Phoenix Speculators ‘Move-On’
The Arizona Republic reports that speculation is down in Phoenix. “Almost 17 percent of all the people who bought homes in metropolitan Phoenix last month were from out of state. Sounds high, but actually it’s a figure that’s shrinking. A year ago, 26 percent of all the Valley’s home buyers listed their main address on property records as somewhere outside of Arizona.”
“In May, 7.7 percent of all Valley home sales had California buyers. A year ago, the figure was double that. Most speculators have moved on to other housing markets like Boise, Idaho, and Albuquerque. Or they’ve just left the housing market altogether and put their money in the stock market.”
“The potential ‘home flippers’ are buying more existing homes than new ones. People, who acknowledged they were investors on property records bought 13 percent of all the used homes to change hands last month. These buyers, some of whom can be hazardous to the housing market if they dump properties, purchased about 7.3 percent of the new homes that sold in May.”
“A rising number of homes for sale and flat or even declining prices has housing-market watchers concerned that another more lecherous wave of investors or vulture home buyers could be headed for the Valley. These ‘bottom feeders’ snatched up homes..for bargain prices in 1990 and 1991 when the Valley’s housing market crashed.”
An editorial from the East Valley Tribune. “There are some unsettling signs in the housing market. There seems to be a glut of for-sale signs. Houses are staying on the market longer. Affordability is an issue. Until recently, the Valley always has been relatively cheap compared with other home markets.”
“It’s still lower than Southern California. There’s a big gap in the median home price between the Watts section of Los Angeles ($375,000) and Gilbert ($327,450).” “But our home appreciation has far outstripped the Midwest’s home appreciation. Take for example, Minneapolis-St. Paul. In 2003, the Valley’s median home price was more than $45,000 below their median price. In the first quarter of this year, our median was about $34,000 higher than their median price.”
“It’s much the same for markets such as Milwaukee, Omaha, Neb., and Columbus, Ohio. That means anyone who moves here from those miserable climates is going to have a tough time getting as big or nice a house as they had back home.”
“At the same time, they keep coming. And they’re going to have to find somewhere to live. Of course, they can rent. But rents are going up, too. That may save a lot of investors who bought homes on the spec and thought they’d be able to flip them by now.”
‘rents are going up, too. That may save a lot of investors who bought homes on the spec and thought they’d be able to flip them by now.’
With thousands of vacant homes in the state, this seems unlikely. Especially since rents would almost have to double to cover the mid-2005 prices.
I think that tag line is thrown in as a concession to their RE advertisers.
I know you like the Oak Creek area. It looks like it is sprinkling there right now. It will be interesting to see what happens to OC RE prices after the fires are all out.
You mean this fall after half of AZ, CA, and CO has burned itself out? There seems to be no end to the fires.
I follow the blog of Steve Ilg. Wholistic Fitness. He’s there in Flag. Do you know him? He said the Coconimo (?) forest is closed altogether.
one of his fitness books is pretty good.
He kicks ass. I’ve followed his program for years now and in my 40s, I can outrun and outbike kids half my age.
No, I don’t know him. The Coconino has been closed for several days. The Brins fire is considered a threat to Flagstaff! That’s twenty miles of 75 foot high+ ponderosa pines away. The big issue that no one is talking about is what the closure of 89A will do to local economies on either end. I haven’t even heard talk of a complete opening yet.
I don’t wish ill on that area but I would love to see the speculators driven out, whether it be by fire or whatever so people who really want to live there can buy without risking their financial lives.
Ben, look at these pictures
http://indirectlines.blogspot.com/
Ivy Market Tracking - Phoenix, AZ
————————————
Single Family Homes on MLS May 30th: 32,395
Median Asking Price May 30th: $341,990.00
Single Family Homes on MLS June 14th: 33,522
Median Asking Price June 14th: $339,900.00
Single Family Homes on MLS June 23rd: 33,989
Median Asking Price June 23rd: $339,900.00
Total Asking Price (all SFH) May 30th: $15,871,248,001.00
Total Asking Price (all SFH) June 14th: $16,196,361,800.00
Total Asking Price (all SFH) June 23rd: $16,377,526,637.00
Census(2000) Median Price: $115,485.00
Asking Price Appreciation 294% since 2000 Census
Also of interest is the average asking price across the MLS, as opposed to the Median. As follows:
May 30, 2006 $489,853.00
June 10, 2006 $483,992.00
June 14, 2006 $483,329.00
June 23, 2006 $481,776.00
—————————–
I have histogram data that shows pricing distribution across the range, but no way to post graphics on this site.
How are you getting that data from? I would be interested. Do you have a data mining program or is this brute force? Thanks.
Data mining system - right now its wakes up once a week and sucks down lots of MLS listings for areas of the country I am tracking. It then computes a bunch of statistics, most of which might be suspect. But I am finding it fairly interesting example in programming.
With a median household income of $40K to $50K, it’s going to be hard to hold up these prices with lending standards getting tougher. A family making $50K can’t afford a $350K house.
Shoot! I just remembered that a friend of mine making $100K couldn’t qualify for a loan on a $350K house a few years back (and she had excellent credit). She was only able to purchase a house once the lending standards were loosened up.
I encountered even tighter standards 3 years ago from my bank. It wasn’t until I pointed out that I could almost pay cash that they mellowed out. I’ve always been amazed at the different worlds of standards out there.
What programming software do you use to do your data mining with and which MLS sites are you feeding from? Thanks
Say NO to high rent prices. Lots of reasonable rent properties out there with so many unoccupied properties.
>>>But rents are going up, too.
I am shaking in my boots about the possibility of an increase in the cost of the house that I rent in the Phoenix area if I decide to renew my lease in October. I guess that I better run out and buy at almost-peak prices as record inventory rises each day.
Seriously, there is an ample supply of vacant rental houses in my area, many of them brand new.
I do not think that the owner of the house is that stupid; the place would be vacant at least a month or two, wiping out any potential gains.
“It’s much the same for markets such as Milwaukee, Omaha, Neb., and Columbus, Ohio. That means anyone who moves here from those miserable climates is going to have a tough time getting as big or nice a house as they had back home.”
I would rather brave the cold weather there, than the unbearable heat in the Phoenix summer. At least, I can put on a coat, and go indoors. The heat would be the end of me.
I saw that too, it’s not like ARZ is complete paradise. the heat, the lack of water and the fires.
That’s the first thing that jumped out to me too. It’s one thing for a San Diego real estate agent to make that claim, but Phoenix? It HURTS TO BREATH outside this time of year in Phoenix.
There is no more miserable climate than that of Phoenix in the summer.
Most speculators have moved on to other housing markets like Boise, Idaho, and Albuquerque
A new proposal here in Albuquerque. We shoot speculators and flippers on site. No questions asked. Doing humanity a valuable service.
“…anyone who moves here from those miserable climates”
What does he call the climate in Phoenix during the summer? I’m not from an upper tier state but extreme heat is an acquired taste just as much as extreme cold is. It just sounds like a desperate way to try to spin something positive by saying look at least we’re not as bad as those guys over there or there.
Absolutely! I’m from one of those “miserable climates” (Michigan) and you couldn’t pay me enough money to live in a hot southern/southwestern state. Where I live you can always throw on a sweater and make another cup of coffee. I don’t know what a person does to cope with nine months of hot, hotter, and HOT. No thank you! I’ll take my beautiful autumn, lovely spring, cozy winter, and 6-8 weeks of warm/humid summer.
When I got in my Toyota at 2:30 pm today here in Phoenix the thermometer read 116 and “cooled down” to 112. But you know? It was less than 3 minutes that I was in the heat. Besides, the heat here is DRY. I’ll bet Sallie never ventured out of a humid state. Does not understand low humidity. Which is worse: 5 months of below zero or 5 months above 100? Answer: since there are no icy roads to navigate, I’ll take 5 months of above 100. I don’t get paid if I don’t work. When I lived in New Jersey I was terrified of icy roads because if I could not drive 30 miles to where I worked and had to stay home all day, I would not get paid. Hot Temps win. Ever hear of air conditioning?
I got stuck once in Ames, Iowa during the worst blizzard they had had in the century to date (January of 1997). I had to drive to the Des Moines airport in a complete whiteout. It was the most terrifying thing this admitted Southerner has ever seen. You could not pay me enough to live where they have weather like that. Give me 116 degrees in Phoenix every day and you’ll not hear a peep. I love the hot weather.
“the worst blizzard they had had in the century to date”
A noteable rare occurrence, something that regrettably cannot be said for the unrelenting Phoenix heat which persists day in day out, summer after rotten summer…
Well, we have had this “my climate is better than your climate” discussion before, and I just say “viva la difference”! I too love a good hot summer (swimming holes, kayaking, bbqs, etc.), but not a terribly long one. I really love the changes in the seasons. But one should be thankful for some climate negatives-it keeps out the riff raff.
I agree that in the article it seemed like some self-important Pri@#! stroking himself about how “different” Phoenix is. I love AZ (to visit), but my brother lived there (Phoenix) for two years and never tires of telling me what a sweaty he@2#$le it was. They will need all the brainfreeze-damaged snowbirds they can get to help them with that $50k+ inventory of overpriced shacks they have on their hands.
This sub-thread is a good example of why it’s never the case that “everyone wants to live here.” Different strokes for different folks and all that.
Personally I couldn’t stand the blistering heat of the desert. I’m fair-skinned and would hate to have to put on sunblock everytime I stepped outside. A lot of people complain about the climate in New England but I like it. My favorite weather bar none is the autumn in New England.
NH_renter - My husband and I had the opportunity to spend two weeks in Vermont, New Hampshire and Maine one fall. We have nice fall color here, but New England truly is spectacular. It was the best vacation we’ve ever taken - bar none!
new jersey is not cold. I live in NY, the winters are only bad for 6-8 weeks. it rarely gets below zero here. last year we had almost no snow. Nov is fine. december is cold. january can be cold but is seems Feb can be really cold. by march it’s all over. after that the only really hot month is usually august.
Pleeease. I live in Mesa and I also lived in Las Vegas, South Carolina (Charleston) and N. Carolina (Durham) and I can tell you that all this BS about dry heat is exactly that. Charleston we had 100 in the summer with high humidity and I never had a problem like I’m having here with 110+ and low humidity. And BTW, Phoenix has a lot more humidity than Las Vegas and in addition is hotter. Which makes this place a living HELL! If it wasn’t for air conditioning nobody will live in this hell hole. And if the average high temperature continues to rise like it is predicted (130 in the next 10 years), even with air conditioning nobody will be living in this hellhole.
BTW, you may ask what I’m doing here. I’m only here for a project that ends in exactly 10 months and I’m out of this hell hole.
Sorry to disappoint you, Bill, but I’ve been to places like Palm Desert and Dallas in the summer (conventions). I’ve done the dry heat thing and found it completely unappealing. Must be the Swede in me.
On the other hand, I’m 39 and only three times have I driven in snow that scared the daylights out of me - all three times in the dark. I’ll take my three bad road incidents in 23 years over year after year of heat.
But as someone else said, this is a good example of different strokes for different folks!
If weather was the only factor, it would be hard to beat the upcountry section of Maui. Low 60’s at night, middle 70’s during the day, 365 days a year. There’s my dream retirement.
I was sitting here with a smile and I see a post about Maui. Kula is the one of the best places in the U.S. for climate. In winter we get down to low 50’s. Brrr. And summer can get down right hot, up to the mid 80’s. However since we are in the lee of Haleakala the clouds form around noon. Add in the beautiful view and you have perfection 330 days of the year. I have lived in Kula since ‘67 and when I leave it will be feet first
Ahem:
http://www.wunderground.com/US/CA/Santa_Monica.html
In the words of Bill The Cat: Ththbbthttbt!
Of course, no more than four hours after I smugly typed that, a thunderstorm blows by. No rain or wind, of course, but we saw some lightning and heard some thunder. Watch out inland, this is the sort of thing that raises hell when it hits mountains.
To say nothing of the crappy air and water quality that Phoenix has:
http://www.sustainlane.com/article/884/%2322+Phoenix%3A+Something+New+Under+the+Sun.html
I wonder how Phoenix would do if it suffered the same blackout that the northeast US did a couple of summers ago.
A very nice “feel good” piece of writing. I know I feel better. Only thing I would add - the speculators may have moved on but their names are still on a lot of AZ mortgages. Bwahaha!
Pretty much my comment. They may be moving on but are leaving the homes along with their money, behind. Hope they enjoyed the experience! Adios, morons!
I agree, each report of speculators ‘moving on’ never mentions what happened to the houses. Did they sell to local GF’s? IMO the number of empty houses in brand new subdivisions prove these out-of-state guys are still on the hook. Anyone in Arizona can pick up a copy of the Republic classifieds and see what is going on.
Phoenix zip inventory: 50,562. Not including the FSBOs, some new construction and new condos. The rate of increase has been breathtaking, and shows no signs of slowing.
We’ve officially run out of idiots!! Amazing it only took 4 years!! How stupid would you feel if you closed on a house in the Phoenix metro area last month?
Are you aware of any serious (20%+ off the asking price) low-ball offers being accepted yet?
In Tucson, where I live, the insiders are starting to get occasional deals. A friend is a home inspector. He was able to pick up a two bedroom in a marginal neighborhood in need of substantial repairs off a lowball. The asking price was $175. He offered $125 and was accepted. Even with that, he’s got a negative cash flow. If he turns the garage into an apartment, he thinks he might have a small positive cash flow. And he knows how to do that kind of work himself.
He would have done better to wait, but he won’t get killed. Not a terrible investment.
These buyers, some of whom can be hazardous to the housing market if they dump properties, purchased about 7.3 percent of the new homes that sold in May.
It’s hard to image that there are people this stupid. These people are hazardous to themselves.
Really speculators buying now is like throwing gasoline on the fire and then throwing in some firecrackers. Suicide by debt.
the avg high in june in PHX is over 100, no thanks.
Today’s Climate Report from North Scottsdale’s “desirable” 85255 Zip Code:
Yesterday, today and tomorrow (actually from late May until late September) miserable, unbearable stifling heat. All residents bunkered in big stucco boxes with A/C’s running non-stop. Streets empty, golf courses
deserted, pools are hot bathtubs and unusable. After 11 long summers in this sweatbox, my advice is don’t come here unless you have a very, no,-extremely, profitable reason. Even then, it will eventually play out, and you’ll be counting the days to move out. In my case, 10 months to go, as I’ve sold house last year, renting as planning phase-out from this
hellhole. As for community ,people, etc….. fuggetabouit. Its a transient rest stop and top site for Witness Protection slugs.
Phoenix, AZ.: “There is no there, there”.
“Its a transient rest stop and top site for Witness Protection slugs.”
Wow, you must live in a horrible part of town. You may want to consider a rental more than a mile from Central and Van Buren.
Wow your comments are all so positive. It makes me regret being a life long San Diego native, I mean really it sucks.
In May, 7.7 percent of all Valley home sales had California buyers. A year ago, the figure was double that. Most speculators have moved on to other housing markets like Boise, Idaho, and Albuquerque. Or they’ve just left the housing market altogether and put their money in the stock market.”
I can’t see how it is possible for someone to go to PHX and buy a house to flip with over 50K+ of them on the market? Even if one had lived in a cave for the past few months without TV or other social contact you would think they might be tipped off by the rows and rows of for sale signs on every other street they pass? It is an incredible thought that this is still ongoing. Someone, somewhere, is sitting around thinking right this minute that PHX RE is a pretty good deal and perhaps they should buy a house to flip there or they are celebrating their recent close. What is it going to take to get these morons to open their eyes?
You think that they actually come out here to look at the house before buying? Their skin might blister in the heat. They have no idea how many houses are for sale.
Hey, if you just paid $8,000 to a late night TV guru who guaranteed you to be a millionaire by next week, and they showed you last years chart of Phoenix appreaciation at over 50%, wouldn’t you trust this guy to be your real estate advisor.
PT Barnum was wrong, California produces one sucker every second!
Three houses in my neighborhood sold in the last few months. All of them have for rent signs in the front yard. How can you buy a house for 250K and rent it for $1,220 (if you are lucky). I think things are really going to go bad in Phoenix when the intrest only loans come due on these rentals.
I’ll agree with many already posted - Phoenix weather sucks during the summer- It’s not really the 115 degree days, its the 100 degree nights - the heat never goes away! Tucson is 5 degrees cooler during the day, but 20-25 degress cooler at night- big difference. I’ve lived in both places.
I just talked with my neighbor, or the owner of the house next door. He rents it out. He bought this house 8 years ago as a rental- so far so good - In the past 4 years has bought 5 homes for rentals, refinancing one house or the other as collateral and his wife quit her tech job to be a RE broker a few years ago, and he is a janitor at the local jr high school. Every time he can refinance, he buys another house. OMG!
You’re right, it does make a big difference, in both your electric bill and level of comfort. After a summer in Phoenix, I find it hard to complain as much about the Texas heat. those 10 to 20 degrees plus overnight cooling make a significant difference.
OT - This looks like a repeat show but I just tuned into CNBCs Survival Guide…Robert Shiller and others. Did anyone see the whole show when it first aired?
BayQT~
Hmmm, and they say Alabama is hot. I live in Mobile, we’ve had hot days with 90+ temps.
But the nights are nice and cool. I open the patio door to my bedroom at night (temps 65-70), sleep well, even under cover sometimes. Haven’t had the a/c on in the BR this year.
Tucson climate is better than PHX but the job market here sux. Plenty of home for sale here, just sitting, at least the Kalifornicators have moved on! I remember here in the early 90’s, stores closed, foreclosed properties, Foothills Mall was down to one tenant. It can happen again…..
I do not mind the heat here in Phoenix as much as I dispised the cold in Iowa. We have a home in Mammoth Lakes Ca which is at 8000 feet, dry air and clear skys during the hot months in Phoenix. Phoenix has a near perfect climate from Oct through May. I visited two new retirement golf communities this weekend and found they were crowded with lookers all about our age (55). Many houses are being presold (although with up to $60K discounts). Parking lots of two popular new sfh developments in my area were filled with lookers. Two homes on my street sold this week (sale pending signs). Yet the Ziprealty numbers keep rising. IMHO baby boomers are securing their retirement homes in the sun with only limited regard for the market price direction. Working young families are pretty much priced out of the market but still want a move up home and are still looking.
“It’s still lower than Southern California. There’s a big gap in the median home price between the Watts section of Los Angeles ($375,000) and Gilbert ($327,450).”
Is this a valid comparison? Does anybody know the Watts section of LA? Also, who cares about the median, what’s the price per square foot and lot size? From what I know, the ppsf in most of SoCal is double that of an Az suburb.
I guess you could compare being shot to death (watts) to being bored to death (gilbert). Seems like they have equal value to me. I might even give the edge to watts seeing that it would at least get a bit exciting before I died.