before sellers get stubborn and refuse to sell.

Phoenix I think is now about the same price range as Las Vegas, but still cheaper than California, despite an average of 40-50% gains last year. I expect prices to be flat (forecast is 5% gain), but I seriously doubt they'll fall. California is forecast to fall, and it needs to. It wouldn't surprise me for my house to continue to rise more than average because of location.

As long as growth continues, even a little growth, then it's difficult to be "overbuilt", because the market will just fix the housing starts to match growth. It's when growth stops entirely, or reverses as it did in Houston that the real trouble starts. Phoenix is continuing to grow, and there's several reasons to think it will continue.

188 posted on 04/04/2006 3:16:07 PM PDT by narby
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To: narby
I bought in 1990 after the 88 peak. The house would have cost me more a year or two earlier. Prices had dropped and all the wishful thinkers (probably including me) concluded that they had bottomed out.

Your prices may progress on a higher long term average growth, but even if that long term average is an unlikely 10%, you will will have a couple of stagnant years or a drop before resumption of increases. I would not consider the market orderly enough to perform flat or small increases considering the carrying costs of investors are greater and they won't want to wait for years.

It's not lack of growth that is your problem, it's amateur investors who want to get rick quick. It doesn't take very many of them wanting to get out to start bidding down asking prices. I would also note that growth did not stop in Boston, although there was a realignment out of some industries as DEC and Data General faltered. But the main problem, as it is now, was speculation.

189 posted on 04/04/2006 5:05:57 PM PDT by palmer (Money problems do not come from a lack of money, but from living an excessive, unrealistic lifestyle)
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