Posted on 01/26/2023 9:00:52 AM PST by Boomer
They forecast that San Jose, Austin, Phoenix, and San Diego will likely see peak-to-trough declines of more than 25%. Such declines would rival those seen around the country around a decade-and-a-half ago. During the mid-2000s housing crisis, home prices across the US fell around 27%, according to the S&P CoreLogic Case-Shiller index.
(Excerpt) Read more at businessinsider.com ...
In a note to clients earlier in January, strategists at the bank said that their outlook on the housing market had worsened, and that they believed the S&P CoreLogic Case-Shiller US National Home Price NSA Index will decline by 6.1% year-over-year by Q4 2023. Their previous estimation was -4.1% over the same period.
Get ready to deploy your readily available cash! What's that? You don't have any after buying eggs?
In Phoenix, at least, this will return things to pretty much normal. Probably the same for the others.
These markets(especially Phoenix) are also the places where there was a high percentage of speculative purchases again. Just like in 2004/5 when the SH#T hit the fan.
These CA markets feed the other US markets. So, IF you are now off sides on your house in San Jose you can not buy a new house in Austin. Unless you want to take a loss to sell.
Housing prices are changed at the margin with transactions.
For that reason outside hedge fund and other investment purchases and/or sales drive the market in those markets where they are significant players.
Either the prices will remain stable or there will be a massive market-wide selloff and panic.
I don’t see how the “middle ground” is possible.
Unless there is a structural good reason for a massive change in trend most things eventually revert to their mean. This is no different. Not falling victim to the fad of following up or down us unglamorous but it usually pays off.
Remain calm, stay the course and don’t give in to temptation. Play for base hits or 3.5 yards per carry. Doing both consistently will eventually win the game unless someone gets lucky and beats the odds. Luck is not a strategy.
I can see that people would start moving out of CA, but I can’t see that happening in PHX or AUS. To suffer this level of reduction, there would need to be a substantial reduction in demand for housing. Oh wait, maybe if they clean the voter roles in AZ those ghost voters will no longer be looking for housing. Both PHX and AUS are still seeing large population growth, with PHX increasing by 1.4% in 2022, and Austin by 2.79%
Ha! Tell that to the tax appraiser.
Good, it’s way past time for a housing correction. And it will be coming in a lot more than 4 markets soon enough.
There is a lot of commercial/warehouse/industrial development in the Phoenix area (esp. the Westside)...all to supply Southern California.
Phoenix will present good opportunities.
I miss hydroshock
I just read an article about some suburbs of Scottsdale where the city cut them off and left them to find their own water.
Despite the WH communists/socialists/fascists/marxists/anarchist idiots and morons protestations to thew contrary, WE ARE IN A RECESSION, and a DEPRESSION IS COMING THIS SUMMER. And I fear it’ll make 2008 look like a walk in the park.
If SoCal built a lot of good reservoirs to capture more of the 95% of the rain water that ends up in the ocean, Phoenix and Las Vegas could possibly get more. Both these desert cities are in water danger right now. It might get to the point of rationing.
Here in NW Arkansas I bet there are 20-30 new subdivisions being built within a 25 mile radius of my house.
Buy at the bottom of the trough.
The crisis in 08 09 in Phoenix was much worse due to the over lending. The values fell to half. I got out there in 12 and they had already recover 50% of the loss by the time I bought in 13. However, in the last decade they have almost doubled and a 25% loss won’t put them back too far.
I guesstimate that the home I had had been 225 in 04 when built and would have fallen to 150 but was not sold in 08-09. It did sell in 12 fore 220 and I bought it in 13 for 230. I sold it for 430 in 21 and house nearby are going for 450 today. If it losses 25% it will still be at about 337 and will hardly be in free fall.
Having lived there from 12 to 21 I have a changed view. The Salt River project gives that valley 2/3rds of its water — it is not as dependent on the Colorado as many people think,
The typical quarter section around the perimeter now in agriculture uses more water prior to being tuned into a subdivision for its four-cropped cycles than it does as homes. Drip irrigation and water saving appliances keep the water usage down and water cost is not near as bad as most of California for example.
I’ve been in phoenix and Scottsdale on several occasions and for that matter Bisbee and a number of other places in AZ as well. I saw a lot of houses with lawns and eastern shrubbery especially around Scottsdale. Total waste of water.
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