I guess we won't need all those illegal alien construction workers anymore. I'm sure they'll all go back to Mexico now, right? We should make the construction companies pay for the medication, education, and incarceration costs for all their illegal employees instead of having the tax drones doing it for them.
They jacked up the prices so high no one can afford to buy. Killed the goose that laid the golden egg, so to speak. My house more than doubled in "value" since 1986, but so did any replacement house I would have to buy to replace it.
Drive 45 miles west of Phoenix on Interstate 10, take exit 98 and go south. The first sign you see advertises a new housing development with prices "from the high 200s." Way out in the middle of nowhere. What a joke.
"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." -Manuel II Paleologus
AZ will recover because it has demographics on its side. People will continue to move out of CA,NY,MI,OH etc. and move to the Southern US. There are probably some good deals long term in AZ now. If you read the whole article is states houses are selling for between $60-80/sq ft. You CANNOT build a house anywhere near that price especially in that market. It is a CLASSIC correction in an overheated real estate boom where too many short term investors got into real estate similar to the stock market bust of 1999. If you can buy a house and rent it to cover your cost it could be a good LONG TERM investment.
Imagine that. Prices went up and up to a point where folks stopped buying. What could possibly explain that?
The one thing that developers refuse to do is to migrate their business from a "bubble" business to a "long-term strategy" business.
That is, they have mastered the art of building cheap and cheaply-made, high-margin homes on small lots. The extra expense comes in by adding many additional angles to the design, both inside and outside. That is, non-right angle corners are far more expensive than right angles. typically, prices for these crackerboxes start at $350k.
However, they make a strategic error by just halting production during market slumps. They could take advantage of a weak market by combining lots and building well-made, expensive houses. Instead of building three houses to sell for $300k, build one house to sell for $1.2M.
By taking their time with each house, and throwing in lots of luxury finishing, they both use up the slack time of the slump, and still get healthy margins.
By "luxury finishing", I mean everything from above standard electrical, plumbing and sewage; to expensive inlaid tilework; to custom-built kitchens; elaborate swimming pools; complex landscaping; panic rooms; even basements, which are rare out West.
The idea is not to build "speculation homes", but to build unique houses, designed to last and be inherited, not sold.
Architectural style would also come into play again, with homes designed for particular purposes, like very high energy efficiency emphasizing solar power; high-security homes; groups of homes built in a cluster to create a greater sense of community with neighbors; child-oriented homes; homes that have a cultural architectural style; and high-tech homes.
While developers make some gestures to specialization like this, they steadfastly avoid expensive and time-consuming quality, and go for the cheap and cheerful, production model gimmicks and trendy items.
But the great secret is that when a housing bubble explodes, it does not effect all housing; just the housing that was part of the bubble. There are still plenty of buyers with plenty of money. And the best part is that building materials cost far less during a slump.
In my local area there have been a lot of price reductions, but sales are very, very stagnant. Very little moving at all.
I'm still here! Gave up trying to sell for the time being.