‘It Is Summer Or Bust’ For Arizona Housing Bubble
The Arizona press reacts to the April numbers and has some additional information. “The number of houses sold last month isn’t very encouraging. At the same time, the number of single-family homes for sale reached what could be a record of 14,782 last month in the Southeast Valley, according to the Arizona Regional Multiple Listing Service. The MLS said there were only 2,402 single-family homes sold.”
“People don’t seem to be getting the message that it’s a difficult time to sell. ‘More houses are going on the market quicker than we are selling them,’ said Trent Powell, a Mesa Realtor.”
“Powell is also optimistic. He said that during spring break sales picked up dramatically and he sold four houses in the week. ‘I just got a flood of calls, but it died right after,’ he said. ‘September will be dead. I am really hoping for summer. It is summer or bust,’ Powell said.”
“Tempe Realtor Craig Akers advises sellers to be patient, to clean up and de-clutter their houses and to be optimistic. ‘There’s lots of doom and gloom out there and I am not sure it is warranted,’ he said.”
“The median prices continue to rise, but Jay Butler said that is because people are moving up and buying more expensive houses. In Ahwatukee Foothills, for example, median prices reached $385,000. Its still too soon to tell if the market is in a swoon, said Butler. Butler said there is increasing concern about the ability of some homeowners to make mortgage payments, especially those that have used some of the more creative financing instruments.”
“‘A lot of people with home equity loans or short-term adjustables are going to see an increase in monthly payments,’ he said. ‘For a lot of these, the reason they have them is in order for them to qualify for the home so they may have been marginal people in the first place.’”
“For many buyers during the last few years, town homes and condominiums have been a better option. But sales activity followed a pattern similar to the single family home market with a decrease from 1,750 sales in March to 1,390 in April, which also was well below the 1,670 sales of April 2005.”
“A hotel on North Central Avenue in Phoenix will be knocked down to make way for condominiums in the increasingly competitive midtown market. The Holiday Inn will be razed to clear a spot for three five-story condo buildings. (Developer) Wade Kempton said he expects residents to begin moving into the planned 257 condos late next year.”
“Affordability is a key issue in metropolitan Phoenix housing in general and especially in the area’s fledgling condo market. Condos have become an alternative to the starter home. But so many condo projects aim for the affluent buyer. If the prices aren’t in the millions, many of the high-rise towers are asking for several hundred thousand dollars as the entry point, matching or exceeding prices for typical single-family homes in the Valley.”
“Some analysts think there are too many condo projects in the works, especially those on the most-expensive side of the ledger. They say the market is unproven in a city where the single-family home has been king. (Consultant) RL Brown said there will be some condo projects that will succeed as workforce housing, although ‘no one is positioning downtown condos for the workforce that needs them.”
“‘The easiest thing to do in this town is issue a press release about your high-rise condo,’ said Brown. ‘There’s nowhere near the demand for expensive downtown condos for the supply that has been proposed.’”
Someone posted earlier today that Phoenix listings went over 45k on some internet databases. It’s not just overly-expensive condos that are being built. In Flagstaff, new homes are being offered around $400k, when the average pay is about $11/ per hour. Last week, another 1,500 homes were proposed by Flagstaff developers, even as many flipper properties languish in the for sale on the MLS.
This summer will likely be the big test, as the realtor said.
I am really hoping for summer. It is summer or bust,’ Powell said.”
_________________________
Its Fall or bust!
Its Next Super Bowl or bust!
They will continue the optomism of a salesperson. Every salesperson thinks “This will be the month”.
All I can say is “Oh Great Pumpkin where are you?!?!?”
Bust, sez I.
I am really hoping for summer. It is summer or bust,’ Powell said.”
It is clear to me that Mr. Powell is one of the thousands of Arizona RE speculators who will be left holding the bag come Fall.
Here’s to hoping.
Maybe a local can let us know if the summer is really such a good time to be driving around the valley, getting in and out of a car. Whatever happened to the spring rush?
sure, summer’s a great time to house hunt. At least at 3a.m. it is, cause it’ll only be about 75F. Unless they can back it up with historical data, I believe that the comment proves beyond a reasonable doubt they’ve been using psychoactive pharmaceuticals.
There is a reason why most RE agencies do not require a drug test for employment
I have spent a lot of time in PHX during the summer, getting in and out of blazing hot cars and it’s something you’d rather not do. Getting burnt on the steering wheel while sweating bullets is no fun.
But it’s a dry heat.
From the Tucson sales statistics, it looks as though May has historically been the strongest month, with June and July being pretty strong too, in spite of the heat.
Phoenix can’t be much different from that, although it’s hotter up there in the Valley.
But this year could be different! I don’t anticipate any kind of sales surge, to clear those huge inventories - why should there be?
The price and days-on-market statistics we see are for houses sold, in an unbalanced market with huge over-supply. Sooner or later, all those hopeful folk trying to sell will get to realize that if they want to sell, they need to see the power of pricing.
If these are #’s for closed sales, i.e. numbers from DataQuick, etc., then they are for contracts signed 1-2 mos prior. So that would mean Mar, Apr, May = most active selling mos (as opposed to May, Jun, Jul).
that guy had it right about spring break…there was a semi-flurry of activity, but it died almost instantly…it lasted 2 weeks at best. Summer in Phx will not see this big ol’ rush many forecast…tourism is down in summer (as usual, except for the locals who bag great hotels at cheap prices for wknd fun) and will be even worse because of extreme fire restrictions being put in place now by Forest Service, BLM, etc.
I think the summer season is over before it even begins in Phx…the realtors will keep hoping and saying dumb stuff, like..”whoa, wait ’til those Californians get here with their bags of money” but in reality, the best hope for a bounce has passed for AZ.
I was looking at homes for sale in Phoenix. There are so many McMansions! I wonder how much they cost to cool in the summer?
I have a 1600 square foot condo that I rent. Standard 3 bedroom, 2 bath. My average summer electric bill usually peaks around 250 per month. Now, tack on another 1 or 2k sq. foot, with about 40 - 60% of your walls having huge windows with “beautiful views”. Given, since they’re newer, we can probably shave a bit off of their bill, but 300 - 400 per month wouldn’t surprise me.
Summer time is usually dead in Phoenix as the temperature reaches $115+. Any realtor who says it’s summer or bust has never lived in Phoenix or He is just a complete idiot moron. Spring is the big season for Phoenix and it has already been a bust.
Summer time is usually dead in Phoenix as the temperature reaches $115+. Any realtor who says it’s summer or bust has never lived in Phoenix or He is just a complete idiot moron. Spring is the big season for Phoenix and it has already been a bust.
(sorry for the repeat; replied to the wrong guy
One day of rain in the last 5 months…nobody’s goin’ nowhere this summer. We had our first 100 degree day yesterday and don’t expect to see double digits until October. House hunting is going to be the last thing on people’s minds. All the potential buyers have flown the coop to cooler climes. Maybe we’ll have a Christmas rush.
Death of a salesman : )
Santa Claus, anyone?
I guess all the houses are for retirees. The locals can live in trailer parks or apartments. ONly thing that makes sense.
I can’t figure out the condos though. Who wants to live in multi-story condo, especially one that costs as much as a house with more square feet than the condo?? I thought Arizona was about being outside, at least when it’s not 110, enjoying the clean air.
“at least when it’s not 110, enjoying the clean air.”
I hate to break it to you, but the clean air here died about 5 years ago.
“I am really hoping for summer. It is summer or bust”
Hmmm…where have I seen something like that before. Oh yeah, it was the “just wait til after the Super Bowl … that’s when activity will soar” excuse. Then it was the “just wait till spring, a.k.a. March. That’s when the vaunted Spring Selling Season will save us all”
Hmm. But now it’s April, and sales are STILL dropping. So it’s the fabled “Summer Selling Season” we should look for. Good luck with that.
It is actually May Mike
I was referencing the April sales data, not the actual month it is now. But then again, I get so busy sometimes, I do tend to lose track of the calendar!
I thought it was the Spring selling season.
That city is so dead, even compared to anywhere in California. California at least really does have some of the intangibles people ascribe to it, along with having enough centers of a variety of industries, from technology to finance to media, to warrant a certain premium in housing and to financially support people to a level where it makes some sense. Phoenix is just a sprawling generic hellhole-its climate is about the only unique feature it offers, and even that is absolutely unlivable for 5 months of the year without constantly running an AC. Absolutely abyssmal culture for a city of its size-you could find more cultural events in a medium-sized midwestern college town 1/20th Phoenix size than in the whole city. Its previous appeal to retirees with its desert air and tranquility have been destroyed by absolutely unplanned and uncontrolled sprawl. Take a drive from Scottsdale to Sedona sometime-sound like an idyllic trip? The sprawl upon sprawl of Best Buy after Walmart after Best Buy after Walmart is, as described by another poster, like driving through a Flintstones episode where the background is just looped. This city’s industries are really a self-consuming snake, everyone I know down there works in realestate, construction, landscaping, or in the golf/hospitality industry-all servicing this behoemoth which is now crashing.
I’m glad you brought some of those issues up. Here’s my view of the situation from a transplant to the state. We all hear that thousands of people are coming; so often that it is taken as a truth. Fact is, nobody really knows how many people will move here. Yet developers are going ahead as if customers are waiting in a hotel for the house to be finished!
The over-reliance on the RE sector is obvious to anyone looking in. I must say, Arizonans are less aware of any danger from a housing bust than most other bubble markets. In a local paper last week, there were three full pages of jobs. Some professional, most service. But not one pays even half of what it would take to afford a local home with a traditional loan. Housing bubbles are a dead end.
Even if these numbers of people moving there are correct, who are they? Mostly they fall into two groups-recent graduates, who will be potential first time home-buyers, and who will not be in a position to buy anything like a $400,000 home as interest rates go up, lending tightens, etc., and retirees, whose housing budget is completely defined for what they sold their last house for. Their last house being in California, or Boston,or…any of the myriad of cities that all are trending down in terms of their resale. The skyrocketing values in these other places were a big factor in Phoenix-area run up. Those dollars are going to be vastly reduced now. So, the market for all homes is going to get hit.
My family has been CA residents for two generations.
In the last 12 months, my:
- brother moved to Washington.
- sister is moving to Pheonix (job relocated).
- 2nd brother moved out of LA to the desert (still in CA).
- 3rd brother is checking out a move to the mid-west within few years.
I am sure there are many more stories like this.
Unless you are fortunate to have a high-paying professional job (or you happened to own pre-bubble) in CA, then you have got to be thinking about moving out of state (Phoenix, LV, Reno, WA, Boise, etc). Salaries and home prices in CA are just too far out of sync. It is that or “settle” for renting the next 5-7+ years.
There is a third option of course. Buy a home beyond your means, in hopes appreciation will bail you out. Worked from 2003-2005. Good luck if you try that now…
Unless you are fortunate to have a high-paying professional job (or you happened to own pre-bubble) in CA, then you have got to be thinking about moving out of state (Phoenix, LV, Reno, WA, Boise, etc). Salaries and home prices in CA are just too far out of sync. It is that or “settle” for renting the next 5-7+ years.
I fail to see how that would help. House prices in the places you listed are just as out of whack with fundamentals as they are in California. It would be just as treacherous buying property in any of those places as in California. Perhaps even more so in Las Vegas. The only places in the USA where I would consider buying right now would be non-bubble cities like the mid-west or Texas, but I’m not sure it’s ever a smart move to buy in those places, because there often isn’t enough appreciation even to break even with inflation.
Heh, perhaps the # of people moving there is way over-inflated by all those flippers FALSELY claiming to be owner-occupiers for insurance, etc. purposes.
At least I-40 from Kingman to Flagstaff, Winslow, etc to New Mexico border has some nice variety and some natural things that are worth seeing. Thankfully, I have never been exposed to Phoenix (other than airport for plane change).
The state itself has many beautiful places. I think 30 years ago it would have been a beautiful place to move to, and some places that haven’t been creamed on by sprawl still are. Phoenix, though, is an example of what happens when you have too much money being poured into a market that was initially a good value in land and housing. The water situation there is unsustainable, not only drinking water but maintaining giant golf courses which seem to be everywhere. Somehow this seems to be ignored, passed on to some distant future to worry about.
OT, but the central-eastern part of AZ is overlooked and still relatively cheap. Also the central-western part of New Mexico, west of Socorro. There are Mogollon Rim areas, forests/lakes. Just not many jobs.
Good fishin’ too, or at least used to be. Understand the Showlow/Pinetop area has really popped over the last 3 or 4 yrs.
Showlow is seeing a good bit of RE sales, but it is hard to kick off bidding wars when there are hundreds of thousands of acres in every direction.
I agree…Springerville, Eager and St. Johns do not appear to be out of line, you just have to drive a long ways to get there from the interstate.
Pinetop, Lakeside and on west towards payson have been bubblicised though.
deer hunted near soccorro in the black mtn billy the kid trail area.nice unspoiled rugged areas.absolutely no infrastructure.you can drive for 6 hours thru the jila forest and see millions of ponderosa pines.absolutley no people i drove for 6 hours and saw 2 people.teddy roosevelt put that area of new mexico off limits back in the early 20th century.silver city might be a good spot or truth or consequences.
““April historically is not a strong month,” he said. “The key is going to be . . . May, June and July. We know they’re not going to be as strong as a year ago, but where they place themselves in the overall housing market is going to be a key as to overall strength and direction of this market.”
All I can say is WTF. Seriously. Everyone knows spring is the big push. By summer people want to be settling in, frequently because of the heat. What a total lie.
I know,all we heard last winter was that it will turn around in April/May.
I guess we should expect realtors to remain as postive as possible, but it ticks me off that the media listens to them. Most of the comments published are from realtors and so their allowed to continue the scam.
The crash is well underway but most don’t even realize it. Ughh.
“May, June and July…where they place themselves in the overall housing market is going to be a key as to overall strength and direction of this market”
They’re going to place themselves in the toilet - that’s the key to overall strength and direction.
“This city’s industries are really a self-consuming snake, everyone I know down there works in realestate, construction, landscaping, or in the golf/hospitality industry-all servicing this behoemoth which is now crashing.”
I lived in Scottsdale for 7 years and couldn’t agree more with this comment. Overall, Arizona is a great place, but the people in Phoenix metro are going to get strung - bad.
Wow I can’t believe it is starting. I have been waiting for this moment for some time. Supply is at an all time high. Sales at six year low. Any first year economics major could tell you what that means. Supply and demand dictates that prices must come down. Their is no way to get around it. This is so exciting. I am really concerned that the effects of this will destroy the economy thus taking me down with it but at least I will get the satisfaction of being right. All those tards that argued with me for the last six months and did not listen when I told them not to buy right now or to sell and get out on top will get smoked too but they will have been wrong.
Update on house going up for sale in Phoenix.
So I spoke with my freind today who is putting her house up for sale with REMAX. The agent inspected the house today and told the tenant to start packing her bags as he would have it sold by end of June if not sooner with a “Quick Closing”. I counted 83 houses at the $250K mark on MLS with many more bracketed around that price point. I don’t know where the agent is getting his confidence from.
” I don’t know where the agent is getting his confidence from. ”
She don’t lie, she don’t lie, she don’t lie….
Cocaine….
Sounds like it could become a great opportunity for the tenant to trade up.
I spoke with the tenant, she has had it with PHX and is bugging out for Boise ASAP.
Suzanne researched this.
How can you tell if a realtor is lying to you?
You can see their lips moving!!!! LOL
“Take your lumps,” says Jon Duncan, a Tacoma financial planner. “If you’re feeding this thing cash flow, it won’t take long to make this a very bad investment.”
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I couldn’t help by paste this quote I read from todays CNN article on the Housing Bubble Bust (”Speculators Get out now before it’s too late”). Thought it very appropriate for Phoenix.
I know summer is a popular season for house-hunting in New England… but in Arizona? Sorry bub, I don’t see people wanting to go house hunting in 110 degree heat. AZ real estate’s best months are probably April and May. In other words, this is it.
And the season “started” early around here in New England due to the uncanny nice weather. Above average temp, and very little snow. Still a very disappointing selling season for sellers, and the first of YOY median price decreases in MA.
If it was 90F, it would be too hot for me. 110F, I’d be blowing to Flagstaff or someone (if I was dumb enough to go to that oven in the summer). Thank goodness I am not there. Even SF Bay is better than that.
You guys monitoring stocks?? Don’t look good. Where’s the bottom?
We will have to wait until October to find out…
not until it corrects at least another 10-15% near terms. Everyone is buying and so caught up with the DOW nearing all time high.
Gold, stocks, the dollar, all down today. Wealth isn’t safe anywhere.
http://quotes.ino.com/affiliates/market-175×126nd.gif
“People don’t seem to be getting the message that it’s a difficult time to sell. ‘More houses are going on the market quicker than we are selling them,’ said Trent Powell, a Mesa Realtor.”
It is a really easy time to sell. All one has to do is lower the price until a buyer is forthcoming.
I took a drive in one of the relatively newer subdivisons in Chandler(built 2-3 yrs ago) to check out things — every single street had at least one house for sale. I guess the speculators or the people who bought new ones are pumping them into the market. Its making sense now, if you can find a buyer in metro PHX NOW this is the sellers best bet - its gonna be long summer and even a longer winter ahead. Still a ton of dumbasses just don’t get it and have the prices ridiculously high. I just don’t know what their mindset is.
You just knew this was coming
Uuuhh, weren’t they just talking about the inevitability of the Spring bounce? They need a new term… Summer Spike? Sunny Slaughter?
small fall?
in the last 6 years have bought and sold two houses in the North Phoenix/Scottsdale area. Summer was by far the slowest period in my case.
Phoenix today at 103 degrees…its too hot already to shop around…and summer doesn’t officially start until June 21st.
I still say , if I was a buyer and I saw all that inventory /for sale signs , I would back off from buying . People like established projects and with new homes they like to think they will be nice established neighborhoods .How can you tell anything with vacant houses and a bunch of short term flippers holding or trying to get out ? The prices are not what they use to be in Arizona , so baby boomers might look to other options .
Yes Wizard… exactly the argument I have made last summer with all the new home sales skank/bimbo/whores.. I said, “look honey, most of your buyer traffic is artificial flipper demand… here today…gone bust tommorrow… and all these fogies moving here…. they will look elsewhere when a retirement home that was 170k in March 2004 is now 370K.” “come on sales bimbo…you are not an economist like me… you are just a pair of big tittays with a smile… a Tollbot for master Bob Troll” Come on!!! Aviano at desert ridge looks like some Israeli setttlement in the Gaza Strip!!
LOL, I can just see you talking to the bimbos.
phuck - step AWAY from the bimbos.
get out there and count each and every for sale sign one at a time.
i expect to see a 3,500 page post reporting your results on my desk by this sunday
Hilarious. You pegged Desert Ridge!
Very cute. Our daughter is moving to a nearby-to-Phoenix town to take a teaching job, & we are flying out over Memorial Day weekend to help her find a place to RENT. It will be interesting. Also, unfortunately, sounds very hot….
“Powell is also optimistic. He said that during spring break sales picked up dramatically and he sold four houses in the week. ‘I just got a flood of calls, but it died right after,’
Must’ve been all those college students/flippers spending their student loan $$$$.
Can you imagine: “Ma, pa, I’m quitting college to become a Flipper.”
EVERYONE, AND I MEAN EVERYONE, either moving here or stayed here for cheap housing. We went from a great value, to a complete ripoff in 24months. Housing needs to come off 20-30% minimum before homes start being attractive. My indicator… drove by the DMV in N.Scottsdale… it was dead. I drive by it sneaking in to Lowes for the last 2yrs, and it was packed. … Now… more than 1/2 empty. Looked at houses in N.Sdale… for sale signs everywhere. and who the phuck wants to live in a sh;t box condo anyway…. I look at these condos that cost 300k and you don’t even have a yard. 200/mo HOAS… But I could rent one for 900$ in scottsdale. I think the air has high levels of drugs that folks are inhaling… wtf is going on!!!
Y’all been Californicated.
precisely
Case in point,… mls 2526905
TollCondo in Aviano… hey it rhymes
3935 E Rough Rider Rd, Bld 12 — #1156 Phoenix 85050
BRAND NEW, NEVER LIVED IN TOLL LUXURY TOWNHOME FIRST RELEASED.EXQUISITE 2BR/2.5B SUITES WITH 2 CAR GARAGE.GOURMET KITCHEN WITH STUNNING CABINETS,SLAB GRANITE,TUMBLE STONE BACKSPLASH,STAINLESS APPLIANCES,. ISLAND OPEN TO FAMILY ROOM. THEATER SURROUND SOUND. MOUNTAIN VIEW AT BALCONY. (untill they put up another Walmart and eclipse your shit view) UPGRADED WOOD BLINDS THROUGHOUT(you’ll need these so your neighbors can’t see you on the Hun). NEUTRAL TILES IN RIGHT PLACES(inluding up your A$$),UPGRADED CARPET,SOFT WATER & RO SYS. EPOXY GARAGE FLOOR. NEAR (community kiddie pee filled) POOL/BBQ/PLAY AREA. ACCESS TO AVIANO MASTER PLAN AMENITIES INCLUDING CLUB HOUSE, FITNESS CENTER,KITCHEN, POOLS, SPA, TENNIS, BASKETBALL & VOLLEYBALL COURTS,NEIGHBORING PARKS, WALK/BIKE TRAILS, FUN PLAY SETS( you could buy a play set at Walmart for $200), MOUNTAIN CLIMBING.NEXT TO SCOTTSDALE(16miles from Old Town Scottsdale), EASY ACCESS HWY 101 & 51(translation: you can smell the deisel Cemex trucks on some days)
wow… JUST $450,000 for 1490 squarfeet
HomeOwnerAssociation: $195 Monthly
WHAT THE HELL IS GOING ON IN THIS COUNTRY…. THE DAMN MANSIONS IN NEWPORT RHODE ISLAND WERE CHEAPER!!!! a house in damb Beverly Hills, CA was less than this in the early 1970s.
you get house debt serfdom for $300/ft for a box that cost 70/ft.. that is what you get.. you should get 10 free nookie sessions from the sales bimbo for these prices!~!!!
a house in damb Beverly Hills, CA was less than this in the early 1970s.
Hell, $450k would have bought a very nice SFH in Los Angeles even 6 or 7 years ago.
“Tempe Realtor Craig Akers advises sellers to be patient, to clean up and de-clutter their houses and to be optimistic.”
…and feed your own fukkin squirrels!!
Well… I met a guy about a month ago that just bought a large piece of property outside of Phoenix after having done a few flippers in the area. They haven’t built or subdivided it yet, but it is clear from his comments he expected to start this summer and make a lot of money doing it.
He calls himself “self employed”. He used to sell RVs. Him and his wife were living in an RV as they had sold their last home and were waiting to start construction on the next one. It doesn’t sound like things are going to work out very well for him.
Hey Phuck -
Sounds like Anthem has mestastasized and a chunk blew off and landed in Desert Ridge.
I’m in NW Phoenix. Double if not more of all for sale signs around here are ‘for sale by owner’.
Inventory is simply amazing.
I live in far Northwest PHX, Peoria area. So many signs you can barely see the ground.
My rule of thumb is 100 degrees by May 15, it came a few days early this year.
St. John’s, Alpine, are in a bubble too - nice but they are in the middle of nowhere.
My favorite spots in AZ are Green Valley ( South of Tucson) down to Nogales and over to Patagonia. Construction everywhere.
Outstanding post, Phuck! I could not agree more! The thing that really gives me the red ass is there are still tons of home owners that think they can get last year’s prices. We looked at a house in South Tempe in Pecan Groves sub - mid 1980’s home 2900 sq. feet - NO Yard, Tiny, beat up pool, old decor, crappy carpet, needs new paint job, kitchen is old and outdated - they wanted $625,000! What in the hell? I looked at the agent when I saw the price and raised my eyebrows like “Are you out of your Phucking mind?? He just shrugged his shoulders and said “this is South Tempe and this is what people are paying.” I then asked how long this home had been on the market and he would not answer me. I told him to tell his seller to get a grip…this house isn’t worth $325,000.