Here's Phoenix listings via bubbletracking... It's amazing to see over 100 houses a day pile up on this list. Wonder when (not if) we'll see 50,000 listings? Wonder if we'll see 100,000 total one day?
I wonder if any market in US history has ever seen anything like what's going on in Phoenix. And you have to wonder yet if the regular Joe in Phoenix has any idea what's going on as well - as he lists his house at the price he "deserves" to get because that's what his neighbor got in July 2005. Yet there's no showings, there's no traffic, and there's no offers...
This is how the world will end. Not with a bang but with a whimper. Listings will continue to grow and grow and grow like kudzu on an Alabama highway
Asking prices will hold, and sellers "deserve" to get their price (or so they think). Then reality will set in (after denial) and panic will ensue...
7/20: 10,748
7/30: 11,656
8/20: 14,321
8/30: 15,042
9/10: 16,716
10/10: 20,073
11/10: 25,387
12/10: 27,649
1/10: 28,790
1/20: 31,457
1/30: 32,512
2/4: 33,446
February 06, 2006
With these numbers, I'm actually a bit sad for Phoenix homeowners
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12 comments:
I think 100,000 is impossible because it is much like the buffered system that keeps a minimum on market. Thousands of sellers will delist in the face of competition just like marginal sellers were lured in at low inventory levels.
I'm thinking about starting a "staging" company. For open houses we'll roll in a realistic looking hot tub and some good looking teenagers to sunbathe. We'll slap a plasma on the wall, maybe even the cieling in the master bedroom. We'll bring in little bottles of fresh bread and cookie smells to waft.
The only houses that sell in Phoenix over the next nine months are going to be chilled to 54 degrees and come with a fully stocked wine cellar.
brilliant. seriously, brilliant
plasma tv's sell the place. you should see london - the rentals are all furnished and when you see 'em, plasma tv's everywhere, a piano maybe, nice linens and bedding.
then when you go to rent it, they take all that stuff out. leave you with the couches and a crappy mattress.
marketing, it's all marketing.
Do these numbers reflect the snowbird cycle? As we all know Phoenix has a larger winter population so their sales season begins earlier because by the time it really heats up a good number of people want to be out of there.
keith, I don't know if you know Prescott at all, but average new listings on the MLS for the last several days have been...50!!! That's amazing for a tri-city area that has a population of about 100,000.
I dont' feel sorry for them, especially the greedy ones' who expect to become millionaires off everyone elses' back without doing any of the work themselves.
How long will it take until the builders and contractors will get the message ?
I am priced out of the market, I can just frame the blueprints on the wall and watch them sipping gin tonic. At least I have the lot..
Current bids are twice I wanted spent two years ago on the construction and 33% more I should realistically borrow. I hope my time will come
Dave
Once builders are not busy, they'll be calling you, anon!
The Sky is falling! Really. I believe home prices across America are way out of line but please, you ignorant and blind self-centered Americans! Check out the cost of living outside the USA and where incomes and job growth are so much less. Even in Mexico it is Rich vs poor. And with Keith in Britain, makes Phoenix look cheap aye?
Becafeful what you wish for since if the world USA goes into a depression so will the world and you won't be able to rent if you don't have JOB.
The problem isn't price it is income and the USA hasn't helped the poor and middle income people's income rise to off-set the higher home prices. And since low interest rates have helped many buy homes there are fewer renters so depressed rent prices. So you want to rent? Well I'm sure there are lots of investors out there just waiting for you and the price will go up. Even if home appreciation stays flat for 10 years that doesn't mean rent costs will stay stagnant. There is inflation after all and at 3% in 10 years that is a 30% rise in price just to stay FLAT.
And for most of those people who overpaid? Well I'd say that less than 20% of the homes sold in the past three years fall into that category. I hardly think those Californians who moved to Phoenix after having cashed out of their awful homes and came here with $300,000 in cash didn't put a major portion of that money down to make their payments affordable...which with 20% down is affordable compared to comprable size rentals and incomes will hardly panic if prices fall.
Look at the article the other day about investing $1 in the DOW in 1930 and today that dollar would be something like $2400 but adjusted for cost and inflation was really only $400. People just don't get the power of inflation and the government's need to monetize the debt to adjust for real value and cost. Just because gold sold for $35 an ounce in the 30s doesn't mean it will today.
And yes, many of us house bubble bloggers can come to BELIEVE our own point of view as we reinforce it with unrealistic comparisions and numbers and simplistic thinking about economics and the diverse market (location, price per sq ft, cost to build, inflation, size of homes vs median price over the past 50 years etc).
I was excited when I first found this site and it resonated with many of my feelings aobut home prices but after reading for several months I've come to abhor the twisting of facts. I feel like some bloggers are like those radical Islamists who fan the flames over Muhammeds image by manipulating the facts and dam be the consequences.
Wake up and be rational and look at both sides of the issue and don't make it such a black and white one. I think most of you must be envious Californians who missed the easy money and want to see the State of California burn.
If you buy a home not an investment, if you put 20% down and stay within a price you can afford on your income with the right income to debt to mortgage ratios you don't have to panic. Don't make an emotional investment, pick location and value, don't pay over $120 a sq foot for a fully loaded house in a great location (though many say $150 is the minimum in dense urban environments to even start to be realisitic for cost) and just work, invest, save.
Oh and you think putting your money in emerging markets and Euro's will save you? Keith tell them about the European bubble and debt and high cost of everything from petrol to food and see if that is any safer place to invest. American's would hit the street and riot faster over $8 glasses of beer than paying $350,000 for a 3300 sq foot house.
Well I don't know what low-class crowd you hang with but statistics and averages don't cut it in my field. Everyone I work with and all my personal friends are doing quite well and we are not the "the super rich". Every person I work with, save the few that clean the floors or work in the kitchen and are mostly migrants, each have average household incomes of over $100,000 on the low end and many of my friends earn (with two incomes) $130-200,000 a year and the professionals above us earn two to three times that amount.
Most of them own $500,000 plus homes and they are very affordable to them. I have a six figure income and choose to live more simply (no judgement against those who choose to live more extravegently if it isn't credit driven) and have no debt and would never pay $3,000 a month or more for a house or rent.
American incomes are rising, though not as fast as they should, and so is inflation. In 20 years American's will have twice the income of Europeans and it is a lot less expensive to live in the USA than there (I've lived in Europe).
The only reason some areas see lower rent than home prices is because of the high number of home owners (some 60-70%) in markets other than places like California though I imagine the fact that so few can afford to buy a home there doesn't reflect that a large number of Californians own their homes and owe much less than the current sales prices.
In Austin where I am building my current home it is less expensive to own than rent. I'd have to pay at least $1,000 a month more to rent the same house that I'm building. And to compare it with the house I sold in Phoenix, three times the house. While I've been building the house (for 11 months) my rent here in Phoenix is higher than my mortgage payment will be in Austin.
Most of the bloggers on this site need to get a taste of reality and see what it is like overseas. In Karbul a 1/2 acre goes for a mil in a city with no infrastructure. Want to see expensive? Got to London or Barcelona or Rome. Yes, you can find places that are affordable if you consider 800 sq ft in a bad area at a price of two weeks pay affordable.
And for those who haven't lived in the 70s where stagflation was the norm don't have a clue about how incomes and jobs can stagnat and prices can soar. Where do you think California's house bubble got its start?
Homes are more affordable today than in 1980 and in many areas of the country home prices adjusted for inflation are just now rising to the level they were in 1980 only more affordable as a percentage of one's income.
As I've mentioned in other comments I've lost a lot of respect for a site that has become "Fundamentalist" in its attitude and attempts to only give "testimonies" (like in church among believers) that only reinforce the fundamentalist view of a major house bubble and imminent collapse (gosh, when did you say Jesus was returning?).
Only when people truely discuss value, compare apples with apples, recognize that some markets are over heated and need to correct but that in those markets not everyone that owns a house is hundred's of thousands under water since most paid a lot less than what the average house in those area's sell for, and that you can't compare a 1962 1000 sq ft house with a median price of x with a 3300 sq ft house in 2005 with a price of y.
This site isn't a place of rational discussion on value and isn't a site that most commentators are interested in anything but promoting fear and "irrational exhuberence" in reverse.
There is a lot of money in this country and a lot of peope with a lot of assets in their 401s, pension plans, military/government pensions added to thier incomes from good middle class jobs and because you or someone you know may be over extended doesn't mean all of us are.
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