‘Every Agent Is Getting Ridiculous Lowball Offers’: Phoenix
The Arizona Republic reports that news of the housing bust is echoing off the hills around Phoenix. “Home sales are plunging in metropolitan Phoenix, even as record numbers of people decide to put their houses on the market. For now, the median sales price is holding firm. But with the number of for-sale signs dotting yards across the Valley, no one expects that to last.”
“‘Buyers think, ‘Why should I buy today? It will be less expensive in a month or three weeks.’ Every listing agent I talk to is getting ridiculous lowball offers,’ said Diane Watson, an agent in north Scottsdale.”
“Through the first four months of 2006, the number of existing houses sold in the Valley is down 46 percent from last year and 12 percent from the same time in ‘04. Last month, there were 38,206 homes for sale, a record high. Agents say they are seeing more prices being cut, and there is the persistent question of whether the crucial summer selling season will be strong enough to rescue the year.”
“Neil Brooks, an agent in the north Valley, said the clock is ticking on resales in metropolitan Phoenix. He expects a 10 to 15 percent price reduction Valley-wide if summer selling doesn’t chop inventory. ‘The next 60 days are crucial for Arizona real estate,’ he said.”
“(Broker) Jim Sexton in Phoenix, said job growth and rising population are still in place. He doesn’t expect a price collapse. ‘The market is far from falling apart,’ he said. ‘You’re going to talk about real estate falling in a lot of other markets before you start talking about it here.’”
“(Broker) Margaret Dixon thinks prices could drop 10 to 15 percent in areas hit hardest by speculators. Typically, she said, outlying neighborhoods would “adjust first and adjust the most.” She said areas closer to jobs and transportation are less susceptible to corrections.”
“Erin Middleton and her husband have been trying to sell their house in Cave Creek for about a month. They tried selling it themselves, then hired an agent. Several people have walked through, but no one has gotten serious, even though they spent $8,000 on new paint, carpeting, kitchen appliances and countertops.”
“They dropped the price Monday to $429,000 from $435,000 and are second-guessing their decision not to list the house last year when demand was strong. ‘You can’t sell regardless of the price,’ she said. ‘Nobody’s looking. The market’s not where it used to be.’”
I think I’ll go out and make some ridiculous lowball offers right now!
Ben,
You better hurry! No telling how long this “buyers market” will last.
Don’t you just hate it when the newsies refer to todays situation as a “buyers market”. I remember the real buyers market here in nor cal in 95′, all the RE signs were beat up and leaning over, property on the market for 1-2 years was common and whenever I showed property the listing agents would call several times after the showings and beg for offers. Once we did have a contract on a home it was standard to back up the sellers and demand thousands of dollars in concessions (on 60k homes) to close the deal. The sellers were terrified to go back on the market and would give up much in order to be out from under their housing rock.
It’s not a buyers’ markets until prices fall to the bottom. Until then, the sellers can keep the market - they’re welcome to it.
On the way down, those buying are paying for part of the bubble.
It is a true buyers market when everyone hates real estate.
If every agent is getting “ridiculous lowball offers”, I guess they’re not that ridiculous.
Or, one could easily say that for the last 4 years, realtors have been getting “ridiculous highball offers”.
Good point. I understand this ran on the front page and this is the biggest paper in the state, by far. Good job Phoenix!
I was thinking the same thing this morning when I read this article. Ridiculous!!! I think the price is the thing that is ridiculous!!! I have a bet with a guy at work his property will be worth less by the end of the year. He sent me a meeting notice on outlook because he is so sure he is taking my money. He is on cloud nine right now thinking it was an easy 50 bucks. He has no idea what is about to hit the market. I can not believe so many people are clueless right now?
I don’t think he’ll have the 50 bucks to pay you by the end of the year…
How will you determine the winner?
Remember, the median price can be deceiving as it does not account for quality considerations. Granted I think we will see yoy declines in even the median, but it isn’t guaranteed.
Zillow.com shows his house for 456210 right now. I hope their price matrix thingy does not screw me over but I feel very confident even though the az republic pulled the story on sunday.
Cracks me up. Flippers drive prices up 100% in a couple of years. Now they’re getting offers that are probably still above the long-term mean, and they think they’re “ridiculous”.
It pisses me off. These greedy vermin who have created the “million dollar hovel” have the nerve to say a sane offer is ridiculous?! Sheesh, what ignorant weasels. What is ridiculous that any dufus would pay an extra $200k for some stunning “Tuscany Rust” paint in the crapper and some “breathtaking” granite counter tops. Let them feed their own scorpions or whatever the do down there…
Yeah, the nerve of these weasels!! What is ridiculous is to pay these vermin $200k for a few cheesy cosmetic improvements and preowning it for a couple months…May they enjoy feeding the gila monsters themselves for a while longer…
I wrote the AZ Republic and asked them why they never post the record inventory on the market in Phoenix a few weeks back, I guess they finally did…
I’m gonna have to make a lowball offer on the 429,000 price. I’m thinking 250,000, does anyone have a number I can reach these sellers at?
1-800-crymeariver!
LOL.
funny…
I calculated what the rents worked out for a new subdivision recently, with a 6% annual return. I came up with $80-90k for new houses that are on the market for $350k.
Whoa — that is a s-e-r-i-o-u-s disconnect.
I’ve done similar calculations in Seattle. As I recall, $400K houses were worth around $170K, even with a 20% markup for the “I own it”/feel-good factor.
This roller coaster is just starting to pick up steam …
First i would research they tax accounts. You cant lowball someone that is way over their heads. This is a great advantage when you go to bargain with them and hels you cut thruogh the crap they say. I’m putting a bid on 2 .5 acres of land that is listed at 255k. My bid……130k. Now the chance that i get it is slim and none, but I’ ll put it this way. “Always bid it at what you want feel it is worth. That way you’ll be happy either way” (harryd)
Offer @ $250k??????
Still too high with a 100% bubble run-up…
Try $215k….Probably bought the place for $65k in 1985.
‘You’re going to talk about real estate falling in a lot of other markets before you start talking about it here.’”
Oh………….I see………….Phoenix is different!
Ummm I think we are talking about Phoenix falling before anywhere else LOL!
Isn’t it landlocked? or was it sunlocked?
Any place that goes up 35 to 40% in one year ,as Arizona did ,in most part driven by speculation ,could fall by the same amount .
Remember that percentages down are smaller than percentages up. A gain of 50% is wiped out by a loss of 33%.
I think soon it will be houselocked… or HELOCed!
8,000 for paint and etc… I hope it is that new solar paint ( thank god for nano technology) .
You know, we’ve spent $20,000 getting an eff’ed up rental back into shape. $8,000 is nothing to spend on a $429,000 house. That’s just maintenance. Why should any potential buyer be impressed by some paint. Why should they be expected to pay for it ? Oh please.
Gee, I’m sorry they are offended by “low ball” offers. I suggest we withhold ALL offers until they are a little more appreciative of the ones they are getting.
Why the hesitation to buy all of a sudden? In the worst case you just stay in the house and sit tight for 15 or 20 years until you can break even. What’s the big deal?
unless you find a way to stay in six houses at the same time and pay for it too!
I don’t think it’s hesitation. I think it’s affordability or the lack thereof.
I’m kidding, of course.
Just put a house in escrow on friday, located in Surprise. It was all about price. Be greedy, and it will just sit with no action. As soon as the price got low enough, people showed up and we had an offer wihin about 2 weeks. Basically sold it for what I paid for it in march of o5 and feel damn lucky to get out without a big loss. Ben, great job by the way. This blog keeps me super informed and saves me a lot of time.
A reasonable man. Among the few (on the sellers’ side), at present. Congratulations on your wisdom to take what you could get and get out.
I second chip. You gotta be a pretty well-balanced guy to break even after being up and not be pissed.
As a recent college grad who moved to Phoenix last summer, I’ll be honest with you, I love reading these articles. Prices must’ve jumped $50K-75K from the time I took the job to when I moved out half a year later. Ridiculous. We rented for a year to get settled and find a house, thanks to this blog we’ve decided to keep on renting and wait til more of the fat is squeezed out of this market.
“Neil Brooks, an agent in the north Valley, said the clock is ticking on resales in metropolitan Phoenix. He expects a 10 to 15 percent price reduction Valley-wide if summer selling doesn’t chop inventory. ‘The next 60 days are crucial for Arizona real estate,’ he said.”
hmmm… when he said the next 60 days, did he mean starting today? May 13th?
well, here’s the inventory increase from May 12th to May 13th.
5/12: 45,003
5/13: 45,581
…I guess the next 59 days will be crucial for Arizona Real Estate…
Bubble Markets Inventory Tracking
Holy Sh*t, over 500 houses added to inventory in one day? These flippers are DOOMED! They might as well just go to the bank and hand in the keys right away. Doesn’t make sense to sit and hope for 6 months worth of carrying costs before turning them in. Any house I buy will most certainly be from a bank sale now that I see we have them on the ropes!
ocrenter ..it seemed to be just a few days ago someone posted the daily MLS in Phoenix…I thought 40,500 or so was quite an increase…looks like the sellers listings market are overwel,ming buyers.
The summer, markdown is inevitable!
As for Ben my guess the only place to buy propery will be Quit claim just days before a foreclosure. Unless you have patience, then you can buy direct from your local banker friend in a FEW years.
Auger-inn, I read that and said Holy Sh*t too.
If that’s not an anomaly I’m a little nervous about the outlook for next week. 500 x 59 days is 29500 additional homes for sale by the way, with sales falling off a cliff.
I’m not going to buy even if it drops 50%. Who the hell wants a 30 year mortgage in the midst of deflation?
The time to buy will be when you feel exactly that way unfortunately.
Do not worry, if deflation should start to set in to that point the Fed will rush in to “fix it”. Hello hyper-inflation — they could purchase over-inflated MBS if they really wanted, and they have done so in the past quite often (S&L, LTCM, etc…). If you buy between those points you’re golden… welcome to insta-wealth.
If that doesn’t happen, but you buy when it’s about the same cost to rent, you don’t have to worry either.
Don’t lock yourself out of owning. It’s always scary, and doubly-so when it’s BEST to buy.
There are another 529 FSBO on forsalebyowner.com I know that is not alot but it bring us above 46k for the state. Nice right! That is just FSBO that are listed. There a quite a few more out there. I have been driving to open houses for fun lately just to see if there was any activity. Usually there is only one car in the driveway so unless the realtor got droped off by his/her spouse then no one is looking to buy right now. May sales look real bad if they don’t start slashing prices
Does Pheonix inventory numbers include new homes? Aren’t there a gazillions of those also?
no, these numbers do not include FSBO and new homes.
But it does include the lots, right? Anyway, it doesn’t matter. The increase we’ve seen is just mindboggling.
In Central Florida, Orlando to Tampa we add 700-800 to MLS every day and have for months. We sell 2-300 tops. Doubling up over and over.
One thing I have not heard much about is the illegals who have been buying houses. Doesn’t sound like they will have much to worry about as they can just bail on the loan and no one will know where to send the bill. They may just be using someone elses social anywho so what the F@ck. Any body else have any thoughts on this part of the equation?
No worse than homeless dead-guys getting loans. It’s just another symptom of gambling with OPM (other people’s money). If I win, I win. If I lose, someone else pays.
I read an article about illegals on Long Island. Smugglers buy a house in a middle class neighborhood thru a straw, then rent it out to 40+ people @ $300 a crack.
Note never gets paid-Repo people from the bank show up to speak to a Mr. Miguel Noches…and all they get at the door from a look-a-like’ tenant is-No comprende English, Senoir…
As they leave, the tenants sic their pit bull on the stupid gringos.
LMFAO…Now try to sort thru this mess as a secondary MBS holder headquartered in CA…F*ckin’ buffoons
“They dropped the price Monday to $429,000 from $435,000 and are second-guessing their decision not to list the house last year when demand was strong. ‘You can’t sell regardless of the price,’ she said. ‘Nobody’s looking. The market’s not where it used to be.’”
They bought it 5 years ago for $135K. Now they are trying to sell it for $429,000. But, hey, price is not important and please do not make a ridiculous offer at $300K!
It worries me that agents are getting low ball offers. That means that people are thinking of buying at 15% off the peak prices. Fools. I think a lot of people have lost sight of what a house is worth. I’m hoping that there aren’t enough “15% off buyers” out there to turn the market around. How can their be ? Who hasn’t bought a house in the last 3 year and who would have cash or a not have to sell a house to buy another ? And surely when they see that their house sells for a lot less they will figure out that the one they are going to buy is no bargain either ?
I guess that I am content to see the bubble deflating fast right now, but I hope that people don’t get stupid and start blowing air back into it. How can they with the inventory numbers the way they are ?
> It worries me that agents are getting low ball offers. That means that people are thinking of buying at 15% off the peak prices.
Why are YOU worried? A few sales at 15% down and the comps go down with it. New low-balls at 15% will be nearly 30% down from peak. I think that’s the way most bubbles unwind, e.g. the bubble in Japan. The first buyers won’t be so happy in the future though about their “savings”, but buying is their decision.
Regards,
Peter
I think you’re voicing the concern of many bears, and your points are all valid. That being said, I believe there will be “dead cat bounces” (DCBs) ALL the way down. We shouldn’t be too discouraged if it **appears** to be turning around, because each bounce will be shorter, with less volume and less of a price spike than the previous one, IMHO.
To be honest, it’s not until the exotic financing dries up that we will see some serious moves down, IMO. Right now, it’s just the psychology, but people are still **able** to get funky financing if they are willing to risk it. Lots and lots and lots of idiots out there who do no due dilligence. Can’t tell you how many people are saying, “it never goes down / it’s seasonal / just a slight breather before we get going again,” etc. It’ll take a while, with a continuous tightening of credit/lending standards, before the “sheeple” get it.
I’ve read that bubbles require three ingredients, Liquidity (ability to sell quickly), Psychology (public perception of infallibility), and Financing (ability to borrow money to buy).
We’ve lost the first, the second is going, and the third is on the ropes.
It’s all over but the shouting, it will still take years to drain this thing though. Patience.
TD.
It’s very common for to get what they comically call a “dead cat bounce” after the first serious decline in a market. There seems to always be a pool of fools who see prices back down where they “missed” buying the first time around.
So “you can’t sell regardless of the price” says the seller who was only willing to cut his price by a whopping 1.5%??
You have to love these people who were so thrilled to see prices go up by 10 or 20 percent a year but think it’s a crime against nature if they ever drop by the same amount.
Aint that the truth.
It’s all about the location and if an excessive amount of homes are on the market. Right now resale of home prices in East Mesa have held strong:
MLS 2462721
4/03/2006
4910 E Fairfield RD Mesa
1985 32R2G 1200
asking: $229,900
sold: $229,900
DOM 31
MLS 2441042
4/19/2006
538 N 64TH ST Mesa
1990 322FRPool 1489
asking $239,900
sold: $242,000
DOM 83
MLS 2446280
4/18/2006
6322 E EVERGREEN ST Mesa
1987 32RS2G 1220
asking: $245,000
sold: $238,000
DOM 63
MLS 2479763
4/10/2006
6615 E FOUNTAIN ST Mesa
1991 32RP2G 1308
asking: $249,900
sold: $247,000
DOM 9
From Zillow:
last 30 days
85205 zip (East Mesa) up 1.8%
Mesa as a whole up 1.2%
Maricopa: 0.8%
AZ: -0.3
I don’t think it’s a slam dunk that prices will crash everywhere. Phoenix is still where the white-collar jobs and location is everything esp. with Az continuing to grow. Imo, it’s the newer developments built futher out which are going to get creamed. No way is anybody going to pay $350,000 for an hour commute into downtown Phx.
there will be buyers on the way down..Volume is what dictates future prices,Bud.
Yes, it must be different there. (roll eyes). None of the people in East Mesa would be poorly financed or willing to take a profit on their home and get out. Prices will probably increase there for the next 10 years while they decrease everywhere else. Yes, that is it.
What I found interesting is that sellers who have owned their property for some years and have a ton of equity STILL insist on getting what their neighbors got in late 2005.
My feeling what long-time sellers would drop the price a quick 20% and sell which in turn would kill the neighborhood comps.
But we are not seeing that at least at the present time.
I own both investment property that I’m holding for tax/loan/prop 13 reasons. Transaction costs make it just as prohibitive to sell even though I know and love the bubble logic.
It still made me a bit giddy to see the price rises and it still “bugs” me to see the price drop. It seems nothing feels more deserved than unearned windfalls.
I’m happy for my renting friends though.
Hey feep…. my thoughts exactly. Are you considering the CME Housing Hedges? Shiller’s go on the market the 15th.
Anyone know of available direct hedges on apartment buildings?
I am not inclined to sell anything right now, but I’m thinking a hedge would be interesting.
I’m seeing the same in the Netherlands; many sellers can drop their price by 50 or 75% and still make a profit, but they refuse to make any concessions on price and keep their property on the market for years if necessary.
Obviously, the winds of change have not yet arrived in Europe but even when they do it will take years before everybody notices that the market has changed.
difference is in US builders build at a rapid pace..I bet new constructions in Netherlands may not be that many…So these markets are more psychology based//
Those are just the sucker buyers. The house at 6322 E. Evergreen sold in April 2005 for $185K. Way to fund a flipper. If it can go up in a year, it will come DOWN just as much.
East Mesa is a PRIME location, lmao!! Right out there where all the white collar jobs are, out there in Apache Junction?? The game is over real estate dude, if you’re holding property in east mesa, which I still can’t believe you think is a PRIME location, you’re screwed. Yeh this looks like a white collar workers house out there in ‘east mesa’ http://tinyurl.com/nt23y
East Mesa…kinda like North Nogales.
If you look at the listings I’m talking about 85205 zip and District 4 schools (which have above ave test scores).
Nice area with 1400-1600 sq ft homes, 3/2 and 7500 lots. They peaked at $255,000 last year and now sell around the $240,000 range.
They’ll be selling for what they’re worth, which is south of 150K, in short order. Water seeks its own level, and the real estate tidal wave that was speculator driven is O V E R. This is just the beginning, this knife has a long way to fall before I even think of picking it up off the floor.
Yeppers… Ease Mesa, is a Prime Place to take a bath financially. you basically have ghetto east,south and west of you, and a mountain to the north. I love all those weirdos with low-rider chevy S-10 pickups.
Nomad1 — I don’t know. I mean, look at that — only five sales in Mesa! Wow. I don’t know how many homes exist in Mesa, nor how many are for sale. Realtor.com shows 1,877 in the range 3+BR/2+BA, $200K - $1M, but maybe they are off by 1,500 listings or so.
I should have made myself clearer. I was specifically referring to 85205 zip where I am interested in living:
1500 sq ft, 3/2 1980 -91.
However the Zillow info covers a much wider scope.
You’d be smarter to rent for 18 months, especially in East Mesa. Wait for the the coming headline: Record Forclosures in Maricopa county, owners walking away from properties. Then buy. You can always change your mortgage interest rate, you can NEVER change the price you paid.
Actually wait for the headline “Record Foreclosures Continue to Climb” then buy the following fall.
I love your sense of humor.
By the way, since you have been around for a long time I was thinking that you may know what happened to Prof. Bear? Did he reencarnate into another alias after the troll attacks. If did he is a genius because he changed his stile too. What about Mr. D?
Been wondering about Mr. D, myself. We didn’t exactly agree on political matters, but I enjoyed debating ideas together. He is quite well-informed, and brought an informative perspective to this blog.
Mr. D…if you’re out there lurking, please come back!
I wish SBBubble Believer would come back . That guy was funny .
Yes, it must be different there. (roll eyes)
Nothing makes me want to buy a home like 120 degree heat!
“Phoenix is still where the white-collar jobs and location is everything esp. with Az continuing to grow”
You mean all those great white collar jobs in the realty and mortgage industries?
On a more somber note. Took a drive NW of Phoenix, out toward Surprise. Beautiful desert scarred with miles of mud brown McMansions, 3 feet from each other, no landscaping, no thought, no community, nothin. Many not sold, and nobody really looking, even on a nice Saturday afternoon. All the developments had a very strange ghost town sort of feel.
“They dropped the price Monday to $429,000 from $435,000 and are second-guessing their decision not to list the house last year when demand was strong. ‘You can’t sell regardless of the price,’ she said. ‘Nobody’s looking. The market’s not where it used to be.’””
“You can’t sell regardless of the price,”
I bet she could sell it within a week if she listed at 250K. What BS.
David
http://bubblemeter.blogspot.com
You know I get the feeling that the “realtors in the news” are responding to this blog by the comments they make . Does anybody else get this feeling ?
Yep.
I live in Houston and saw what happened after the 1980s RE mania here. I remember driving back home one semester from college in 1986 and seeing probably every third house for sale in our subdivision (Lakewood Forest). The houses for sale were vacant, and the lawns were utterly unkempt, with foot-high weeds in the yard.
Phoenix, Las Vegas, Bakersfield, etc. will experience the same. The only difference is Phoenix and Las Vegas will benefit from the fact that if no one is around to water the lawn it won’t make any difference because the lawns consist of gravel and cacti. Lots of “ghost town” subdivisions like we saw in Houston, only it won’t look as bad.
BTW, if you’re thinking about “investing” in Austin (and I know that a lot of idiots are), keep in mind they had an even worse RE collapse than Houston just 3 years after ours.
When I first moved to Austin after the bust, office vacancy was the highest in the nation, at 45%.
It’s funny how real estate manias pan out. You and I remember the office building mania. Houston and Austin eventually recovered from the 1980s “see-through office tower” mania, Dallas never did. Ben, I don’t know how long it’s been since you’ve been back to Texas, but the latest mania are those 1-story warehouse/office parks. I’ve seen them sprouting up in all three cities, but I think Houston is king. The entire west side along Beltway 8 is filled with these developments, and more are sprouting up. It seems crazy to me. There are developments near my office that have been vacant for 2 years and they are STILL BUILDING THEM. Who is paying for this, and why? Are they STUPID?
You’re the same age as me. We’re not old, but we’ve been around long enough to see what the markets can do. Are there that many people in their 30s stupid enough to “invest” in building vacant office parks?
I guess some of them are paid for by European investors.
plenty of ads for these developments on EU investment website, promising something like 15-25% yearly returns …
As for vacancy, my area has had 30-40% vacancy for business/office space for at least 5 years, but prices are still very sticky. I’m told this has to do with the financing, it’s better to keep the rent higg and have no tenants than lower the rent and get trouble with the financing.
In recent years REITs have been among the best investments. I have good reason to believe that one of my friends has quite a bit of his retirement money in them. As long as the general rent level is sticky, perhaps a new building can be profitable by pulling tenants from older and less desirable space — it would be the owners of the old stuff that lose big.
I, too, have wondered how rents can remain so high in the face of such high vacancy rates. I suspect that the number of potential new renters that might be attracted by price drops is limited by the rate of new business formation and expiration of existing leases, so that lowering rents cannot call forth enough new renters to offset the decreased income. So the owners will stand firm as long as they can. Perhaps many have lowered their cash flow needs by refinancing — indeed, the inflows into the REITS have themselves provided low-cost financing.
When this thing hits, even we will have to gut-check before buying. It wont be pretty folks and when the prices fall, nobody will want to buy. Even if the house that is selling for $700,000 right now drops to $350,000, you will still have a tough decision to make.
This entire real estate industry is a fraud. It is a pure greed based industry. I never would have imagined that a house selling for $210k in 1998 is selling for $700k today (a 240% INCREASE). And the local salaries are increasing at just a meager 4% to 5% a year. If you look at the fundamentals, there is no way in this world we are on the right path. One day this great USofA will pay for our idiotic behavior. I can’t wait for the day, China starts selling off their US investments, or the day China invades Taiwan and tells Bush boy to shove it. Iran is already doing it. What happen to the days when we were the mighty USA? Now we are the laughing stock of the world. What a joke we have become.
The “good old days” like during the Vietnam War under Lyndon Johnson?
Because real estate is overpriced you’re looking forward to Taiwan being invaded by China? You don’t like Bush so you’re happy about Iran? What joke you have become.
I’d venture to guess (s)he’s refering to our greed and **ARROGANCE**. When we feel that it is our **right** to tell other countries how to govern themselves (esp if they do not pose a military threat to us), we have a serious problem. Very arrogant, and not exactly going to mend fences, either.
What’s even more disgusting is how we refer to ourselves as the guardians of “freedom and liberty” while taking away other peoples’ rights to choose their own forms of governance and religious/social/economic systems.
Sorry for the rant.
Or when Islamic terrorists tell AMERICANS to obey shia law or die. That one’s a hoot. Stupid Americans are the ONLY ones who try to FORCE their beliefs on others — yeah right!!
Well I’m sure glad those Islamic terrorists haven’t told us Finns to obey shia law or die. I wonder why?
They’re starting with Denmark?
Well I’m sure glad those Islamic terrorists haven’t told us Finns to obey shia law or die. I wonder why?
They came first for the Communists,
and I didn’t speak up because I wasn’t a Communist.
Then they came for the Jews,
and I didn’t speak up because I wasn’t a Jew.
Then they came for the trade unionists,
and I didn’t speak up because I wasn’t a trade unionist.
Then they came for the Catholics,
and I didn’t speak up because I was a Protestant.
Then they came for me,
and by that time no one was left to speak up.
- translation on the New England Holocaust Memorial of a poem by Pastor Martin Niemöller (1892-1984)
“Those who refuse to learn from the mistakes of history are doomed to repeat them.” - Santayana
And sometimes complete fools come up with innovative, unprecedented ways to screw up.
Actually, not so unprecedented. I fear our leader has been tring to emulate the Churchill of the battle of Britain but is following the Churchill of Gallipoli instead.
Poor stupid Fin. Shia law has already condemned you to death regardless of your self-righteousness.
You have to live here to truly appreciate the number of homes for sale. MLS numbers do not accuratly paint a picture. FSBO is everywhere you look and I would say they’d add at least another 15k homes to the inventory figures.
Today, I have seen more open houses than any other time. It was amazing!
Ben -
IMHO, you left out some of the key points of the article.
For example, the article mentioned under the sub-heading “Market Still Healthy”:
….national experts aren’t ready to write off the Phoenix market. Tim Sullivan of San Diego-based Sullivan Group Real Estate Advisors said there is a four-month supply of homes on the market in metropolitan Phoenix. Anything below a six-month supply of homes for sale signals a healthy market.
“Phoenix’s housing market hit the sky last year,” he said. “It hurts a little now because the market was so good last year, but it’s not like prices have fallen and no one is buying. People are still buying in Phoenix, they are just taking their time.”
And under the sub-heading “Soft Landing Predicted” the article continued:
“The core of the market is very strong,” Dixon added. “It will be a soft landing.”
My point is that there is still a lot of self-serving nonsense being printed that continues to confuse the sheeple.
Newspapers are getting their asses handed to them by bloggers and other websites. Now open a newspaper and look at the ads. Furniture, Real Estate, Mortgages. The end of the RE bubble is going to mean the end of a lot of journalism careers. They’re postponing the inevitable.
Yeah, but let’s be realistic. How many potential buyers actually read blogs such as this? They get their info from the AZ newspapers which have all but said we’re in for a “soft landing” Skyrocketing inventory is usually mentioned in passing or in connection with a report stating how the prices have leveled off since late 2006.
Don’t expect much help from the main stream media. They know full well who butters their bread.
You’d be surprised at how many people read the blogs directly or are in contact with an avid blogger. Plus it’s really hard to hide 12 for sale signs when they’re on a single block. This boom is bust. I bought my house in late ‘02 and the price has more than doubled, I know it’s not worth what the comps say it is. I believe it’s worth what I originally paid + 25%. High housing price hurt everyone, save for the property tax collectors who are having a field day.
. I believe it’s worth what I originally paid + 25%. [2002].”
Why? Improved neighborhood, significant improvemens, you spent a lot on fefered mantainence, local school test scores went up, taxes went down, commute costs favor your location, a magical coating of inflation teflon?
None of the above, I figure I paid a good price in ‘02 and the normal appreciation of 5 -7 % for the four years I owned it.
Exactly. “Soft-landing” “Buyer’s market” All this nonsense when the story is growing inventory.
There still are plenty of people buying just not nearly as many as last year’s record numbers. With the current skyrocketing inventory buyers could hold out for another six months and watch prices crash hard. Yet, I don’t see this happening. Buyers are still thinking “it’s a buyer’s market” “Now is the time” and if they get a 5-10 grand reduction from a high of 2005 they are pleased.
And should interest rates hikes be put on hold and the inventory peaks around 55,000 well you can forget about seeing any serious drop in prices. Well be lucky if we see prices rolled back to Jan of 2005.
Look at the finance headlines and stock market last week. Inflation everywhere. If you think the Fed is going to stop soon I think you’ll be disappointed.
You’re forgetting that home prices lost contact with fundamentals in 2003. So home prices will drop to at least that level. Except the economy in 2007 will make 2003 look like 1928.
No, somebody has to save all those fools with ticking ARM time bombs. I don’t think BB will let the housing market tank and the rate hikes will stop soon enough because of this reason.
You misunderstand the purpose of the fed.
The fed saves banks, not fools.
The fed will have to decide between trying to save the dollar or trying to save the housing market. The fed’s (and the gov’t’s) source of power is the dollar. So guess what the decision will be….
And I think they might even have a chance at saving it..what’s that? the deficit is at 9 TRILLION and we still are running a MASSIVE trade deficit? What are you saying? oh yeah, out year entitlements are over 50 trillion?
Disregard my previous comment about being able to save the dollar, it’s toast.
I don’t think BB is in control anymore. The bond market sets the mortgage rates, not the fed and the yield curve isn’t inverted anymore. TIPS are running at 2.5% now. Gold is at $720. The jig is up. Foreign investors are catching on.
Like the article said, who is going to buy knowing that if they wait a month, prices will be lower than they are now? People wont want to spend money on something that will be worth less the day they move in. Speculation will work it’s magic on the way down in a similar fashion as it did on the way up.
Arizona is like a row of stacked dominoes. So many people make their living on the housing market in one way or another. We’ll see about the strong job market everyone claims exists here.
That’s the most damning statement I’ve read yet in the AZ Republic regarding the housing market. However I follow the AZ Rep. reporting on the housing market and the articles are usually much kinder.
I think prices in Phoenix metro will return to Q4 2003 range, the only question is how long it’s going to take. The AZ Republic makes A LOT of $$$$$$$$ from the Real Estate industry, if you’re counting on them for unbiased news I suggest you conduct your own due diligence.
I would suggest that housing prices will get in line with income levels as they have in the past. We make a bit more than 3 years ago. Not much with inflation and housing will seek that level as it is utilitarian in reality. Here in Florida we had a double stupid with housing. Hurricanes brought in 10 billion dollars in reconstruction and flippers did the rest. If both phenoms are gone, fingers crossed, reality will soon prevail.
I’m over in the FLA thread from earlier today, you mean we have a commodities bubble already?! ha!
‘You can’t sell regardless of the price,’
That is bullsh*t. Try to sell it for $1 or $100,000. It willl get sold, idiot.
There can be markets where the price doesn’t matter and nobody is buying. I had a relative trying to sell a house in Oregon City in 2002 while a rapist/kidnapper was active.
He dropped the price again and again. No calls. No showings. No offers.
Finally about a week after the guy was arrested, he got an offer.
According to the illustrious azcentral, the phoenix / mesa area currently has not one, but two possible serial killers/rapists running around right now. That was in the paper a few days ago, but was also pulled off of the front page as fast as that real estate article. Go figure.
I moved to Phoenix a few months, the guy is slightly wrong about the effect of a strong job market. I’ve had quite a few interviews, and some offers. The most I’d make is $30-35k per year with a degree and a few years experience in my field. That makes it affordable for me…to get an outhouse in Scottsdale, right? Where real wages are at right now, it’s just not going to get you a whole lot of house with these inflated prices.
You really need 2 $40,000 earners per household if you want to be able to make those mortage payments and have a little something left over. And at least be able to sleep at night, IMHO.
Right ….that’s why the houses were always cheap in Arizona .
Agree,
prices were always low in Az because
of low wages.
And it’s why they( prices ) will drop dow
pretty fast
You average house shopper does not know what “excess inventory “means . The realtors have convinced the public that the build up of listings means you get more choices and a few incentives ,or 10% off at best . The buyers have power if they don’t bite now and hold out . As long as buyers are buying at these minor concessions on price the correction will drag out .Some of the purchases now are based on the sales pitch of getting in now before the interest rate goes up .
They are running out of idiots and idiots qualified to mortgage a 600K sh*tbox are even harder to find. Soon lenders are going to *require* 20% down, just to cover depreciation.