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Is it still time to buy a home???
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Is it time to buy or sell a home???
As interest rates increase, home values/prices will decline or level off.
63%
 63%  [ 19 ]
Strong demand for housing will continue to push prices up at a record rate
23%
 23%  [ 7 ]
Sell now!!!!!!!!!Take your profits. The valley has overbuilt.
13%
 13%  [ 4 ]
Total Votes : 30

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Davis2001R6





Joined: 12 Dec 2003
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Location: Italy

PostPosted: 7/2/2005, 9:25 am    Post subject: Reply to topic Reply with quote

Good luck in KC Aaron!
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matt gilbert





Joined: 28 Jul 2003
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Location: Mesa

PostPosted: 7/2/2005, 11:42 am    Post subject: Re: home prices Reply to topic Reply with quote

rrds45 wrote:
Rent my friend, rent and wait...



I'm no expert, but I couldn't disagree more. We bought our house in the middle of the upswing of prices. We have a no-docs loan (which means higher than normal interest rates) and we're still paying less per month than we were when we were renting. While we were renting we found it nearly impossibe to put any money away for the future. Now that we own (and we bought a HUD home which needed quite a bit of fixing-up) our savings account is gradually getting larger and larger.
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pfredricks





Joined: 10 Apr 2003
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PostPosted: 11/8/2005, 9:06 pm    Post subject: Reply to topic Reply with quote

I was rereading this post and I was curious what people think know of the comments they made before. So, what do you think now?
I can tell you home prices in Surprise are falling FAST!!! and buckeye same thing, which does hold true to the outlaying theory that Randy put up.
1. Do you think more price declines will occur?
2. Buy now, hold off? What?
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Davis2001R6





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PostPosted: 11/8/2005, 9:25 pm    Post subject: Reply to topic Reply with quote

I haven't seem the bid decline that you talk about in my area, it doens't surprise me out the boonies of Surprise or Buckeye, even if they do drop a bit anyone that get in there in the last year is still making thousands. Still wish I would have a bought another house last year.

If I were renting and in the market right now, I would just follow it a bit for a few months, things will level off a bit, then next year they go up again, just at an average pace.

They are still building thosands of houses a month and further and further from the city. I agree with Randy that people are not going to want to commute, I can guarantee you it hurt a lot of people when gas was $3 a gallon. That will come into play as to which areas are going to increase in value, the ones with easy freeway access and close to town is my answer.
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Daddee
I once was a slug.




Joined: 04 Jan 2003
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Location: Mesa, AZ

PostPosted: 11/9/2005, 10:36 am    Post subject: Reply to topic Reply with quote

There have been reports of price declines in places like New York and San Francisco - but in those markets the prices were so over-valued it was practically inevitable.

I don't think we'll see anything like that here in AZ. If anything, you'll probably continue to see price increases in upscale neighborhoods that are closer to freeways or closer to downtown (and one rea-estate buddy says to look for new condo developments downtown to be the really hot comodity over the next few years).

The market has already cooled off significantly and some homes that went on the market that were a bit over priced are now having trouble selling.

My best guess is that you'll see the price increases return back to a relatively normal level, with an equal probability that the scenario Tim described will be the norm.
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Daryl





Joined: 07 Feb 2003
Posts: 1168
Location: Everett, Washington

PostPosted: 11/9/2005, 11:42 am    Post subject: Reply to topic Reply with quote

My wife is a real estate agent. I haven't seen any drops in price. Prices are not increasing as fast as they were and houses are not selling as fast as they were, but no drops. The neighborhoods my wife works have all still gone up in value each month. She works with a few investors that buy and sell houses and they are all still looking to buy, but they are being more picky now.

Note that with the market slowing down you can catch bargains here and there as some people need to sell quickly and expected to be able to, but lower prices are not the norm from what I've seen. When the market was on fire, you simply priced your house $5,000 more then the last one similar in the neighborhood, and you got it. That isn't happening anymore. Real estate is still a good investment, just don't expect 40-50% year like we had. 10-20% year is still realistic.

Also note that even areas like san diego where the average house is over $600,000 Crazy the prices are still going up.
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Davis2001R6





Joined: 12 Dec 2003
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PostPosted: 11/11/2005, 12:41 pm    Post subject: Reply to topic Reply with quote

I guess Pete may have been right about a slight decline in house.

From the Arizona Rebublic
Quote:
Housing Frenzy Cooling

Metropolitan Phoenix home prices dipped slightly in October signaling the housing market has likely peaked. The median price of an existing house inched down 1 percent in October. The housing market is returning to normal. This was the first monthly drop since December of 2003. The price of a used valley home is up 44 percent since October of 2004.


This discussion first came up in May, if you would have bought then, you still would have a nice bit of equity right now!
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pfredricks





Joined: 10 Apr 2003
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Location: Peoria, AZ

PostPosted: 11/12/2005, 10:01 am    Post subject: Reply to topic Reply with quote

Sorry about the off topic. But here goes.
I am not a real estate agent. I read lots of articles and study this a lot. I have lots of ideas about this phenomenon. It is an interesting discussion anyway. The real estate professional mantra nationwide suggests that there is not a bubble, but there is a "return to normalcy." They have a lot at stake, so there seems to be company line about the market. I am not so sure I want to listen to them to decide my fortunes and I am not so sure that I believe tham. The market has definitely changed, and it is interesting to me to hypothesize on what will happen. Several factors will dictate what will happen, but the primary driver will be interest rate.

I can say that price reductions are occurring at a quickening rate -especially in a reverse order of the most rapid appreciations-namely Buckeye and Surprise that I know of. I like to pay attention to what the builders are up to. There are now some builders actually allowing investors and offering $25000 towards closing costs. Starting to seem desperate me thinks. They won’t reduce their prices until they absolutely have to. They are reducing-just in a round about way. (still getting the consumer on back end trump expenses.)

Alan Greenspan acknowledged regional bubblets-that is very significant in Greenspeak and makes me think of the irrational exuberance speech.
What are the market dynamics?
I have studied history hard for this lesson. If we don’t remember history we are bound to repeat it…a wise man once said.
Usually a euphoric feeling of money making and exuberance precedes a market downturn. Kennedy recognized this when he overheard his shoe shine man discussing stock tips. He pulled out just before the big crash of the 20’s. Remember the excitement and common man “expertise” of the tech bubble? Not many believed that it could happen, though economists and experts like Greenspan and Buffet warned of it.
The driving force behind big price gains was short supply of houses and an increase in money supply due to low interest rates. People tend to buy based on the payment that they can afford. Consumers spent as much as they could and the builders and investors capitalized on that excess money that was created from low interest rates. The builders where just as guilty in creating artificial demand. They had houses they spec’d and just held on to them, as the prices rose-becoming investers in their own right.

Anyway, I hear a lot of people say that there are so many people moving here. True. That’s been the case for twenty years. I can also count several of my friends that have “cashed out” and moved to cheaper digs. Phoenix is building new homes at an alarming rate. Investors and speculators are moving on or already have. Many of the houses I look at are empty. Many areas of Surprise and Buckeye look like ghost towns. As supply of homes increases,( builders building and investors selling-and later foreclosures d/t arm rate adjustments esp. with sub prime lending) and the money supply shortens d/t rising interest rates-the general consumer will no longer be willing or able to spend as much on houses. Most people that needed a house already own one at a reasonable interest rate. What is the incentive to buy as interest rate increases make houses much less affordable?
Rising costs for the individual consumer will put additional pressure on the consumer. Once they find a 20% increase on their APS bill, or high gas rates, or inflation being built into prices of products it could hurt the overall financial health of many.

I would suggest that there are different kinds of investors- quick money and smart money. The smart investor was able to recognize the opportunity of low interest rates back before this whole bubble thing started. If one can’t buy a house where the rent will cover the mortgage then that’s a bad deal. I know of a few “investors” that just became investors within the last year or two. Several investors that I know of are using all kinds of creative financing based on HELOC’s from their primary residences instead of buying investment properties with LLC’s or similar. That signals a not smart investor to me. They don’t really know what they are doing!
Housing can’t “crash” overnight. But with time it can deflate. But, I would say the market conditions have begun to turn wildy in just a month or two.

One reason that the average “sale” price has only gone down a percent or two this month is because not much is selling. Many sellers are holding onto yesterdays prices. That only worsens the condition because it creates more houses on the market-more competition and if interest rates get too high, probably panic.

In one neighborhood, I saw a house on the market for 369K. It had been on the market for 85 days. It was a new build with a pool. 2400 sq feet and nicely upgraded. It had been reduced to 319K and the realtor was happy to tell me that the owner would surely take less “make an offer”. Well, the house is still on the market and hasn’t sold yet. I know that the listing expires in just about a week. So this reduction in sale price would not reflect on the books, because it just didn’t sell. It has to sell in order to be reflected on average sale price. In the far west valley, more houses are now expiring their listings than selling. That is quite a turnaround in such a short time. I could give 30 more examples of that.

Anyway, I will quit ranting. But finish with this. A lot of this depends on where the interest rate heads. 2/3 of all jobs in the valley are dependent on housing in some fashion. If that market cools, who is going to buy all of the houses?
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pfredricks





Joined: 10 Apr 2003
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Location: Peoria, AZ

PostPosted: 11/12/2005, 12:03 pm    Post subject: Reply to topic Reply with quote

http://www.msnbc.msn.com/id/8874568/


I posted all that to get a response on what you think. Are there any more ideas???

I know this is a hiking forum, but, It seems like a good place to get local friends' thoughts.

-Pete
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Daryl





Joined: 07 Feb 2003
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Location: Everett, Washington

PostPosted: 11/13/2005, 9:35 am    Post subject: Reply to topic Reply with quote

Closing costs is typically 2-3% of the value of the house. If your closing costs are $25,000, you are buying a $750,000 house and the builder is really not giving you all that much. And... closing costs pay the title company and the lender, which the builder usually owns. Paying your closing costs is not much for them.
Also realize, that the builders add the cost of these promotions into the cost of their house. Do you really think you are getting a free pool or $5,000 off upgrades when you buy a house? They mark up the base price and offer the discounts and kickbacks to make you feel like you are getting a deal.

Also, you can't look at Surprise and Buckeye as market indicators. Look at Phoenix, Tempe, Gilbert and Scottsdale. Areas like Surprise, Buckeye, Queen Creek, Anthem are on the outskirts. Any downturn in the market will get magnified in these areas because the main reason people moved to these areas were low prices. When the prices are no longer low, there is little reason to move there, so when the prices drop anywhere, they drop more in the outskirts. My wife's investors wouldn't even buy in these areas when they were hot.

Look at average home prices on the east and west coast. Well over $500-600K. One bedroom condos in SanDiego go for $1million and they are not all that fancy. We still have a lot of room to go up.

We live in a desireable place to live. We don't have to fear hurricanes, tornados or earthquakes. We don't have toe numbing cold and snow, the reasons I moved here and the reasons most others moved here will continue to draw people. Real Estate will keep going up over the long term. After the big gains, it may slump slightly, but I'd bet the farm that it will continue to rise at a pretty good clip.
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thesuperstitions
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PostPosted: 2/28/2006, 9:11 am    Post subject: Reply to topic Reply with quote

Just saw this online today:

The Realtors said home sales were slowing in the priciest markets where an increase in mortgage rates will have the biggest effect on buying power. Sales dropped 10 percent in the Northeast, 7.7 percent in the Midwest and 3.5 percent in the West.

http://biz.yahoo.com/rb/060228/economy_existinghomes.html?.v=2
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thesuperstitions
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PostPosted: 6/6/2007, 9:03 am    Post subject: Reply to topic Reply with quote

It's been a couple of years now since this topic was originally put forth. I'm wondering now, with 2 years hindsight, if buying into the rising housing market got folks in trouble in general or if they made out OK. Not necessarily looking for personal stories, but more of a general feel of how the folks in the Phoenix area made out now that the housing market is going through a downturn.

Do you hear a lot of stories about people that took out interest-only loans to get into houses they couldn't otherwise afford and now are stuck with a loan on a principle that's more than they could sell the home for?

I remember at the time, thinking that lots of folks were going to get hurt when the market cooled off. Housing prices DO indeed go down, and, as pointed out so astutely by pfredricks, usually in conjunction with higher interest rates.

It looks like interest rates are, at best, staying level into the future, and may be heading up due to the energy-cost inflation that really hasn't hit us full-force yet. So I'm curious as to the general consensus about the housing market out there. Is it time to buy, sell or hold?
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MikeInFHAZ





Joined: 15 Feb 2004
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PostPosted: 6/6/2007, 10:12 am    Post subject: Reply to topic Reply with quote

its time to sell, and get out of the country!
ok, thats a bit extreme- but if you understand that when interest rates hold below the rate of inflation for an extended period, a recession follows. The only way to stave off recession is to keep interest rates low. Do you see the cycle? We could be and I believe we are heading for a 1929 style crash with depression to follow. Sorry to be Cassandra, but the market analysts are crying stock market failure. We'll see.

Couple with that the trend to drop the Dollar as the petrocurrency of choice (latest to do so was Kuwait) and we are facing a downturn in spending, with hyper-inflation at a worthless dollar. Times are soon going to be very hard for some indeed. Hang in there, fellas.

On a lighter note, Alan Greenspan is enjoying his retirement.
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Cynhikr





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PostPosted: 6/6/2007, 1:30 pm    Post subject: Reply to topic Reply with quote

First-quarter foreclosure filings since 2005
2005 -2006- 2007 % chng. 2005-07
Pima County 943- 1,199 - 1,427 -------51%
Maricopa County 3,768- 3,946 -7,852------- 108%
Pinal County 289 -360 -961- ------233% (caveat here is that almost no one LIVED in Pinal Co. in '05)
Arizona 5,896- 6,232- 11,757 -------99%
United States 209,977- 323,101- 437,497---108%
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thesuperstitions
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PostPosted: 6/6/2007, 2:52 pm    Post subject: Reply to topic Reply with quote

I think those stats tell quite a story. Unfortunately, a lot of people that really couldn't afford to own homes got sucked into buying through the "gimmick" loans and then got caught in the squeeze. Then there were those that got greedy and overextended themselves to buy a 2nd or 3rd house, banking on ever-higher sale prices. Ponzi (pyramid) schemes never work for the masses. A few individuals make out, and the real-estate agents and lawyers make out, but the masses always lose.
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