You know, I actually feel sorry for folks who, because they're about to close on a house, feel motivated to write to the media to tell them shhhh... no more bubble stories... you'll blow it for everyone!
Letter to the Editor - Arizona Republic
No housing 'bubble' bursting in the Valley
May. 27, 2006 12:00 AM
I see an awful lot written about the real estate "bubble" bursting, but I've yet to see evidence of this happening in Phoenix.I'm buying a home in Buckeye, a town that has seen a 4 percent increase in sales this quarter compared with the same time last year and where price appreciation has increased every month during the past three months.
In the overall Phoenix market, inventory is up more than 10 times year-ago levels; prices are up 70 percent over 2004 levels; yet sales dipped only 7 percent in the first quarter of 2006. Is this evidence of a bubble bursting? I think not.
The media's bubble talk could become a self-fulfilling prophecy. It's easy to write about the doomsday scenario because it makes for dramatic reading, but the problems start to arise when it has no basis in fact and readers actually start to believe it - much like the overhyped Y2K bug.I would like to see a thoughtful, sane, rational article about the real estate market that looks at the actual numbers, breaks them down, and tells us what they mean. Is that too much to ask?
- Sonny Shrivastava, Tolleson
May 27, 2006
Ignorance still reigns in Phoenix: No housing "bubble" bursting in Valley
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16 comments:
another letter:
Greed makes homes all the less affordable
May. 27, 2006 12:00 AM
Recently, I went looking for "affordable housing."
Now, I know we have lots of things on our minds right now, and housing really does not seem to be a hot topic. But come on.
When does greed get the better of even our common sense? For example, one investor bought a home back in February for $93,000, put maybe $10,000 to $15,000 in upgrades, and now the seller is asking $165,000 - in a questionable neighborhood!
I've read the articles about bidding wars. Hmmm, I wonder why?
We hear of people living at home even into their 30s and 40s. Some, yes, are only taking advantage of the situation with their parents. However, every day more people must choose between moving in with their parents and moving into the streets!
By God's grace, I have a roof over my head, but I would like to buy a house. How are single people trying to make a better life for themselves going to make it without a chance to own a home in a safe, comfortable environment? - Beth Sims,
Phoenix
and my response letter:
My response:
Dear Editor;
In response to the 5/27 letter to the editor entitled "No housing 'bubble' bursting in the Valley", I would beg to differ.
Not only has the housing bubble already burst for Phoenix, it will now explode so hard and so fast that the Arizona economy make take years to recover.
I submit:
According to ZipRealty, listings in Maricopa County are now over 45,000, up 394% from a year ago, and growing daily.
38% of homes for sale in Phoenix have had their prices reduced (again, according to ZipRealty)
According to the RL Brown Housing Market Letter, sales are down 22% for Phoenix in 2006 from the same time last year, and there are a "wave of cancellations"
According to Catherine Reagor of the Arizona Republic, "1 out of every 3 dollars is tied to the housing economy in Phoenix".
This rapid fall in homebuilding and home buying will send a wave of unemployment through Phoenix, meaning even less home buying and homebuilding.
Phoenix was beset by investors and flippers in 2004 and 2005. They're now gone, and Phoenix homeowners are left holding the bag - the bag of depreciating home values for years to come. That's the reality, no matter how much some do not wish it to be so.
- Sonny Shrivastava
__________________________
Please go back to India! The call center phones are ringing off the hook!
Reality is setting in. . .
I am pleased to say that some reality is setting in here in California. . .people are no longer talking about making money on houses, they are admitting that the housing market is "soft," "slow," etc. I guess 10 for sale signs on one street (with a few price-reduced) is starting to register.
Sorry to say, I see this attitude among younger people I know, or new arrivals who have not lived through a real estate boom-bust cycle like I did in the 80's.
The guy is very mis-informed because even though inventory is up 10 times, sales are only up 4%. He does not realize that real estate markets have sales slow downs before the big price cuts, and the big cuts occur when people who bought are forced to sell. In the past job losses caused it, but this time toxic financing will be the initial driver.
Also he is comparing year over year figures which is what the real estate industrial complex shows, not month to month.
Dear Keith,
There is no Bubble in Orlando, Florida.
But it "could reach a level of softness that few local sales agents have experienced, said Belton E. Jennings III, chief executive officer of the Orlando Regional Realtor Association."
See: The Orlando Shilltanel Newspaper Article:
http://tinyurl.com/o52l2
That Strivastava person is an idiot. Sure, let's just look at sales in a vacuum, and forget about the exploding inventory as well as the basic laws of supply vs. demand.
Sending editorials to the major newspapers will help wake them up to the reality, backed up with facts.
Anonymous said...
" -Sonny Shrivastava
"Please go back to India! The call center phones are ringing off the hook!"
Ha ha ha. Anonymous must be a Dell customer. The real problem begins when someone actually answers.
Google "Sonny Shrivastava drag queens"
well, at least his/her new neighbors should enjoy the parties
he he he
What is the inventory count at now in Phoenix? 45k or so?
What amazes me in this letter is the reference to the Buckeye corridor. Just like the Hunt Hwy corridor in Queen Creek ,it is very bad. I drive to these places frequently and see the real estate disaster in living color. Parked earth movers , and other signs of slowing like lots of for sale signs. Buckeye is a obvious sign of overbuild. No window drapes in half or more of these homes.
ZZZZZZZZZZZZZZZZZZZZZZZ
ZZZZZZZZZZZZZZZZ
Sleep tight fools ! Should have come to HP and learned something!
"In the overall Phoenix market, inventory is up more than 10 times year-ago levels; prices are up 70 percent over 2004 levels; yet sales dipped only 7 percent in the first quarter of 2006. Is this evidence of a bubble bursting? I think not."
Have you ever heard of the law of supply and demand which drives prices?
David
Bubble Meter Blog
Does Sonny think the 46,000 available units will be absorbed in Phoenix magically? With inventory rocketing up, it's an sustainable trend. With combination of all statistics, it's a sure sign of a burst.
This person will not be convinced for another year I bet. Many will be in denial until 2007.
Phoenix is fucked in the short term, and we're too ignorant to realize it.
I live here, and I am amazed that reality still does not sink in with these twits and their ignorance of the basic economic law of supply and demand, elasticity of prices, etc.
Long term it will be fine, since 100K people still move here every year, and they need to live somewhere.
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While I'm flattered that all of you have made me a topic of discussion, I'm not quite sure where all the hostility is coming from. By quoting statistics, I've been labeled a "twit" and told to go back to India. What is the age of the average poster on here, I wonder?
The point of my letter was to fire back at those screaming about the doomsday "bubble bursting" scenario by citing statistics that showed the contrary to be true. Since when is it bad to question the hype with solid statistics?
Valley-wide the numbers indicate a softening rather than a crash. Prices in some areas are down 1 or 2 percent, while other areas are up 2 or 3 percent. We're in July, people... a price drop of 1 to 2 percent in some communities can hardly be considered a crash.
Where you see a "crash" is in new build communities where the builders kept outpricing the market despite the slow down. In the last few months you saw those same builders drop prices by $40,000-$50,000, or give big money incentives towards upgrades, or mortgage rate buy-downs, or in some cases a 12% commission to realtors.
I certainly don't consider myself ignorant, and I don't appreciate the name calling simply for expressing my opinion. Those clamoring about a crashing market would do well to cite local statistics backing up their positions. Otherwise it's just another opinion, and you know what they say... opinions are like *ssholes -- everybody has one.
Cheers!
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