What goes up must come down. Phoenix went up 50% in one year - will it now fall 33% to get back to the mean? Of course it will. Nice to see The Republic (finally) report on the inventory explosion we've been reporting for months.
The number of houses for sale in metro Phoenix has nearly tripled in the past year, based on December data from the Arizona Regional Multiple Listing Service. Here's why:
• Speculative investors are leaving after realizing gains of 40 to 50 percent in the past year.
• Prices are higher and buyers - including investors - are finally saying no.
• Mortgage rates have nudged higher, making housing even more expensive.
• Some homeowners who never considered selling couldn't pass up the opportunity to try to cash in at prices that are still near the market top.
The buyers are saying, 'Show me 10 more houses. They know there is a lot of inventory," said Brett Barry, a Realty Executives agent who's listing the Bilyk house. "If it doesn't pick up, sellers might have to mark down homes more than they expected to get the attention of the few buyers that are out there. The market moved 50 percent in one year. This could be the morning after
How quickly has the market changed? Bill Ryan, a ReMax agent in the East Valley, said that in June, he couldn't keep two or three active listings. Now, he has 35.
February 08, 2006
Phoenix housing market implodes - the ugliest market in the world
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It's not related solely to Phoneix but every asset has a point at which consumers refuse to pay. Why should I as a consumer pay $750,000 to someone who bought a house for $500k a year ago when my expected appreciation (5% will barely cover inflation). Matter of fact, long term house price appreciation is 1.7% above the inflation rate and since we have 3% inflation right now (MOL) we're right at historical increases, which by the way, aren't anything to get excited about. I'll keep my money in stocks thanks.
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