February 24, 2006

SE Phoenix: 11,521 homes for sale: Slow SE Valley market puts listings highest in years

Ya know, starting last January (2005) or so, I started doing my own research on bubbles, manias, panics, meltdowns, etc. I owned a home in Arizona, and was thinking things were getting a bit nuts.

So I did the charts, I read my history books. I looked at days on market, the cost of renting vs. owning, the PE of housing. I looked at human behaviour during other asset bubbles. And hey, it wasn't hard, I listened to the stories from bartenders, taxi drivers, etc about flipping condos and pre-construction bonanzas. Heck, I even thought of playing that game myself - seemed soooo easy.

And I realized then that I was not only living smack dab in the middle of the biggest asset bubble in human history, that I was coincidently living IN the asset being bubbled.

So I hired a realtor, put my loft out at a ridiculous price (previous high on my floorplan was $200k a few months before, so I put it out at $340k for giggles)

And lo and behold, 12 weeks later, had a buyer.

Well, that was the top. July 2005. I tried to tell all my friends and neighbors what was happening, but most chose to ignore that advice. So I started a blog, to do what I could.

And now, folks, it can be said.

I told you so.

Here's the latest from my 'hood. This is going to end badly for Phoenix. Badly as in nuclear war bad. As in Tonya Harding bad. As in Screech from Saved by the Bell bad.

The number of single-family homes for sale in the Southeast Valley reached 11,521 last month, which, if not a record, is at least the highest number in recent years. The last time the Southeast Valley had listings in the 10,000 range was in late 2002 and early 2003, according to the Arizona Regional Multiple Listing Service Inc.

Realtors and housing analysts believe the number of listings is high because investors have begun dumping houses, home sales are usually slow in the beginning of the year and people who wanted to move held off because it was so difficult to buy another home for about a year.

And the average time on the market lengthened to 47 days, compared with four days in January 2005 and 68 in January 2004.

25 comments:

Ecobuilder said...

Keith,

Congratulations for the lucky escape from the housing bubble! But, what are you gonna do with you cash? If it's in US$, an inflation (and eventually hyperinflation) will eat it.

The best you can do to protect your money, it's just buy RE again, or land outside the bubble area.

keith said...

that's the $64,000 question. 5% savings is one thing, but not only will inflation kill it, but the dollar's impending collapse.

looking for good ideas

stock market - no way
bonds - no way
gold - too late
euros - lousy prospects

and i'm getting paid in dollars too!

ugh!

Left Las Vegas said...

We're looking pretty close to pandemonium in Phoenix. Coming soon are mass forclosures, repossessed H2s and BMWs, mass unemployment for realtors and mortgage brokers, partially completed condo building being imploded. Then after the smoke clears, new, tight regulations on real estate investing and lending.

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ecobuilder said...

Quote:
> stock market - no way
> bonds - no way
> gold - too late
> euros - lousy prospects

Agree on your analysis!!!

What's about your own business oriented on coming recession???

How about Debt Collection Agency?

Anonymous said...

keith said:

"stock market - no way
bonds - no way
gold - too late
euros - lousy prospects"

Since every asset class moves in cycles, perhaps beanie babies and cabbage patch dolls are about to embark on a new upswing.

Also, helicopters might be a smart play, since the FED may be buying them in large numbers.

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Anonymous said...

watch "absorption rates" closely. It's a time-tested yardstick for home sales. Does it prove that the Housing Bubble has already popped? You bet it has. Read more ....

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