Is Your Housing Bubble Worse Than Phoenix?
One reader wonders which housing bubble is in the worst shape. “Can we discuss the worst market today? There are some strong candidates such as Phoenix, Miami, Las Vegas. My immediate candidate is Phoenix with soaring inventory, punishing drought, ready buildable land available in all directions, and huge numbers of SFR’s owned by speculators. Perhaps posters could argue the case for their candidates.”
Another replied, “My neighbors put their Northern Virginia house on the market today. They are retiring to Phoenix! They have already bought new construction, being built as we speak. They bought here in 92 and according to tax records are asking 2.5x orig. price.”
Here is an article on the Phoenix new home market. “It only takes scanning the local newspaper advertisements to see how some new homebuilders are dealing with a softer market in 2006. Despite often putting down thousands of dollars in earnest money, more people are walking away from deals they signed during the whitehot market last year, leaving some builders with higher stocks of homes under construction.”
“Combine that with a strong push to meet sales projections and it’s clear buyers jumped from a fastpaced merry-go-round last summer to the driver’s seat.”
“Buyers who can’t sell their current homes in the cooling market are backing out of move-up home purchases. And investors who are worried they bought at the top of the market are also ripping up contracts. Buddy Satterfield, president of Shea Homes’ Arizona division, said the company’s cancellations over the last month are double normal rates.”
“‘We’re getting some homes that aren’t all the way through to completion because people haven’t sold their existing homes,’ Satterfield said. ‘That’s the primary driver. Resale listings have increased, so people have a lot of options out there.’”
“At Scottsdale’s Meritage Homes incentives are being offered at certain locations for homes under construction. ‘The closer it gets to completion, the more interested we are in getting it sold so it can close once it’s finished, because we don’t want to have a bunch of finished unsold homes standing around,’ said Larry Seay, CFO.”
“The extra money can make up for having to resell the home in a slower market, Seay said. The deposits can be enough to make some money on the deal, and sometimes the home has to be discounted to sell it, he said. ‘That deposit money we keep winds up kind of covering our discount,’ he said.”
“It’s still too early to say if fewer new homes will be sold, RL Brown said. New home permits issued in the Valley in January, the latest numbers available, were down just 2 percent from those the month before when there were 4,500 permits. ‘Anecdotally, I don’t think any panic has set in,’ he said.”
Some of the FLorida markets seem to be weaker than PHX.
Here in Southeast Florida it could get ugly quick. As everyone knows we have massively overbuilt up the condo markets in Palm Beach, Broward, and Dade. As far as a the condo markets go, Miami could be ground zero for the implosion. I am not sure we are to Phoenix’s status yet. Don’t they have like 40,000 homes for sale? That is ridiculous, but as we all know there is no bubble.
There are currently 33,800 listings on the MLS in Phoenix for resale. This doesn’t include new construction.
and approximately 5500 units sold in phoenix last month..
This will get ‘em riled but I think Dallas is as bad as Phoenix or Los Angeles.
Arizona is a growth state, and housing is the name of the game. One out of every three dollars of the Arizona economy is Real Estate related according to an article in the Arizona Republic (2004!) . “The results were startling. No other major U.S. city relies as much on the housing industry for its economic well-being.”: http://www.azcentral.com/specials/special50/articles/1121houseintro21.html
Texas has an oil industry.
Right now there’s an Italian fast-food restaurant on the corner of East Main and Power (not bad food at all!!) in Mesa which has a help wanted sign on the window: $10 per hour. My thoughts when I saw it were the local economy can’t be that bad if a fast food joint is offering ten buck an hour to start.
That’s because it’s easier to become a mortgage broker or get a real estate license, and the pay is a tad better.
Arizona has a shortage of low earning workers right now. I hear that the illegals at the day labor spot are demanding $12. But how can you build an economy on that? AZ is buzzing with housing bubble loot, and if it runs dry………
Dallas is a hell of a lot wetter than Phoenix or LA right now.
You can say that again. Bleah. Was on the tarmac at DFW for 4 hours yesterday. (In San Jose today, where it seems just as wet)
Funny bubble video from California Connected - I saw this on my local PBS affiliate today and can’t believe I found it online to show to all of you. It was a MOST entertaining look at California’s real estate situation.
wow, cool vid. things that make you go hmmmm.
Anyone buying a house right now in Phoenix is crazy.
These are my neighbors referred to in Ben’s post. They are going from No. Virginia (reston) to Phoenix. Their house is listed at over 1 million. I have seen 5 or 6 groups go thru the place today. Don’t know what will happen.
Last week a house a few doors down sold in 2 days. A neighbor told me that the buyer had been driving up and down this street for a year looking and would have bought ANYTHING at ANY price on this street. Wish I had known that! Totally diferent picture for condo’s though.
My brother in law and sister are looking. I told them to wait.
Worse than Phoenix!!! Go to Craigslist Phoenix Real Estate and type in “motivated” ooh la la
Like the guy offering an X-type Jaguar on closing…On top of a discount…Now that’s ‘motivated’.
GO GEORGE MASON!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Is that where you went to school?
Grad school (Law).
Hehe! George Mason has plans to build condos/townhouses to rent to faculty. The skyrocketing cost-of-living is causing them to have problems recruiting and retaining quality faculty. I know several faculty who came to GMU 3-5 years ago, and even with their generous performance raises and grants, they admit that they wouldn’t be able to afford to buy their house today.
Not a bad idea. House prices have doubled in the past 3-5yrs. The school, presumably, already owns the land at a very low cost basis.
I assume so. I know that several UC schools have done the same thing (Santa Barbara, Irvine).
Another GMU alumn here…great to see them beat the big boys
I can’t seem to remember the site but inventory has increased tremendously in chicago and has crossed 100k mark for the first time…surprisingly there is no local bubble coverage in the chicago media…I think chicago’s bubble is comparable it may not be as flashy as the west/east coast cities but it is huge!
You’re right. Chicago doesn’t get covered. However, here’s a quote from the Tribune today:
‘if sellers won’t come down to a price you’re comfortable with, and you can wait, you may get a better value in the fall when there are fewer buyers, and the housing bubble could potentially deflate more.’
I don’t know why? When you have such record inventory build up and no one seems to care? It really doesn’t make sense!
I’ve been looking for Chicago bubble news and can barely find anything. But to me, Chicago doesn’t seem THAT affordable. I am planning on moving there in the summer….hopefully the market might start to crack by then, if it is going to and then I’ll wait to buy a house
Chicago doesn’t compare to Phoenix. There are some major elements that put Phoenix at the top of the bubble:
1) Home prices have doubled and average salaries are nowhere near the payscale.(not even compared to Chicago)
2) Transportation. Chicago has mass transit far beyond Phoenix’s capability. Affordable housing in Chicago may be one of the 200 suburbs they have, yet still accesible by mass transit. Phoenix has virtually none in comparison.
“Buyers who can’t sell their current homes in the cooling market are backing out of move-up home purchases. And investors who are worried they bought at the top of the market are also ripping up contracts. Buddy Satterfield, president of Shea Homes’ Arizona division, said the company’s cancellations over the last month are double normal rates.”
The stalling out of move-up buyers who can’t sell their current homes brings to mind one of those 60 car chain-reaction pileups in the Central Valley fog.
That’s the domino effect! All new buyers are scared. Those already committed (many are upside down & won’t be able to sell either) got coaxed out by the teaser loans, flipping, NAR tactics and enthusiasm. This is apparently called “exhaustion”. Next the ARM resets kick in and then its a LONG WAY DOWN with all the defaults inventory and lender mop-ups…
so if they can chisel 2 or more deposits life is good !
get 5 or more and you don’t need to sell anything
Some Courts are requiring return of deposits saying that builder contracts are so one-sided as to be unenforceable. I would have a RE lawyer take a good look at your contract before walking from the deposit.
Here is another funny video
http://video.google.com/videoplay?docid=17228372463843017&q=funny+real+estate
For another funny video Click Here
I wish I had the MLS link to a seller I saw two days ago who put his East Mesa property on the market for $319,000. Property he bought it less than ten months ago for $200,000. I’ll bet he’s “motivated” to take $290.000.
What I can’t understand is with an inventory closing in on 40,000 why home prices have yet to crash? In fact they don’t seem to be falling at all.
http://www.benengebreth.org/housingtracker/location/Arizona/Phoenix/
I know the buzz word around here is waiting toward the end of either 2006 or 2007 to see the price drops. However my feeling is by Dec./2006 the Feds will begin put the brakes on the rate hikes and the real estate agencies will begin pushing, “you’d better buy now before rates start moving upward again!” with the public panicking and buying that line.
Ken,
Phoenix is out of buyers! After borrowing from future demand for the last 5 years the simple fact is either housing prices have to fall, or, price have to stagnate while wages catch up to real estate.
The only other alternative is more crazy financing schemes to push easy money at overpriced real estate resulting in more f@cked borrowers. In time, even though we may see interim spikes, this all levels out because macro-economics always wins out.
There are numerous reasons why prices don’t fall right away, which, has already been thoroughly covered in this blog. Hang tough my man, you’ll be glad you waited!
I agree with you Euphonism, at least to an extent. But I think Ken’s fears of a panick by buyers sitting on the sidelines could spark a buying frenzy sometime in the not so distant future. My wife and I are early babyboomer retirees who are putting the finishing touches on a house lease (6 month) in the Phoenix area. We are relocating to live near our three kids who are in college in Arizona and California and all love most everything about this part of the country. We want to own a house at some point but cannot afford to loose our home equity by buying at the top of the Bubble. We currently live in small town (1500 people) in the upper midwest and are looking forward to warm winters. We know of a number of families in our area that have children in the Phoenix area and are planning on buying retirement homes in the area some day. Many baby boomers in the midwest are quite affluent through their careers, frugality, and even more importantly their future inheritance. Our little town probably has 50 families with net worths in the $1 - $10 million dollar range and many with successful children now looking for retirement homes. Children follow parents and parents follow children to these greener (warmer) pastures. I am the third member of my high school class (1969) to follow this course. I assume this scenario is just beginning and is nationwide in scope. This bubble mess is going to cause midwesterners to think twice about getting into the RE market now. But I am thinking they are watching for a sign that it may be time to buy. Do I have too limited a view of the world from my vantage point? My wife and I don’t want to buy at the top of this bubble but also don’t want to watch our retirement homr go up another $100K while we sit and watch.
I’m a 3rd generation Phoenician.. my family has lived here since my grandfather, who played ball for the GasHouse Gang bought a home here in late 20’s.
There are lots of great things about this area of the country… and lots of not so great things. I applaud your decision to be closer to your children… family is everything and staying close to their lives keeps them close to your heart.
Not all decisions need to be financially motivated, and, in your case, doesn’t sound like it’s the most important factor anyways. Here’s wishing it all turns out well for you!
What makes you think that if you think now is the top of the bubble than in 6 months (based on your rental lease you mentioned) the bubble would have popped and corrected???? IMHO, RE moves slower than the stock market and it took the stock market 2 years to unwind its bubble.
Here is an article by the AZ republic following a couple trying to sell there house while already having a new one built. The amazement of how far ignorance can stretch…
http://www.azcentral.com/arizonarepublic/business/articles/0208morehouses08.html
ZipRealty Price Track:
Price Reduced: 01/19/06 — $463,000 to $449,000
Price Reduced: 02/05/06 — $449,000 to $434,900
Price Reduced: 03/08/06 — $434,900 to $419,000
Days on Market: 129
MLS #: 2434945
To the Bilyks: I want to know if St. Joeseph is helping you with both mortgage payments…
Hope you enjoy
P.S. What bubble??
Ken - go to ziprealty.com and you will find the MLS info that you are looking for on the seller’s house. You will even be able to see the price reduced and how many days its been on the market.
Thanks! Great site!
Zip realty’s site is a perfect example. For those that don’t believe in Phoenix being the head of the class in severley overpriced RE, just look at the average 3/2 homes days on the market and their respective price drops.
A couple of things to consider about the U.S. rates. Even thought yes our rates are being affected by what the Fed does, even after the Fed stops raising rates, IMO the U.S. rates will continue to rise. Why? Because the ECB and now Japan are also now starting to raise rates. And since we have such a huge deficit that requires huge amounts of foreign money just to be serviced, the U.S. rates will always have to have a premium to entice foreigners to buy our IOUs (treasuries). What that means is that with Europe already signaling 4 more increases in rates over the next 12 months and Japan increasing rates for the first time in 5 years, I expect no matter what the Fed does as far as stopping with rates this year, our rates here in the U.S. will continue to rise as the ECB and Japan continue raising their own rates.
We Americans will finally get it that irresponsible deficits DO matter and that there is no free lunch.
PS. I also want to add a few more things about the Phoenix market and why I think it will lead in the housing bubble bursting: First is the hideous traffic situation in Phoenix coupled with the high cost of gas, electricity (due to a scorching hot spring, summer, fall with high oil and gas prices), which amounts to a high cost of living. With the recent 50% increase in housing prices here, salaries have not kept up. So in Phoenix you have a market which has a high cost of living, an increasingly bad quality of life (traffic, pollution, heat), not to mention state taxes (compared to states like Nevada). My forecast calls for a slaughter in the Phoenix market over the next 2-3 years starting as early as this fall. Time will tell.
BTW, forget about the BS about new people moving in helping Phoenix. The people that are moving in are moving in for LOW PAYING JOBs. People that if were priced out of the market a year ago and are now don’t even have a prayer with a 50% price increase over the last year and the increasing interest rates. Not to mention that a hell of a lot of the current listings on the Phoenix market are by greedy agents (many becoming real estate agents during the last year just to avoid paying the 3% premium) that bought 4-6 properties that are currently sitting unnocupied and asking an arm and a leg for. I expect the cost of holding all those properties for this long and not getting buyers at those inflated prices will very soon catch up with them. I expect that will start the market implosion. I just can’t believe how many of those properties I’ve seen in Mesa and Phoenix during the past 3 months. And their numbers keeps increasing at a rate of 2-3% PER WEEK. An implosion is no longer if. It is a matter of when.
If anyone knows the Phoenix local market, or wants to know, Paul has nailed it.
It’s probably out of this thread’s topic,
but it’s a great summary of what caused
this bubble:
Here
guyintucson……….
I am looking at saddlebrooke as prices come down. any thoughts on the area. I am from the Pacific Northwest & have a pal that just bought there.
cswenson@wavecable.com
Chris
It’s probably out of this thread’s topic,
but it’s a great summary of what caused
caused this bubble
Berry…I have seen that website. It is posted BY the N.A. of Real-0-tours….
I am sure the site will go down if prices actually begin to return to affordable levels.(and would show real negative % & losses )
Now that an 80% of the public owns property….and we know a large % own more than 1….The banks are wanting to lend to “illegals”…Available Inventory is rising geometrically…Who is left to buy/ rent these homes….@$2million annaulized growth while home formation remains near 1.3 million? Answer NO ONE…Patience!
Just got back from looking at a friends loan paper work for a house( what a dumb move) anyhow, can someone explaingn this to me. The house is apparaised at 205,000 her payment is 613.14 a month and 11.4% interest rate for 360 months. This makes no sense to me the loan i s a variable with 100% financing from Long Beach Mortgage….how is it possible to have such a cheap not with 11.4 % interest??? for 30 years. She also put 0 down and give 7,500 for closing costs.
Payment Option Arm. I get the interest rate to be 613.14/205,000 * (12months/yr) =3.6%. She’s working on good old-fashioned negative amortization. her principal increases at (11.4%-3.6%)/(12mo/yr)*205,000=$1,300 per month. Lender books this $1,300 as income for the period, and everybody feels good for another 30 days.
excuse my ignorance, but when would the 1,300 kick in as an actual payment?
Presuming there is a 125% neg am cap (the balance can only reach 125% of the original principle, she would have a large increase in payments around month 33 or 35 (depending on if her minimum payments are fixed at 613.14 or rise with the oustanding balance 0.3% of oustanding principle).
You would have to read the Note. The interest rate you have given appears to be the APR on the Truth in Lending document. If so, it is just a guess. There is no way to determine future rates on an ARM, other than the max. and minimum.
Look at the Note to see when the rate adjusts and what the index is and what the caps are (per adjustment and lifetime). You also need to know the “margin” over the index rate. Sounds more complex than it is.
If your friend has the “option” to pay less than the amount required to fully amortize the loan, the result is neg.am. or, in other words, the principal balance on the loan (debt owed) increases each month. Hope this helps.
What is going to happen when this person (inevitably) tries to refinance in month 30 and finds out that the value of the property (most likely) has gone down? How will she come up with the cash to cover the difference between what is financed by a conventional 80/20 loan and the outstanding balance on her loan (which could be as high as $250K)? If the value of the property falls to, say $150K, she could have to come up with as much as $130K! (250 - (150 * .8) = 130)
Isn’t 250K - 150K= 100K? 100K X .8 = 80K. What am I missing?
Neg-am loan goes from 205K to 250K over 30 months. Appraised value goes from 205K to 150K. In 30 months time borrowing rules will be stricter, so she can only get a loan for 80% of the appraised value, which is 80% of 150K = 120K.
250K outstanding - 120K new loan limit = 130K cash needed to re-fi.
How will she come up with the cash? With difficulty.
Alternatively, she could start making full payments, which would not be $1300, not even close. $1300 (actually $1290) is the difference between her payment and the interest.
11.4% per year = 0.95% per month = $2375 per month on a 250K balance. On the initial balance of 205K it would be $1904.75 per month.
I think we have AFB here.
Sorry pal, but your friend is a blazing idiot, and is not qualified to be buying lunch let alone a house. She should skip renting and move in with Mom and Dad, until she cleans up her credit, saves a DP and home prices come down!! Honestly, help her make a better choice.
Easy to explain! Your friend is a dope. Those supplying the funds to the lenders are dopes. This property will be re-sold at auction in 2008 and a lot of people will be licking wounds..
sorry for the typo’s.
Best and Worst Neighborhoods to Buy a Home
This is definitely what I’m seeing in San Diego (better neighborhoods with no/little appreciation in past two years, while working-class ‘hoods appreciate at a steady clip).
OUR WORST NIGHTMARE - THE BUBBLE HAS BURST
shhhh . . . . don’t tell va investor that. Her properties, such as they are, are immune to market forces and besides, she has dozens of HELOC checkbooks to play with! Those aren’t real money or debt, you know! And when she goes out and “buys” distressed properties with them, there will be oodles of people just waiting to pay her 100% more than she paid or rent for untold amounts over their true market value!
I wonder what color the sky is in that world.
Txchick57….can we agree at least to not distort the things I have said in the past. First, I have always agreed that we are at the top of the cycle (I’ve stated my opinion that the peak in No. Virginia was 3/05). I have not bought since 2002, anticipating such a top. I am long-term on my rentals. I am total 20%LTV and positive cash flow.
I have never claimed to be immune to market forces. I have expressed the belief (based on previous cycles) that rents will not decline. I have plenty of dry powder (Helocs, cash,etc.) to pick up some bargains when the time comes.
I have the knowledge and experience to know a deal when I see one. I have stated that I will consider buying when a 20% downpayment results in positive cash flow.
Where you get your statements about selling immediately for 100% profits and renting for “untold amounts over their true market value” are a mystery to me, and I would assume others who read and comprehend my posts.
You have not bought a property in 13 years and are, in fact, afraid to put your toe in the water - from what you have said. You made one offer in the past 13 years; not only at the absolute peak of the market but also in the most overpriced city (Naples, FL) in the country.
These are the facts.
>I have expressed the belief (based on previous cycles)
>that rents will not decline
They already have in some overbuilt markets (I have a SFH rental in one such market). Supply and demand, my friend, supply and demand.
I actually think rents will not PLUMMET.
But don’t hold your breath waiting for them to rise and get ready for some heavy vacancy levels.
Feepness is right about rents: no plummet in rental prices.
But the rental market will head up when the homeowners become divorced from their assets.
Rents will rise, while prices fall. At some point they will meet.
It will depend on the region. In overbuilt areas, rents wont rise, because there will be too much competition. Bankrupt former owners need a place to live, but add their place to the housing stock, zero sum. In areas that are still desirable to attract new tenants, rents could go up when when the RE market crumbles.
So, rents in Phoenix should stay low (lots of soon-to-be-repossessed vacant houses), but rents in the OC may rise more (add some refugees from Riverside County).
BTW, should be add “equity refugees” to the lexicon? An equity nomad has sold a house and made a profit. An equity refugee has been through a RE-related BK.
accroyer
Your friend has an Option ARM. Her payments are based on a 0.5% teaser rate and will adjust after a certain number of payments. The excess interest will accrue to principle and require paydown beginning when they reach either a cap (typically 125% of the orignal loan) or a certain number of payments have passed.
Also that is an insanely high rate (PMMS+550 bps or so). Make sure your friend is aware that her payments will likely adust to $2,000-$2500/mo (or more if they rise) unless interest rates fall from current levels.
Unless your friend is firmly convinced (enough to bet her financial future/retirement on it) that houseprices will appreciate by 20% or more in 5 years AND that her credit will be substantially improved in 5 years, that note is highly likely to lead her to bankruptcy.
My estimate of five years before negative ammortization is over is an estimate based on the typical loan structure. With that high an interest rate the 25% cap (if that is the cap) would probably be reached well before the 5 year limit (if that were the actual limit) were reached.
She just cleared her bankruptcy about a year ago, so that is why her interest rates are high, she has also been evicted about 2 years ago..i’m sitting here shaking my head.
Quite frankly the lenders to her deserve what they get when she will most likely declare bankruptcy again in 3 years. Perhaps then they will have learned not to pass out credit to everyone who can breath in and out successfully long enough to sign the mortgage documents.
No offense to you, I hope you can convince your friend not to sign, although I’m not really sure what she will be losing. The only thing loss would be the potential that credit will essentially be gone for someone in her current position due to reemerging credit standards.
You wouldn’t happen to know who Long Beach will be selling the note to do you? Is long beach mortgage a bank/thrift or a broker? Anyone passing out that type of credit to that type of credit risk isn’t going to survive a flat market much less a downturn.
Dont know who they are selling too. She has this obsession of owning a home..Almost certain that loan will be passed around like a hot potatoe.
And investors who are worried they bought at the top of the market are also ripping up contracts
Excuse me? And how does one just “rip-up” a contract?
Isn’t there a legal term called “performance” in AZ?
Stupid builders musta guaranteed appreciation rates.
>And how does one just “rip-up” a contract?
I think it means that the buyer walks away, but forfeits the deposit. Not exactly “ripping up”, but you get the gist.
On the thread’s topic, barring a natural disaster, I don’t see how any market can be worse than Phoenix: very rapid appreciation, tons of speculators, tons of vacant homes, too much of the economy dependent on growth. At least DC and SD and SF have other economic activities to fall back on.
Of course, one well-placed Cat 5 hurricane could implode the Florida market overnight.
FWIW, listings in my zip (22181) have gone from 73 to 99 in the past month, according to realtor.com Condos and TH have gone from 33 to 44.
Tom - I lived in 22182 for 7 years. Good location. We bought at the peak in fall 1988 in wolftrap woods. Just sold in March 05. We were underwater for about 7 years. We rented it out for years.
umm, what other economic activities do DC and SD have to fall back on?
D.C. has the gov’t and all kinds of defense contractors, etc. Also, we have a heavy Tech presence and also some Bio-tech. That said; in the early 90’s we saw 20-30% declines in SFD homes and up to 40% declines in condo prices.
I did not see any decline in rents. Could be different this time - who knows.
I just sold out of 22180 (closed 1 March). Made 18% in the 2 years I lived there and am estatic to be out. Moved to Texas and bought a home for much less. Between the reduced mortgage and much lower taxes I almost doubled my take-home! Got a 5.125% 30 year to boot!
It would be nice to know the listings totals on a daily basis here in Vancouver. It is so “secretive” in this rregard…
MLS #: 2489284
I mentioned this seller earlier today. He paid $200,000 July/2005 and is asking $319,000! It’s a decent home and the location is o.k. but $319,000??? Come on! The home has just come on the market and it’ll be interesting what it sells for.
Ken -
Thanks for the MLS number. This isn’t too far from where I live - maybe 3-4 miles or so.
That price of $319k is just crazy considering he paid $200k in July of 2005!!!! Looking back, he bought at the very very top of the market (July, 2005) and prices since then have basically done nothing (Month over Month), and have even started to come down some since the summer.
Crazy, just simply crazy!
I am just thankful that my job is not tied into the local economy…
I think a really interesting discussion for a new topic would be which jobs are most at risk, the obvious and not-so-obvious.
Simmssays…
AmericanInventorSpot.com
That home is located in the 85205 Mesa Maricopa and the stats. for the past 30 days show housing prices have risen by 2.1% in that area (according to Zillow).
I work in phoenix and there have been some major plants closings in my field since 2001 (I’m in the printing industry). And right now we are very slow, which I haven’t seen in the four years I’ve been with my current company. There are still undeveloped empy lots sitting in the middle of the city. There are still vacant mini-malls all over the place. I really don’t see what all the talk is about the growth of Phx’s economy. I think it’s all “hot air” and spin by the local media.
realtor.com listings for 86401 kingman az. 1686 today. 1100 on 10/01/2005. about 29,000 population here. hundreds of new empty homes not on the realtor.com list. they are for sale by the builders. rhodes homes grading in golden valley for 33,000 homes. the word is that if they build them the buyers from ca. will come and buy them.
There are 2 new developments in Kingman having there “open house” next weekend. I’m sure they are hoping to have the same success as the 69 home rhodes development that opened at the end of September. All 69 sold out in 4 hours and the area has now become a flippers h*ll. Nearly 1/2 are either for sale or rent. The first ones were completed in December and immediately came on the market at between 80k and 100k more than they originally sold for 2 months before. They are slowly dropping the prices and now most are down 40 to 50K from where they started. Only one I know of has sold. Nearly all the owners are from Las Vegas, Phoenix or Cali.
The development behind our rental has 41 homes on one street, all identical on 4000′ lots. They are having their open house on Saturday. They say they start at 229,900, but only one is the smaller size. The rest start at 299,900.
Nearly every house for sale that I check on the tax records is double what it was a year or two ago. Some are as much as 4 times what they were 2 years ago. Land is as much as 20 times what it was a year or 2 ago. In Golden Valley forty acre parcels that were under 40,000 less than 2 years ago are selling for as much as 2.5 million dollars. Although houses are not selling as fast, land seems to still be selling for ridiculous prices. Ads say “don’t miss this chance, not many parcels left in the area, prices are going up daily”. The realtors insist it will continue to go up, since we are still less than California.
We moved here a year ago to retire. We had been coming here for several years and chose KIngman mainly because we like the small town and the home prices had been under 200,000 for even the most expensive part of town. Imagine our surprise when we actually moved here 6 months after our last trip and found that homes had doubled in less than a year. Now the median on realtor.com is 229,000 and most of the new homes are not listed. Many of the newer houses are 300,000 to 600,000 if you want more than 1300′.
Needless to say, we are renting and trying to figure out plan B.
shari, i too live in kingman and i saw the same adds in todays paper. i moved here in aug05 and am renting waiting for the prices to moderate. when the piti equals the $875.00 rent i will buy. till then i will rent for as long as it takes. one good thing there is no shortage of new homes for rent. the locals here dont even make a wage that will allow them to rent. they live in birdland with 4 travel trailors to a lot. they use extention cords for elec. and garden hoses for water. they need higher paying jobs here before any one can buy.
azrenter - if you want to email me, we can compare notes. I’ve been keeping spread sheets for over a year.
shari “@” cottagerose.com, just remove the quotes
I just drove through Kingman yesterday. Those stats are unbelievable. It looks like a nice little town. But that is it, those people are playing muscal chairs, and they are hoping for a bunch of California idiots to buy speculation homes. Then the builder can skip the town, and live an unoccupied, investor owned city behind. My condolances for those left holding that kind of hot potato.
Any California idiot that buys a house, sight unseen, deserves to lose their A$$.