March 30, 2006

Incentives Offered To ‘Gun-Shy Buyers’ In Phoenix

The Arizona Republic reports on the housing bubble in Phoenix. “Home builders are wheeling and dealing like county-fair carnies trying to win over nervous buyers. They’re offering incentives like free cars or thousands of dollars to knock down closing fees or to put toward flooring, cabinets and other decorative touches for anyone who will buy an unsold house or sign a contract to have one built.”

“Builders now must offer bigger and bigger freebies to keep shoppers coming to the sales office. The biggest discounts are on standing inventory of homes called ’spec,’ or speculative, houses. Builders have more spec homes on their hands as buyers back out of contracts, many because they can’t sell their existing homes.”

“There’s even more pressure right now for publicly held builders to book sales. The end of March marks the close of the fiscal year for some of them, and they want their annual numbers to look good to Wall Street.”

“‘This is proof that the market has turned from a sellers’ market to a buyers’ market,’ said RL Brown, a home-building analyst.” “In February, Scott Communities began offering a Honda Civic, Honda Element or $15,000 off the base price of a home. Another home builder was selling a completed spec home with such upgrades as granite counter tops, for $386,000, while the base price of the home in the builder’s brochure was $415,000.”

“Incentives give builders a way to cut prices without actually reducing the base cost of their homes. Earlier customers could be upset to learn that the base price of the model they bought months ago now has fallen several thousand dollars because the builder miscalculated the market. Offering incentives is ‘better than having a crisis of dramatic oversupply,’ said (broker) John Foltz. ‘It helps to protect neighborhoods pricewise by making adjustments gradually. The worst thing they could do is not recognize a change in the market and let gross oversupply produce a fire sale later on.’”

“Even with incentives, consumers are being very cautious, said Margie O’Campo de Castillo, a broker who represents buyers seeking new and existing homes. ‘The incentives help, but I don’t see people jumping up and saying, ‘Let’s go buy,” she said. ‘Right now, there’s a lot of gun-shy buyers.’”

RSS feed | Trackback URI


Comment by Ben Jones
2006-03-30 09:21:02

‘It helps to protect neighborhoods pricewise by making adjustments gradually. The worst thing they could do is not recognize a change in the market and let gross oversupply produce a fire sale later on.’

The price of homes in Phoenix is too high, so the best these folks can do is try to manage the supply. BTW, there is a bill in the Arizona legislature to continue the slow, doling out of the millions of acres at inflated prices. It is being done in the name of conservation, but 275 square miles are within 35 miles of downtown Phoenix.

Comment by TRich
2006-03-30 09:30:04

Someone should approach a flipper selling a house (let’s say for 450k) they bought back in August of 2005 for 400k and ask them if they can throw in a Honda Element, Civic, and what the heck, an Odyssey for good measure. And then in return you’ll give them what the same house would have cost mid-way through the Phoenix boom, probably around 275k (ballpark).

The guy will probably balk, but he’ll coming back to you on his knees begging for your offer a year from now.

At which point I’d ask “is Pamela Anderson also living somewhere in the development.”

Comment by euphonism
2006-03-30 09:31:39

The big Anthem project east of Phoenix out toward Florence shows signs of dramtically slowing down.

All the homebuilders east of Gilbert, including the town of Queen Creek are finding themselves with new homes sitting.

Nobody can commute into Phoenix from these bedroom communities in the east valley unless they want to sign up for a 90+ minute of drive time.

Seems the big developers that didn’t want to pay for road infrastructure improvements and the bonehead city planners who didn’t have the balls to demand it have now painted themselves in a corner.

A popping bubble AND no way for their homeowners to drive from their nice homes to civilization and back again in the evening.


Comment by fred hooper
2006-03-30 09:36:52

“The big Anthem project east of Phoenix out toward Florence shows signs of dramtically slowing down.”
Anthem is 20 miles north of phoenix off I17. The scraped up a lot of beautiful desert. That’s the name of the game here. Scrape, Rape and leave the mess for the locals..

Comment by fred hooper
2006-03-30 09:47:22

You’re thinking of the Verrado development. That’s a real mess, coming in from LA on I10. Two lane freeway with no plans on the books for 10 years. A friggin mess. Phoenix sucks big time. Don’t know how I’ve put up with it for 25 years.

Comment by AZgolfer
2006-03-30 09:53:22

They want a ton of money for those Verrado houses. The golf course is really nice but the commute into Phoenix is ugly.

(Comments wont nest below this level)
Comment by pazzo
2006-03-30 20:30:46

Buckeye Town council has been rubber stamping 360 acre developments as fast as they are losing teeth over the last 5 years. Now the incorporated boundaries cover almost 240 square miles. These nutless council people have no clue to the transportation problems. As far as Verrado goes, it is Buckeye’s bank account to fund their stupid lake project in the biggest drought since the Anasazi left Arizona.

(Comments wont nest below this level)
Comment by euphonism
2006-03-30 11:14:18

Come on guys!

I’m talking about the second anthem being built by Del Webb out by Florence!

My family’s lived in the valley since 1920… I think I got my bearings on all the major development projects.

As a side note: There is now over 600 homes for resale in the original anthem. The commute up I-17 is a real bitch!

Comment by AZtumbleweeds
2006-03-30 13:14:01

Anthem is planning another community in Benson, AZ hoping it will be a bedroom community for Tucson and Sierra Vista. It’s just incredible. Hope this link works.

(Comments wont nest below this level)
Comment by Arizzzona
2006-03-30 16:03:06

Unbelievable. Is anywhere safe?

Benson — 5 to 30.

I guess in AZ if there is private land, look out - and even if not (State land) it’s potentially at risk, too, especially around major urban areas.

(FWIW, the state is 15% private land)

(Comments wont nest below this level)
Comment by euphonism
2006-03-30 11:19:26

Here is the website link for the “really?” crowd.

Comment by euphonism
2006-03-30 11:20:39

This blog isn’t intuitive for pasting links. Did this work?

Comment by Ben Jones
2006-03-30 09:40:48

That’s a good summary of the infrastructure mess. A lot of short-sightedness has gone on in this boom.

Comment by scdave
2006-03-30 09:54:14

DITTO in the Roseville/Lincoln area in California….

Comment by cereal
2006-03-30 09:54:13

throw in $67/barrel oil just for laughs.

can you say ‘road rage’?

Comment by fred hooper
2006-03-30 09:55:55

Can you say $100/barrel oil?

Comment by turnoutthelights
2006-03-30 10:04:34

Can you say Peak Oil, and its ever higher prices. That 10% forever RE appreciation will simply shift - to gasoline.

(Comments wont nest below this level)
Comment by fred hooper
2006-03-30 10:08:50

Long on gold, short builders. Whoopie!!! :)

Comment by Robin
2006-03-30 20:19:07

Escalate the

Comment by euphonism
2006-03-30 20:50:00


Comment by OutofSanDiego
2006-03-31 03:59:51

For some reason I started tracking inventory in one particular Phoenix area zip code back on 2 Feb. The zip includes the Anthem and Tramonto developments north of Phoenix up I-17. Mainly because the increase on a daily basis has been so remarkable, I’ve kept it up. Here is a weekly synopsis to illustrate:
2/2 - 644
2/14 - 704
2/21 - 714
2/27 - 730
3/13 - 791
3/17 - 815
3/23 - 838
3/30 - 865
I have found these numbers pretty spetacular, especially since it doesn’t include FSBOs. The speculators must be crapping their pants looking at what is developing. It will be interesting to watch as the temperatures start rising in a few months. I would think sales will slow when temps are around 110 degrees…at that point these homes look even more bleak.

Comment by Salinasron
2006-03-30 09:47:25

” John Foltz. ‘It helps to protect neighborhoods pricewise by making adjustments gradually.”

For how long? Until the builder unloads? After July these adjustments won’t be gradual, they’ll be in full retreat.

“The biggest discounts are on standing inventory of homes called ’spec,’ or speculative, houses.”

And why not? Any buyers of these houses usually don’t have choice of counters, tile, carpet, wall color, etc, so why not expect more compensation.

Comment by John in VA
2006-03-30 09:48:34

A builder in knew in the St. Louis area told me that in the 80’s he was building in a new development with several other builders. Almost overnight, the market - and the builders - went bust. For years the development was a scarred landscape of a few completed homes, abandoned foundations, empty holes in the ground, and weed-filled lots. On some streets, there was only one occupied home.

Comment by fred hooper
2006-03-30 09:54:20

Are you talking Phoenix? Sounds like it. I remember it took years for the Arrowhead Ranch area to build out. Frames and foundations stood for years, right on the Arrowhead golf course.

Comment by OutofSanDiego
2006-03-31 04:10:13

Same as the Estrella Mountain Ranch development. I think it is beautiful, however the same thing happened. I stopped by there in July 2003, about 18 months before the Phoenix area bubble took off. The project had started about 10 years earlier or so and had gone bust. A new developer had taken over and though things were nice it was still pretty cheap in 03. Resale lots in the “Reserve” section for custom homes were undercutting the new developer price and could be had for 55K. Boy I didn’t anticipate the bubble hitting as hard as it did. Those lots are up to 200K now and the production development homes are full of speculators.

Comment by AZgolfer
2006-03-30 09:50:41

Hi from Phoenix. There are now 4 or 5 houses in my small neighborhood for sale. The house next door to mine started at 268k then 258k then 250k then 245K. Sold after 4 or 5 months for 243K. Someone bought another house for 230K just a couple of months ago and put tile in it. Started at 289K then 279K now 268K still on the market. The first MLS listing said “hurry and buy this one before the price goes up” Another house, same floor plan as mine, started at 265K now reduced to 255K. I paid 85K for my house in 1993.

The price reduction are coming very quickly, at least in my small (155 houses) subdivision in Peoria.

Comment by cereal
2006-03-30 10:08:45

sometimes even the keenest bloggers get wrapped up in thinking some event will signal the downturn of the market. maybe we should open our eyes and realize it’s already happening.

good job AZ, keep us posted

Comment by pazzo
2006-03-30 20:58:42

I have 15 houses for sale/lease (signs in front) in my 70 home subdivison. Of the 15, 10 are california owners. 17 of 70 are owned by RE companies. ALL 15, have been vacant since they were built 1.5 years ago, except 1.

Total number of owners from california…21 of 70

Not one house has been sold here in the last year. Most have been listed for over a year. Listed prices are 225k to 245k.

I am glad I rent…

Comment by OutofSanDiego
2006-03-31 04:12:36

Excellent number tracking. I think this illustrates what most new home developements all over Phoenix are experiencing.

Comment by Salinasron
2006-03-30 09:51:45

I find it interesting that I am getting unsolicited job offers from FLorida, Georgia, Arizona.
The latest is from Yavapai Regional Medical Center in Prescott, Arizona. Now I do like that area but timing is not right.They claim to be offering attractive sign-on and relocation bonuses.

Comment by Mo Money
2006-03-30 10:25:55

Take the job and rent !!!!

Comment by Housing Wizard
2006-03-30 10:51:40

I had a house in Prescott once . Nice nice area ….but somebody said that lately it got over crowded and went up 35% in 2005 .

Comment by Larry Littlefield
2006-03-30 09:53:53

(Almost overnight, the market - and the builders - went bust. For years the development was a scarred landscape of a few completed homes, abandoned foundations, empty holes in the ground, and weed-filled lots.)

In the 1980s, the market in New York was so hot that builders were using zoning loopholes to construct 13 foot wide rowhouses on Staten Island, and selling them to desperate middle-income buyers. The middle room on the top floor had a skylight, which leaked.

Whole rows of these things sat finished but abandoned. They were eventually demolised to make way for single-family homes, as their value had fallen to that of the land they sat on.

Comment by santacruzsux
2006-03-30 09:58:31

Anybody that buys a house in the next six months is mentally incompetent. That’s PC for “retarded” if you needed to know.
This will be all out slaugher of the ignorami (I like that term better since ignoramuses can spell it) for not being able to understand the difference between price and value. As most here would agree a house has value in terms of primarily sheltering ability and secondarily, location. Tertiary values could be ugly granite countertops or crappy hardwood floors. Price is what someone will give you in terms of a monetary amount for the privilege of moving into you’re home. Because of this lack of understanding I believe that if the blame game begins, then primarily the institutions that allowed the massive amount of credit creation to inflate this bubble should have the most fingers pointed at them.
You may disagree,but the comparison I like to use, is the example of the lab rat and cocaine experiment. Put a rat in the cage and give him button to push and drugs are supplied; the poor little rat will push that button until he dies. Am I equating interest only homeowners with lab rats and lenders/Realtors with sadistic freaky scientists? Damn straight, because I honestly believe that most people in the country/world are too damn stupid to understand the consequences of their actions. That is why we have a criminal justice system, not to forgive their stupidity but to punish it. Have pity for the ignorami, they’re gonna need it, as economic reality wreaks its revenge.

Did I sound bitter?

Comment by turnoutthelights
2006-03-30 10:08:08

Bitterly realistic.

Comment by cereal
2006-03-30 10:12:16

i’d rather be the rat.

Comment by Jim
2006-03-30 10:13:59

Hey Santa, What’s with trashing the lab rats! They don’t have I/O’s and flex arms, not that they wouldn’t qualify….

Comment by santacruzsux
2006-03-30 10:50:39

Lol! No doubt that lenders may come up with a special lab rat lending program for disadvantaged species.

Comment by Housing Wizard
2006-03-30 11:01:28

Hey santacruzsux , you hit it on the nail ….also made me laugh …but it really isn’t a laughing matter . Those poor
people in the hands of slick operators .If the realtors told them the truth about all the market conditions and risks ,they would not buy now ,(unless they found something really cheap).Enjoyed your vision of what is really happening however.

(Comments wont nest below this level)
Comment by SidneyPrice
2006-03-30 11:01:11

Hey! granite countertops are nice! I have one in my apartment. Great surface for the cutting board.

Comment by OutofSanDiego
2006-03-31 04:04:45

Great comments. I truly agree that the MAJORITY of people are either plain stupid or lack common sense (education does not equal being smart. I know plenty of people up through the doctorate level of education who are making the same financial mistakes as completely uneducated folks). What really scares me is that in our great democracy, the idiot with a 55 IQ or the slacker on welfare has the same vote that I do. There should be some minimum level competency to “earn” the right to vote. I am really scared about the future of our country.

Comment by azdan
2006-03-30 10:11:54

The commuting issue is often mentioned, but I believe still does not get its due. Anthem is a perfect example. As mentioned, it is 20 miles North of Phoenix and the ONLY way into Phoenix from there is on I-17. Talk about a parking lot. The folks I’ve talked to get chills when the subject comes up.

Comment by Lars
2006-03-30 10:28:43

I hate everything about Anthem. Pod People at it’s finest. Everyone looks the same, drives the same cars, have kids with the same names, live in identical looking houses and so many of them are amatuer real estate investors.

Traffic on I17 north of Deer Valley now sees bumper to bumper traffic even on weekends. Once you get past Anthem it lets up.

Comment by PontiacMI
2006-03-30 11:40:19

I believe the song went…

… and they’re all made out of ticky-tacky and they all look just the same.

Comment by azdan
2006-03-30 11:52:04


The Podsters. Boy, did you nail it! The 102 IQ crowd who think those extra 2 points matter.

Comment by Getstucco
2006-03-30 10:12:17

OT, but are the commodities and l-t T-bond markets losing faith in BB’s resolve to stay the course on rate hikes? Regardless, it is clear that crushingly high mortgage interest rates are on the way…

Gold, silver at multi-decade highs
By Myra P. Saefong, MarketWatch
Last Update: 12:33 PM ET Mar 30, 2006

Rates roll broadly higher
Fed hike pushes short-term rates the most
By Steve Kerch, MarketWatch
Last Update: 11:37 AM ET Mar 30, 2006

30-yr T-bond yield rocketing upwards:

Comment by Walt
2006-03-30 10:13:06
Comment by AZgolfer
2006-03-30 10:26:26

Before I found this blog and other information I came close to buying a house. The realators are good at getting emotions involved.

Comment by sfv_hopeful
2006-03-30 10:27:27

IMO, the act of actually buying a house now, isn’t bad in and of itself. It’s the insane price of homes…who of us wouldn’t jump on a chance to buy the right house -even now- for 50-60% of list? Everything else being equal, $147K home on a $42,000 salary still makes a HELUVA lot more sense than the typical SoCal $600K on a $60,000 salary….which isn’t to say that he could have gotten it for much less had he waited, but my point is he is far from being the biggest FB.

Comment by Walt
2006-03-30 10:34:40

Knowing St Petersburg and judging by the size of the “condo”, I believe he bought a converted apartment. Apartments in St Pete are absolute crap!

Comment by Salinasron
2006-03-30 10:23:28

To santacruzsux,

Today at 1.00 pm on 1080 am you get to hear on of the biggest RE supporters in Santa Cruz and San Jose. Last week he said that he had multiple offers on all his listings.”, Robert Aldana”. What is he smoking or what are the buyers smoking?

Comment by santacruzsux
2006-03-30 11:22:09

Well if you know Santa Cruz, then what they are smoking is usually green and sold in fractions of an ounce. Santa Cruz is still kind of hot RE wise, but rent equivalents are still way out of whack. Just peruse the classifieds in the santacruz sentinel and see what you can get for$1600-$2000 mo. The folks buying now have to either be betting on continued appreciation or want to stay in Santa Cruz for a long long time. Just my two cents.

Does anyone have the cent symbol on their keyboard?

Comment by Melody
2006-03-30 11:38:35

alt 0162

Comment by mina
2006-03-30 13:00:35

or, you can say “just my $0.02″

(Comments wont nest below this level)
Comment by ajh
2006-03-31 00:59:37

¢ £ €

I learn something on this blog every day :D :D

(Comments wont nest below this level)
Comment by CA renter
2006-03-31 01:43:57


Comment by Baldy
2006-03-30 10:24:49

Pittsburgh: Congressman Upset PNC Bank Becoming RE Developer

The bank plans to invest $122 million in the new complex adjacent to its headquarters along Fifth Avenue, consisting of 158 hotel rooms, 32 condominiums and 360,000 square feet of offices to be anchored by the Reed Smith law firm. PNC’s plan to occupy only about 25 percent of the office space and rent or sell the other 75 percent do not mean PNC is “engaging in broad-based real estate development activities,” Dugan’s letter said. He could not be reached for comment yesterday. “The project is an extension of our Downtown campus, and we have consistently stated that PNC is not in the real estate development business,” said Darcel Kimble, a PNC spokeswoman.

I met Barney Frank…

Comment by dreaming 07
2006-03-30 10:24:55

I just noticed that Pulte has started offering a free swimming pool package with a purchase of a home in Vail (Tucson area) AZ. These homes started at $250K about 18 months ago and this Phase II (which has been on sale a loooong time) start at $350K.

Comment by OutofSanDiego
2006-03-31 04:41:36

I have to check that out. I visited the development in late 03 and again two years later last summer (Rincon Trails or something like that) and it’s nice, but there is absolutely no infrastructure in “Vail” other than a gas station mini-mart and a post office, along with the school. You have to pass the trailer homes after turning off the interstate to get to the development.

Comment by Baldy
2006-03-30 10:27:38

Sorry, that was OT. Rhetorical ?: Isn’t another word for “incentives,” discounts or price reductions? I hope people can see through this.

Comment by bubble butt
2006-03-30 10:27:38

OT, but anyone notice bonds falling again due to revised GDP numbers. More pain for ARM borrowers and credit cards coming.

No way BB isnt going to hold off on raising rates next meeting.

Comment by Getstucco
2006-03-30 10:36:56

How can he hold off on raising rates if the long bond yield is going through the roof? Look what happened to Volcker’s predecessor if you want to see the problem there…

Comment by cereal
2006-03-30 10:53:50

not with oil misbehaving.

to the moon alice

Comment by miamirenter
2006-03-30 10:29:35

look at that 10yr bond @4.88…closing on the 2004 high of 4.9..looks like a breakout…and nothing like a sweating seller looking at those numbers.

Comment by Breck
2006-03-30 10:33:02

Most people do not understand mortgage rates and their connection to the 10yr. If you took a poll, probably 60% of the people think interest is something charged by the government. You hear quite frequently about how “Bush” is “raising our rates”.

Comment by Getstucco
2006-03-30 10:38:20

Bush doesn’t know who raises interest rates either. Somebody must be doing it, though (intelligent design, y’know…).

Comment by destinsm
2006-03-30 10:44:14

Treasurys sell off after revised GDP
10-year yield is approaching an almost 4-yr high

Comment by crispy&cole
2006-03-30 10:47:29

Looks like our guys over at PIMCO were WRONG!

Comment by tauceti96
2006-03-30 10:52:45

This statement is interesting:

“These numbers today, plus the comments by the Fed, are still pointing to more increases by the Federal Open Market Committee in the coming months,” said Kevin Giddis, managing director of fixed income at Morgan Keegan.
“I continue to be surprised and impressed by the U.S. economy. Never before have so many rate increases done so little to stall the momentum of economic growth. Either they (the Fed) are really, really right or we are in for one heck of a recession when these increases find their mark on the economy,” Giddis said.

They’re admitting the truth from their own mouths but refusing to draw a line from point A to B. Its called a depression, for the love of God quit spinning it.

Comment by death_spiral
2006-03-30 10:30:20

Why don’t the HB’s just offer the buyers $5000 toward their BK 6 months down the road?

Comment by Housing Wizard
2006-03-30 11:05:46

The builders should start a BK fund .

Comment by Baldy
2006-03-30 10:32:59

I was thinking who would live in a desert, but remembered a new development here on a slag heap… (A byproduct of steel mfg)

Comment by Salinasron
2006-03-30 10:34:37

Check out these listings in Santa Cruz-San Jose area. Note that he gives something like three new listings and then a whole host of sold listings to help keep a buyer frenzy going. Maybe santacruzsux can add some input here. Link:

Comment by Salinasron
2006-03-30 10:35:16

Here is the URL. (

Comment by santacruzsux
2006-03-30 11:57:17

Well I just checked his page and according to my sources the last house he sold was the Silva property back on 1/23/2006.
Go down four listings to Tony Ave and that was sold on 7/8/2005.
Go down 13 listings to 1037 Vine and that was sold 3/24/2004 for $400,000. The estimate now is $600,000.

Now if this guy has been selling 10 properties a year (if he actually is responsible for closing all those deals) he’s been doing pretty well for himself. It is completely understandable that he would not want his gigantic bloated cash cow to get a case of foot and mouth disease let mad cow!
I’m sorry to say that anyone that want to live at 1037 Vine (1000 sqft ) in downtown San Jose is absolutely freaking INSANE! These places were going in the high 100’s in the late nineties and nobody was touching those crapshacks!

But from the looks of his site, his sales have gone down a good bit in the last 6 months.

Comment by Mo Money
2006-03-30 12:22:53

This guy isn’t typical of Agents in the area. He’s been around a long time and has a cable TV show (don’t know if he pays for it or not but probably) to get his name out.

Comment by miamirenter
2006-03-30 10:37:18

Jim Gillespie, CEO of Coldwell Banker, says, “For every 1 percent rise in mortgage rates, 250,000 to 300,000 buyers are priced out of the market.”

Comment by crispy&cole
2006-03-30 10:43:13

Add in the real increases from the “true” inflation (homes prices, medical care, commodity prices, etc…) and the soon to be increases in real estate related Unemployemnt and BOOM 1,000,000 buyers will be priced out.

Comment by climber
2006-03-30 11:41:38

How about for every 1% raise in interest rates house prices have to come down by an eaual% to remain equally affordable? (i.e. from 6% to 7% interest rate is a 17% increase in interest) For rates to go from 5% to 10% is a 100% increase, house prices would have to be cut in half just to have equal affordability for the 0% down payment crowd.

Comment by Brad
2006-03-30 11:00:01

meltdown time. Pheonix area just went over the 40,000 inventory number, and by a lot. 40,176.

Comment by Housing Wizard
2006-03-30 11:09:10

Its going up more ….55,000 by June I bet .

Comment by cereal
2006-03-30 11:33:48

guys, phoenix is over 40. pause and contemplate

Comment by euphonism
2006-03-30 12:14:12

don’t pause…menopause

Comment by Mo Money
2006-03-30 12:26:25

Think the sellers are reaching for the bottle of Bubble Midol yet ? Helps with the bloated prices and reduces buyers fatigue ……

(Comments wont nest below this level)
Comment by Simmssays
2006-03-30 11:03:33

I’ve been waiting for the Phoenix number to reach 40,000. For me, that’s the no more denial number. Now, onto 50,000? What percentage of the houses in the Phoenix market would that be. Anyone know?


Comment by scdave
2006-03-30 11:29:55

I would like to know that also….AZgolfer may be able to find out…

Comment by AZgolfer
2006-03-30 12:09:31

I have a realator friend I keep in touch with here in Phoenix. I can check with her on the percentage. I think when the subject of 14,000 empty homes came up, someone said that it was only 3 or 4% of the total homes in Phoenix. I think the best resource is Catherine who is a realator in Prescott. Catherine, are you out there?

Comment by pazzo
2006-03-30 21:20:08

This doesn’t include new home sales…

Comment by Left LA Behind
2006-03-30 11:06:35

Incentives Offered To ‘Gun-Shy Buyers’ In Phoenix

Simple comment : With the barrel of the gun lodged neatly in my proverbial financial mouth, I would not pull the trigger, either.

Comment by Simmssays
2006-03-30 11:26:14

I think the raw numbers though helpful are not as helpful as knowig what percentage of the houses in Phoenix it represents, and what percentage on average are on the market at any one time. Does anyone have this type of infor?


Comment by cactuscody
2006-03-30 11:36:43

I read an article the other day about deliquent mortgages. They claimed most people have trouble in the 3rd and 4th years. Let’s see the Phoenix time bomb started ticking in ‘04 imo. That puts the ‘07 as the beginning of woes for the wanna bees. Until then watch them sweat as APS jacks rates 20%.

Comment by azfamdeals1
2006-03-30 11:48:48

Phoenix, AZ : “There is no there, there”.

Comment by Mo Money
2006-03-30 12:31:19

now, now, PHX zoo, Botanical Garden, Tempe Mill Street, Golf Galore, Papago Park. Nice area, too bad the damn flippers came in and ruined it. Hopefully it will regress enough for locals to buy again without liar loans.

Comment by John in LA
2006-03-30 12:28:32

Ben - comments aren’t nesting

Comment by euphonism
2006-03-30 12:47:18

nest this!

Comment by John in LA
2006-03-30 12:39:26

Phoenix = Maricopa and Pinal counties

Total housing units (2000) (includes rentals and unoccupied)

Maricopa 1,250,231
Pinal 81,154

Total: 1,331,385

40,000 equals just about 3% of total

If rentals are excluded (approx 380k), 40,000 is about 4% of total


P.S. Ben - comments entered as “reply” aren’t nexting. I tried 3x and gave up, decided just to post at end.

Comment by sellhighbuylow
2006-03-30 14:37:51


Comment by Getstucco
2006-03-30 12:47:24

“Offering incentives is ‘better than having a crisis of dramatic oversupply,’ said (broker) John Foltz. ‘It helps to protect neighborhoods pricewise by making adjustments gradually. The worst thing they could do is not recognize a change in the market and let gross oversupply produce a fire sale later on.’”

It also helps protect sellers of new homes volume-wise through a little bit of legal deception which any economist can readily spot — the sale price they book roughly exceeds the market value of the home by the value of the incentive they use to sell it ($15K for a Honda, or whatever). My guess is that this will tend to give builders a big marketing advantage over the untutored sellers of used homes, as the latter will mistakenly take the published sales price of new homes as the comp off which they base their list price, then henceforth continually wonder why they cannot sell.

P.S. The marketing advantage of new home sellers over used home sellers shows up strongly in recent OC data (February?).

Comment by Mo Money
2006-03-30 13:16:01

I wonder what the tax implications are for these incentives ? Seems if you are being given a Car you pay gift taxes on it ?

Comment by peterbob
2006-03-30 13:24:39

The value to the buyer of the incentives is generally less than the incentive price. For example, if the homebuilder gives away a home with $10K in hardwood floors, they generally cannot charge an extra $10K for the home, because many people would prefer to have another incentive, like a finished basement, for example.

This might be particularly relevant to the existing home seller. If they include a $15K Honda along with the house, the buyer might say “thanks, but I really wanted a Nissan, so you’ll I’ll only pay a purchase price of $10K more than original.”

Name (required)
E-mail (required - never shown publicly)
Your Comment (smaller size | larger size)
You may use <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong> in your comment.

Trackback responses to this post