patrick.net

I agree, rental markets are uniquely hot right now siince people who were foreclosed on still need housing to wait out their credit repair -- and of course, would-be buyers with recency effect. These are usually sellers from the bubble who jumped ship and are still "hording" their equity, renting and waiting out the housing shenanigans. I do not think, going forward say, 10 years, that SFH rentals will be the going concern they are now, and plan to exit property management myself within that time frame.

To be fair, I also think, from a buy-and-hold primary residence viewpoint, there's really no rush to buy.

I think you might be helped by stepping back from the data a bit, Roberto. I don't see how what you've written fits the big picture.

http://www.myfoxphoenix.com/story/19532585/az-drops-to-no-4-in-national-foreclosure-ranking

As much as this report tries to be cheery, the fourth graph on Page 2, showing houses held off the marke,t shows we're at 4 million houses being held off the market. What's that about? I think the system is still being gamed. Be careful all you small-timers, and we're all small-timers, the big money is in control.

http://portal.hud.gov/hudportal/documents/huddoc?id=sept_nat2012_sc_final.pdf

JodyChunder says

To be fair, I also think, from a buy-and-hold primary residence viewpoint, there's really no rush to buy.

This is my viewpoint until recently. I used to think it is better to have the flexibility in case I lose my job. Now I figure maybe it is better to "own a loan" so that I can squat for two more years. Talking about a messed up sysem and the influence on me... The key is whether I can get a 3.5% down payment FHA loan.

ptiemann says

I was part of a transaction where the seller -- overloaded with debt

This is another post, or comment from you that strikes me as unprofessiional.

You seem intent on giving Real Estate agents, and the Real Estate profession a bad name.

Sheesh people, stop with the ad-hominem attacks. There are two sides to every coin and I for one want to see both. Some people are investing in this market and others are very bearish. No need for insults.

Good story ptiemann.

SkyPirate says

Sheesh people, stop with the ad-hominem attacks.

Yeah, no kidding all you stupid motherless motherfucking shit turds from hell -- enough with the ad-hominem!

SkyPirate says

Good story ptiemann

It may be a good story, but a Real Estate agent shouldn't be telling it.

OK, as long as I'm here, the story of the Honest Info is interesting because I have the same discussion here in Seattle about foreclosures, where they are, and who is buying them, especially in condo projects.

It all starts out great with fantastic returns, but one foreclosure leads to another, and more units become rentals.

The guy here in Seattle has lease optioned some units, but those came back because there is no financing available for the buildings. In another building there was a shooting and property values went through the floor.

OK, so he has the income, and is also shopping in Nevada, his home State. Nevada is doing better, but we also discuss the fact I have always been able to buy a 3 bedroom one, and a half bath home with a pool in Las Veags for about $125K. People sold off behind, and moved into newer, nicer homes for roughly the same price range. In other words, for decades the housing market was kind of slow, no one cared, and people moved on.

In 1998 it all changed, and prices began to creep. In 2003 prices exploded.

So today, when my buddy tells me he just bought a screaming deal in some Henderson sub division for $125K I say so what?

The mortgage rates also play a big part. My cousin in Dallas just refinanced their house - 15 yrs for 2.75%.

I can't believe rates are that low. Plus with Dallas and Phoenix prices, the payment is going to come to very low levels. In CA, if the prices were down to 200-400k for good houses, the hosuing market would be very robust at these rates.

Who the hell cares for Phoenix prices? That market crashed hard and is unlike nearly every other RE market in the nation that's not bear Detroit, Las Vegas, or Florida.
Phoenix prices have absolutely no friggin bearing on prices in California. None. So I don't care. Good for you that you did so well. You had an incredible opportunity. Congrats. Now stop bragging!

Phoenix area

for sale: 5,777 results
Pre-Market: 7,804 results

Source:zillow

Quigley says

Who the hell cares for Phoenix prices? Phoenix prices have absolutely no friggin bearing on prices in California.

Who said they did, and what does California have to do with anything? Lots of people care about Phoenix prices - it's one of the largest metros in the country, duh.

This is a housing board, not a California housing board. Don't read the Phoenix threads if YOU'RE not interested in the Phoenix market trends.

Seriously...

Regular Sales Will Rise.

Hi Roberto. How are the acquisitions going? I'm closing on another place Tuesday - but not Arizona. Good inventory is hard to come by.

In other markets I am seeing a resurgence of regular sales.

As prices rise there are owners who were underwater but not willing to do a short sale flooding the market. Many are overpriced as owners put their houses on the market for what they owe - not the current market value (list and pray).

I haven't seen this in the PHX market yet as the price decline was more severe and most who bought at the peak are still underwater. If prices keep rising you will see some - people who put down a lot or people who bought before 2001.

Where I am now the flood of regular sales have dampened demand for distressed sales. Hence I am picking up a few bargains here and there.

I do think there is still a lot of inventory underwater in Phoenix. So I see foreclosures / shorts continuing for at least 3 or 4 years. Their impact on prices will be less as there are many more 'investors' than there were in '09 or '10 willing to buy anything that looks remotely like a bargain.

Barring a fiscal cliff tragedy, I think prices will continue to itch up close to replacement cost.

War says

RobbertoRealtor.... you're deleting posts to supress the truth about housing. Why?

Indulging in your usual deleting routine, I see.

War says

Yeah. It seems roberto wants to surpress the truth about housing by deleting.

I have to say it's rather strange of Patrick to allow him to delete your posts. I guess it's his next step seeing as you always circumvent his bans.

War says

Rather strange? It's one of the benefits of paid membership. Maybe we should become paid members so we can delete your posts. hmmmm?

Oh, but Roberto doesn't have one of those lovely gold stars under his name. Clearly he's been given special dispensation to remove every single one of your posts after other people have already quoted and responded to them. Power indeed.

You are underestimating CA sales taxes a bit there. They've recently raised them.

This state only knows how to take all our money and hand them over to the greedy unions.

War says

Uh huh.... And you can ask $50k for your used honda civic too.

I'll take it! 50K today when it could be worth 100k in 500 years at today's asset appreciation rates. My grandson's grandson's grandson's grandson will be rich I tell yah. I can't wait.

Robert Shiller: We might see a housing bubble in some cities. Notably...we already, looks like there's already in Phoenix and San Francisco...

http://www.youtube.com/embed/v8Rrrs9zEM0

Even though this is the Press Release, not the report, I like reading about the info from the source of the info.

http://www.standardandpoors.com/indices/articles/en/us/?articleType=PDF&assetID=1245343891446

Personally, I have NO fears about the fiscal cliff in 2013. The can will get a big old kick at 11:59:59. I can't believe that anyone actually thinks that our inept government would pursue any course of action other than this. The republicans are retarded, but they are not so stupid as to disrupt the status quo in any meaningful way. Same goes for the democrats. They can both feign disagreement on various fiscal talking points and then get uncle Ben to make some power moves to avert the reckoning for another year or two. Then the circus comes back to town for a repeat performance. I agree that at SOME point we may finally go off the cliff as it looks like an inevitability, but I think that the status quo will be maintained this time around. All the huffing and puffing by our "leaders" is for show, I think.

Out of curiosity, what will drive the "inevitable" house price appreciation? I agree that it is inevitable if inventories stay way below historical norms like they have been. Are we in a new paradigm where housing will be dominated almost solely by yield-chasers and the individual owner-occupier no longer participates in a meaningful way?

1. I happen to work in high-volume consumer electronics development/manufacturing. Automation won't bring jobs back here. The entire supply chain is in Asia and it is not moving here. I'd prefer it stay there. Anyone that has actually been to industrial China would. As much as Steve Jobs was a big asshole, he was dead-on when he explained to Obama why we will never produce iPhones in the USA. Supply chain. Automation could cut the production cost in half, but consumers would still pay twice as much because of the logistical problems that stem from getting all of the raw materials there to factories here.

2. Possibly. If Asia is willing to pay more for the energy than America, it will all be sold to Asia. It will go where there is the most profit, without regard for what is "good" for America.

3. Where will these "displaced workers" find employment? If you are educated in something useful you have a shot at a "better" job. Maybe if energy takes off like you say there will be job growth there. Outside of FIRE and service sector jobs that produce little-to-nothing, I am not sure where job growth will come from.

4. Convenience is, and will continue to increase. No argument here. It's all trinkety crap and no meaningful innovation. New applications of mostly existing technology. Maybe working in the industry has made me jaded, but I don't see any real human "progress" in the perfection of disposable consumer goods and the proliferation of web-advertising (*ahem* social media). Keep buying it though, it puts food on my table!

As far as I can see, the bulk of our economy is fueled by consumption which is easily outpacing production. I don't see how it is sustainable. Maybe I am totally wrong and will realize it in 5 years, I don't know. Everyone thinks that their generation is at the helm of a ship that is about to sink. Maybe the idiocy that I see rampant in every corner of our nation has always been there and is just more visible thanks to the internet, I don't know.

Phoenix market sure turned on a dime. I guess a 20k condo is not a sustainable price when a CD pays 1%. Pretty simple looking back...

Will never trust a businessman when he uses the word "honest" in a sentence.

E-man says

Has it never been a housing bubble in the Bay Area?

This is the latest one.

U6 is 15%. We have a japan style ZIRP in place with trillions in money being QEinfinity keeping the joke afloat.

This place is a mess. This is the end of the middle class. If housing pops again, it will break the back of the pack mule carrying all the freight.

Denver didn't get whacked like Phoenix did, so we can't expect the same kind of increases, but prices are up, inventory is down, and correctly priced houses are gone in a few weeks (if not during the first weekend). My Redfin notifications (on my iPhone app) have been going absolutely insane over the past 2-3 weeks. Lots of activity. I got lucky to buy when I did (just 1 month ago).

Denver's prices make no fucking sense right now.

Phoenix is a place that will never ever be worth it. Doesn't mean few people won't make their money doing rentals or investors won't flip stuff to each other back and forth until someone is left with the empty bag, but overall it's a has been kind of like Detroit.

FortWayne says

Phoenix is a place that will never ever be worth it. Doesn't mean few people won't make their money doing rentals or investors won't flip stuff to each other back and forth until someone is left with the empty bag, but overall it's a has been kind of like Detroit.

People flip houses and do rental investment at about everywhere on earth but it is hard to see the similarity between Detroit and Phoenix.

What happens when water wars change the price of water in desert areas? Let's say there's a long term drought, 10+ years, where the price per month of water goes up to say...$300/month in desert areas?
If landlords try to pass the high water price on to renters, the renter will just move away. For owner occupied, they are more likely to stay because it will be harder for them to sell into a crashing market.
After 10+ years of drought and high water prices, the outlying areas of Pheonix will look like ghost towns. With fewer people in the Phoenix area, the price per houshold of water will probably decrease, allowing the remaining people in the city center to stay. But they probably will pay $100 or more per month for water.
I'm sure you have alot of arguments against this happening and why nothing bad like this could ever happen to Phoenix (or you).
Good luck with that.

Water wars sounds like a great movie!

The RE bears are now inventing fiction since no facts support future price drops.

I waited too long to buy back in. Was lucky to buy last year. When i sell my house for 1.2m i will be sure to logon here with the news. Then retire to AZ where i can carry a gun everywhere like the old west.

It's happened before, it most likely will happen again.
http://www.thedaily.com/page/2011/02/19/021911-opinions-history-hooverdam-farrington-1-3/

I'll take real estate advice from a realtor when I take diet advice from Willy Wonka.

PockyClipsNow says

The RE bears are now inventing fiction since no facts support future price drops.

As much as sales data may mean something to a buyer, those aren't the facts. It's the principle of the greater fool, and we just saw that in 2006, and 2007.

I don't really know what perma bear means, but I do know there has been a long term strategy of Real Estate market timing. You buy when people are selling, and sell when people are buying.

That market timing has, in the past, been based on a decade long cycle such as between 1976, 1986, 1996, and 2006. Those were good times to buy except that 2006 thing.

Between 1998, and 2003 the Real Estate market changed radically, and globally. It wasn't just here in the good old USofA, it was Europe, Asia, and Africa. After the crash in 2008 South America then took off as the emerging Real Estate markets.

While people here blame our government for the change in Real Estate it doesn't explain what happened in the other markets until you look at banking.

Real Estate is always a good investment. Owning rentals is a good investment, but the strategy has changed. The Housing Industry has changed.

The economy has changed.

Banks are in control of large blocks of property. They are selling today for a premium, have cleared the books of dead wood, and they may well be done. I think banks will pull out of Real Estate next year 2014, from what Bernanke has said about the Fed.

Some properties will always be good, some other will adjust according to what the market will bear.

Because of that volitility I would rather have my money elsewhere right now.

So, I don't know if that is a perma bear position, because I own property. I just also know that we will sell another place this year rather than rent it out, but keep the commercial property, and land.

While I was writing this the Dow broke through the 2007 record high. How about that Dow? In terms of short terms gain, what about those that bought in 2008? or even last year?

I understand about the leverage, but still something has changed in terms of investment.

PockyClipsNow says

Water wars sounds like a great movie!

The RE bears are now inventing fiction since no facts support future price drops.

I waited too long to buy back in. Was lucky to buy last year. When i sell my house for 1.2m i will be sure to logon here with the news. Then retire to AZ where i can carry a gun everywhere like the old west.

Sounds like a plan. Fortunately or unfortunately, I cannot find any house selling 1.2 M in the future at where I live. May need to find some other ways to get some money to retire in AZ.

David Losh says

As much as sales data may mean something to a buyer, those aren't the facts.
It's the principle of the greater fool, and we just saw that in 2006, and
2007.

Like it or not, this IS the game nowadays. You can choose not to play the game but it does not necassarily mean people will all lose shirts by playing it.

Mobi says

this IS the game nowadays

That's exactly what I said, but sales data isn't the game. Real Estate is a long term hold.

robertoaribas says

6 million people who bought in 2006 can tell you that,

It depends on the deal, doesn't it?

Just because a house sold for $300K doesn't make it worth that, it may well be worth only $80K. Then to tell me a person will rent that $80K investment for $1100, doesn't sound like a good thing either.

In your own scenarios you make it attractive to buy rather than rent, so that is also a contradiction. Why would some one pay you $1100 going forward?

It depends on the deal. You are talking blanket mathmatical formulas, that don't seem like sound advice.

Actually we will see soon enough, because like you, I'm usually right.