The reason houses are still going up, for the most part, is that the builders have already secured the loans and pulled their developer’s fees out.
The builders and bankers were clearly bamboozled in this last frenzy, into thinking that these were REAL buyers, when in fact, they were phantoms.
So, the majority of homes, imo, going into foreclosure are not primary residences. They are homes speculators bought thinking they’d make a killing on flipping it. And the builders bought into it.
You’ve described the market in southern Arizona.
We bought our house in 2004. In early 2006, it was supposedly worth 50% more. Now, if we needed to sell, we could:
1 - Sell it for what we have in it in a week, or
2 - Not sell it for 3-4 years because we’re asking for the ‘2006 value’.
The toughest part would be selling it when we’re surrounded by houses purchased on speculation, so just about every other house is for sale. However, most of those were bought at the height of the boom, so they cannot sell without significant loss...and won’t probably do so for another 3-4 years easy. In that sense, it would make selling it easy...we can get our money back and sell it for 25-30% less than what all the others are asking.
But the builder kept building, and now has a ton of houses he cannot move.
That makes sense. Of course, we live in S. FL and so I only know what I see around here. We sold a home in E. TX almost 4 years ago, it took 6 months but we got what we wanted for it. Buying a house here at that time was a whole crazy experience. It was hard to find anything in our price range, and I was aghast at what 300K could buy you. Most of the homes in that price range were tiny and many were filthy and not kept up.
susie