FINALLY!!! Catherine Reagor, lead housing bubble reporter for the Republic, still too fond of using realtor quotes, after numerous emails from yours truly at Housing Panic, FINALLY reports in frank terms the housing panic underway in Phoenix (thanks Eco). Of course, no mention of HP or housingbubble2, even though I've gotta believe she's reading...
10% decline though? I don't think so. We're going down 20%+, and I'd predict all the way back down to pre-bubble, which means a 33% haircut to wipe out the 50% bubble gain last year.
Had to interrupt my vacation for this one. I couldn't be happier to see the MSM actually reporting the story. This is a sea change. The panic that this article will cause in Phoenix will actually speed the declines now. Phoenix HP'ers - please report any reactions from the ground.
You can email your regards to the reporter here or catherine.reagor@arizonarepublic.com
How low will it go? - Home prices may dip 10% as fear grips Valley market
Catherine Reagor The Arizona Republic Jun. 18, 2006 12:00 AM
Greed drove metropolitan Phoenix's home prices and sales to new records in 2005. Fear is driving the market this year.
Home buyers are worried about paying too much and are waiting to purchase. Concerned about dropping home values, some owners are trying to cash out. Builders, struggling to sell even deeply discounted new homes, are scaling back production and warning of lower profits. Each day more people, from contractors and mortgage firms to real estate agents, are losing jobs or money in the metropolitan Phoenix's rapidly slowing real estate market.
Until recently, the market's slowdown had been considered a necessary, short-term hardship to offset last year's wild run-up in prices. But now many analysts and economists say it looks as if the slide will continue for at least the next six months, possibly pulling down home values as much as 10 percent before it's done.
"There's a psychological umbrella of fear in Phoenix's housing market now," said Tim Sullivan, a national housing analyst with San Diego-based Sullivan Group. "Buyers are uncertain."The big question is, how much more will the market slow?
The only people who will really be affected are those who purchased last year, when there was fluff in the market," said Elliott Pollack, an Arizona economist and real estate investor. "But they will be OK if they stay in their homes for a little while."
"My sense is the worst is behind us, and the housing market will have stabilized with smaller jumps in listings and more steady sales by October," said John Foltz, president of Realty Executives.
June 20, 2006
FLASH: Arizona Republic finally reports the truth about the Phoenix housing crash underway
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72 comments:
Live in Phx almost 18 years. What jobs? There are not well paying jobs in Phx. This place is based on RE speculation and tourism. That's it. Add thousands illegals and you can see the picture.
"But now many analysts and economists say it looks as if the slide will continue for at least the next six months, possibly pulling down home values as much as 10 percent before it's done"
probably a innocent typo, should really read six years and 50 percent
In terms of an once of gold. The phonex market is booming
Dear Mr Kieth,
I write to you to confirm our deal. I will post under 8 IDs to keep your blog alive and will. You will inturn pronoune the housing bubble to end 12 weeks from today.
Phoenix is a land of small people with big egos and huge mortgages who Heloc'ed themself to death. This whole market implodes soon.
Keep your gold. Just look at the market for the last 5 years. Gold always drops between june and August. Just go look at the 5 year charts and see where gold ended up by the end of each year. Here's a chart.
http://www.usagold.com/analysis/doldrums.html
I have totally clueless neighbors in Mesa asking 249K for a 3 bedroom.Bought for 160K in 04.
Another in my neighborhood on market 7 months for similar price. Stupidity is amazing.So many people are going to wake up soon and see the writing on the wall. SCREWED!
"The only people who will really be affected are those who purchased last year, when there was fluff in the market," said Elliott Pollack, an Arizona economist and real estate investor."
*****Hate to break it to you Elliot, The Titanic is sinking and you're screwed. And the band played on.*****
"My sense is the worst is behind us, and the housing market will have stabilized with smaller jumps in listings and more steady sales by October," said John Foltz, president of Realty Executives.
***** Another unbiased view of the market. *****
It would be interesting to see what homesellers are thinking.
Just as I had predicted, the first acknowledgements of the housing bubble in the MSM include the view that the worst is behind us. According to Ben’s essays on the great depression (this book should be required reading on this blog BTW) they said the same thing in 1930. The worst is certainly not behind us. They said the same thing about Katrina before the levies breached.
The worst will come after the bulk of the adjustable re-adjust in 2007. Do you think you see a lot of open house signs now; just you wait till 2007 when "Joe-just-worried-about-the-monthly-payments" finds that the monthly payments due on his interest-only just doubled. Then the foreclosures will start, the banks will take a hit, tighter lending practices will be enforced, and easy money will end. When the dust clears we will be looking at Y2K prices (that’s on real-estate not webvan.com).
10% fall?
Worst is over?
I doubt it.
John Wake Home Market at a Glance commentary on the Phoenix market. As honest as a person can be when they are a realtor.
http://tinyurl.com/rusdv
To Thinker:
You missed the fact that the stock market is telling us we will be in full recession in Q4, the layoffs that come from this will make the ARMS look like a picnic, the panic will start, and Phoenix will be declared a Superfund Site.
Fla will be just a bad. My homeowners Ins was just cancelled due to hurricane losses (and I never had a claim). Ins premiums are jumping 75%. $2100 to 3800 a year. This will kill housing, since its based on monthly payment.
And only FOUR days away from 50,000 homes on the PHX market!
According to Ziprealty.com. . .about 100 home a day are added. . .yesterday reported at 49,600. . .Friday may be the BIG day!
AND San Diego has over 22K on the market . . .Friday may be the "population adjusted" record. . .old 1995 record was passed months ago.
" And only FOUR days away from 50,000 homes on the PHX market!
According to Ziprealty.com. . .about 100 home a day are added. . .yesterday reported at 49,600. . .Friday may be the BIG day!"
Yikes! I plan to post about this. Do I hear 60K?
Albuquerque's next to fall. With Denver to the north, and Phoenix to the west, it'll be soon. There are currently 191 houses listed in our old zip. Up from 119 in march.
>>>Clayton said...
John Wake Home Market at a Glance commentary on the Phoenix market. As honest as a person can be when they are a realtor.
The charts are interesting and acknowledging that the inventory is a record, etc. is nice and everything, but the guy is in full spin mode on other parts of the website:
Reagor's article seems to have worried a client of mine. I bet a few Realtors got a few emails about it.
That 10% decline was the main point of the article. In fact, it was the subheading "Home prices may dip 10% as fear grips Valley market." That subheading was just irresponsible.
A 10% decline this year is simply not in the realm of possibility.
Also:
Right now, the median home price in the Valley is higher than it was in January, see the chart I posted on June 16th. The median home price may fall a bit by the end of 2006... but by 10%?!... that's just silly.
And:
This fits my view of the Phoenix market - little likelihood of lower prices as long as the economy remains strong. After the overhang of investor properties are digested into the market, prices will strengthen.
http://tinyurl.com/fer2n
Last anon go f.. yourself. You are the shill for RE complex.
i moved to phoenix last year amid the chaos. i knew instantly it was all bullshit. people buying shit stucco boxes in 60mins just b/c some loser realtor told them to. Cali morons buyiing sight unseen over the internet. I rented as a result. Now, i don't even know if i want to live here anymore. for what? for overpriced shit houses, and now the low prop taxes i moved here for will be raised b/c of the flipper fuckfaces. I am thinking of even moving out of here. I TELL YOU, PHX WAS GROWING ONLY B/C OF LOW PRICES. NOW THAT PRICES ARE HI, THE FLOW OF FOLKS HERE WILL SLOW TO A TRICKLE, IF NOT REVERSE COMPLETELY.
gold is dropping and will keep dropping because DEFLATION has begun.....
jobs? What about Intel....errr they are about to layoff thousands of people in Phoenix, good thing there is so many real estate jobs to back that up...oh wait...
...yep, its gonna be a melt down this summer in Phoenix.
Cali people moving to PHX
I can confirm that - a number of people I knew at work were moving to Phoenix because of low prices - "we can get a mansion there for 200K". . .but now that they have been there, and see that prices went up, they are NOT moving. . .then they arrived at 110 degrees at Sky Harbor. . .and turned right around!
Just two comments, mostly to those ANONYMOUS folk who never CLAIM their negativity!
First, I lived in Phoenix from 1982 until I moved to Austin two months ago. Wages? Well, most of my friends all make excellent wages in the medical field and much higher than other parts of the country, including Austin where the Hi-Tech folk rule for wages. Even my friends who didn't work in the med field had household incomes of at least $80,000 compared to the med people with over six figures (two income families). If you make low wages it is because you don't have an education or skill that is in demand. Go back to school!
Second, why is it that anyone who thinks differently than those "Anonymous posts" are called all kind of negative things and somehow part of the real estate industrial complex? You are as bad as christians who see the DEVIL behind anyone who supports individual rights, free speech, gay rights, gay marriage etc that doesn't fit into their RELIGIOUS RIGHT WING APOCOLYPTIC MENTALITIES. Get real, jumping on your one-sided view isn't pro-real estate industry. You got to start thinking for yourself man!
john foltz is predicting a halloween rush?
To all the anonymous naysayers. The market is falling and will continue to fall. It continues to amaze me that people actually think that their homes have increased in value by 50% or more within the last 5 years. It does not matter how you package your cute little picture. Your home is over-valued and will fall just as fast as it rose. Get over it...and get used to losing money. Suckers!
The countdown is on for the denial of the massive speculatory bubble and its ugly offshoot, Real Estate bubble.
September-Novemeber is going to be the keystone moment. The bubble will pop during that period and feel like a earthquake in the US, layoffs will begin shortly thereafter. Hopefully only a hard landing comes of it.
I got both hands on my nuts---Yanking real hard because I just sold my house in PHX
anon you are the lucky one. I know a lady with 4 houses on the market in phx. She is asking 35% more that she paid year ago. Such a looser. lol
Go USA!!!
Show the world how to REALLY do a housing market crash!
I've got a lot of faith in this one.
I will try to be as honest and impartial as possible. I do want to see the housing market bust only because people in PHX cannot afford homes anymore. I sold my house this January for 403K. The same house is now selling in my neighborhood for 340K. Since buyers are never offering full price anymore you got to imagine that this will sell maybe for 320K. Keep in mind that this house has been in the market since February and still not moved. Price reductions have meant nothing. Can someone please ask the seller of this home if they think the difference between selling at 403K in January and for 320K (hopefully) 6 months later is an indicator of a healthy market. Also 83K seems like more than a 10% drop to me. Also, when they sell guess what. Every future buyer of this model will use the lowest comp to make an offer and since buyers aren't offering full offers anymore...well you see the cycle here.
The way I see the PHX economy is threefold. There are 3 sectors for jobs. Two of which pay very well to somewhat well. The medical field and all housing related jobs (constructions, mortgage etc etc). The third sector of the economy is service. When you work in the service sector you may be able to afford a Pinal county home about 1 and a half hours from downtown and that's about it. So one sector of the economy doesn't pay well enough to afford the homes here and the housing sector as proven by the AZ republic is on a downslide and more and more layoffs are coming everyday. That leaves the medical field which requires special schooling. So when housing disappears and the service industry pays low wages, housing values have to decline. If they dont' decline then there will be lots of empty unsold homes out there at these prices. Bubble or not PHX has some tough times ahead. That's just common sense!!!
Another common sense item is you don't buy in a sinking market. I don't care what any Harvard PHD or real estate agent says or doesn't say. When I see tons of sellers reducing their homes and still not selling them, well I may as well wait for them to keep reducing them.
I'm renting for now and waiting to see how it all pans out. Either way a year's worth of rent is about equal to a 10% percent slide in home prices (which is unrealistic). So at worst I'll come out even.
For those RE people who say the climate is wonderful here. Come on out here today and go for a leisurely jog. Bet you cant go more than a half mile before passing out. It's 112 today. Dry or not it's HOT!! Best of luck to you all!!
Los Angeles Friends in Deed. I read the thread you suggested. I agree there has been inflation in the form of credit bubble/asset inflation - stocks, housing, metals, etc. Currently liquidity is drying up - will cause contraction? Asset prices dropping, further contraction. Perhaps the current "war" (more properly referred to as an illegal and immoral invasion and occupation) is really a desperate attempt to sustain the spending and fight the deflation ( a losing battle in more ways than one).
I understand that historically "real" war usually comes when the deflation is well established and social mood is at its very low point. I guess we will see in the future what type of war this brings us.....
The market valuation, comps etc don't mean much if there are not buyers. Tens of thousands houses siting on the market right now. Who can afford the $300-400k house with 20% down? The only way is opion arms. With the sinking values FB will own more than the value of the house. That way nobody is buying. No more suckers in Phx.
Yes, I think the war, combined with the Bush tax cuts and the Federal Government spending like drunken sailors have all been big factors in the inflation.
Turns out that when you give rich people big tax breaks, they overpay for real estate and other assets, and the only thing which 'trickles down' is massive inflation.
The government has been pouring money into the defense and medical sectors. Same story there - inflation of manufacturing materials and medical costs.
During WWII, when supplies were limited, people were asked to ration. In the current War on Terror/Iraqi Freedom, people are asked to use easy credit to pay inflated prices, thereby postponing hard sacrifices to future administrations.
You know what really rocks? It's that gays cant marry, and I make over $1M/year, and my taxes are lower than under Clinton. Abortion is next you left freaks. Taste it!
I make over a million, don't see much of a difference between taxes now under Bush than Clinton(sorry, 20000 bucks is small time to me), Gays couldn't marry under Clinton..........abortion? Folly. Make it illegal. The black market will make a mint, with the better procedures, women will have a much better chance of coming out of it without any other ailments popping up. $$$$$$$$$$$$$$$$
the vicor sometimes only apears to win.
I just bought a latte at Starbucks, and Dan Rather made it for me! One by one your mouthpieces are getting the boot.
The new banker
To bad you weren't aborted. Highest tax rate? Like that small amount matters.
Unborn babies, whats that, a lump of cells you so badly want to "protect" for drug users, people with "unhealthy" lifestyles and such to litter the land with? Abortions were created for a reason idiot. They will continue and my god, somebody is going to make a good "illegal" profit off of it if banned, probaby Republicans.
Your "Republicans" are cons and homosexuals themselves. They also have ties to the Jewish mob. They just "politic" what they do for the Despotic Judeo-Christian cult, which's decadence of Puritanism and Internationalism are anti-western in nature. Where is Hitler to clean up this race when you need him?
By the way, what is a "Socialist", something you created from the boogyman?
Your a POS anon, you need your head split open by a good sniper, your brains splattering all over the place and maybe some leftover convulsion for my enjoyment.
Beware anon, your type are being hunted.
Hey anon. You MUST get both your mom and your sister to stop calling me for all this late night action. Last I checked $33k each year in your pocket is material. That's the amount you are saving if you make $1M now vs under Clinton. That buys plenty of coke for me and my trader buddies to snort off you sisters as$. To your threats...I say bring it bitch. You are weak and worthless. I am sorry that you dont understand what a socialist is. Go buy an Econ book.
I just aborted the freak socialist sniper. It was partial birth too, so it hurt.
How can Scott Peterson be charged and convicted of killing an unborn baby in a state where abortion is legal? If it is unborn, it is not alive, and you cant kill something "not alive" right?
dude, we got it, the book is great, and I may or may not read it. Buzz off.
I love pissing you bitter left, freak, socialist, (bad trader wannabe), liberals off. Get used to many many more years of Republican rule.
Heh. You aren't pissing me off, you are however making yourself look pretty pathetic. Your sad display of bigotry dashed with a touch of homophobia speaks volumes about you.
You're probably one of those Log Cabin type Republicans who are still in the closet, obsessing over everyone else's sex life while watching Fight Club and masturbating to it in your mom's basement late at night.
Don't be too frightened though, as I doubt that you could find a gay man who would be tasteless enough to want to come within 10 feet of you, let alone touch you in any way.
Oh, and by the time you so-called right-wing freaks get done, there won't be anything left to rule, so have fun with what's left. ;)
This blog is always entertaining.
LosAngeles Friends indeed:
regarding the global credit bubble, which has led to asset inflation (real estate) - prices start dropping, foreclosures, bank failures, etc., will cause contraction (deflation), which has already begun. Of course this will have serious consequences (depression?)
As for Germany in the 1930s, no doubt the negative social mood and desparation due to the bad economic situation allowed for the political outcome that occurred (facism) - as is occurring in the U.S. currently. As a foreigner looking in from the outside, the U.S. is sliding down a very scary slope the last few years. Maybe it is more difficult to see when you are inside living the "dream".
You may be interested in Robert Prechter's "At the Crest of the Tidal Wave", written in 1996 (I think). While it is full of technical stock market predictions, etc., the interesting part is the Socionomics, or social predictions based on cycles of human social mood and herding behaviour. His predictions from 1996 as to what (socially) would be occurring now are eerily accurate and amazing to read.
Why is it that yet another good topic on the housing bubble is hijacked by retarded fruity tofu-eating liberals? I mean dude, can't you people show some restraint? Just cause they're out of pineapple tofu at your local whole foods market isn't a reason to come to this blog and randomly vent on how you hate the right wing, Christians, conservative Jews, Al Roker, and whatever else you hate.
But, oh well, if the liberals are this frustrated then I suppose it's a good thing.
Anonymous,
Will you be my friend?
Please support my views for I am a delicate flower. I will then support your views. Think of it. You will have a friend.
good morning liberals! I am going to work to trade for a living, and make as much money as I can. What are you going to do today? Save a seal or a tree? I just watched Fox News and they were talking about how Bush has been cutting the deficit (as a % of GDP, which is what really matters), and how tax receipts have gone up past 2000 levels (isn't that the Laffer Curve???) How sweet it is you losers. Man, Fox has some hot girls too.
I’ve assimilated into a group and we call ourselves Liberals/Conservatives (choose one). Ha, what a bunch of pacified idiots who think they belong to the correct herd. If you choose then you loose. I own a house blah, blah. No you don’t. The bank owns your house then when they are done feeding off of your labor the true “ownership” is retained by community/government (choose one). When it became illegal to freely paint “your” house in a color of your choosing or freely do just about anything to the interior or exterior without community/government approval, true ownership died. Forget about those New London eminent domain fools who would take your private property and transfer it to another private individual that was just icing on the cake.
Tom,
Don't forget the prop taxes! Don't pay 'em and see how long you "own" your house!
Anon asked why killing someone else’s unborn baby is illegal in a state where abortion is legal.
This question has a simple answer so I will educate him. I bet in that same state it is legal to have your own dog put to sleep but it is illegal to kill someone else’s dog for no reason.
Nobody would ever say that an unborn fetus is not alive. Even fungus is alive.
The issue of abortion rights is not about "alive" or "not alive" it is about a human sole, whether you believe in it, when you believe it enters a human body and whether you believe that your views on these religious issues should be imposed upon others.
Religious zealots have throughout history tried to impose their religious views on others. It still happens today in places like Saudi Arabia and Iran. The great thing about this country is that people are free to practice or to not practice their religion of choice.
Abortion rights and the right for all people to marry whomever they choose is not a threat to religion, it is a protection of the right to choose how you want to practice (or not practice) religion, and ultimately this provides the best opportunity for religion to flourish.
So here is my word of advice to religious people, once you move towards state-sponsored religious morals you run the risk that the state-sponsored religion will not be your religion, or perhaps, your religion but not how you practice it. Isn’t it better for everyone if the government has no hand in religion and then every American is free to choose how they worship, marry and reproduce?
Is the declining economy causing all this anger - or is the anger causing the declining economy????
Don't give the author too much credit. The article still says a lot of things that make NO sense. "With the housing industry accounting for at least one of every three dollars generated in the Valley's economy, any slowdown will hurt." Followed by " Economy is saving grace
The combination of two ingredients makes housing markets go bust: overbuilding and job losses.
Metro Phoenix has just one: overbuilding.
The Valley has one of the most robust economies in the country, with an unemployment rate below the national average. So it can likely weather the housing market's downturn, economists say."
Let's tie this together--Gee, so overbuilding will lead to great reduction of building in an economy where 1 of every 3 dollars is from building. Um, I think that would mean job losses, gang. Not quite sure how losing 1 of every 3 dollars in an economy doesn't tank the economy. So, bust, here we come. And this article is the positive spin.
I don't mind the republicans in power. Nobody in my family is at war, none of the kids in our family are planning on joining the armed forces. Why the hell would we? We speak Spanish whenever the hell we feel like it, wherever the hell we feel like it. We all lived off the government for years and have used that to gain wealth. I sold my home at the peak, rent close to work and spend barely any gas. If it goes to $4 bucks a gallon I'll bike it. I could care less about the war in Iraq. The ole family jewels were cut some time ago so who gives a shit about abortion. If Bush says that it's wrong to kill then it's wrong to kill. As long as that baby isn't a future insurgent. I have a good wage working for the government. I could care less about this government and actually do more harm than good at work. It's a government gig so its secure and they could care less whether your productive or not. I have no kids just 2 dogs. I don't even bother following the Iraq war in the news. Why bother? Richer folk like me don't even know anyone or are friends of friends of anyone who knows someone who has a son or daughter at war. If it wasn't on TV I wouldn't even know the war existed. My taxes are down and my politicians in control. Plus the insurgency has been in it's last throes for years. Plus who really gives a fuck about the insurgency anyway, they are worlds away from my little nestegg. I was part of the investors who ruined a decent affordable city like PHX. Go Bush, Go Cheney for you have created many Americans like me.
Sincerely,
A Staunch Republican!
Ride em COWBOY!
i just checked the blog. i was excited there were 69comments. unfortunately only 3 were about phx realestate.
Phoenix is doomed - I don't think there is much argument about it...
Phenix is so dead no one has interest.
Where did all these homophobic ass wipes come from today? Does this blog attract an unusually large % of this trash, or is it a typical % of the population?
All I know is the longer I live and the more people I meet, the more I support abortion.
It's too bad the Republican DNA can't be detected before birth so all can be aborted and flushed down the crapper where they belong.
Hurray
we reached 50 225 in PHX today!!!!
Now look here...anonymous and anonymous--CUT IT OUT!!!! I am sick of this acrimonious flame war between you two. Now play nice.
Question, just asking around: That $400 million Daimler Chrysler testing ground that Toll, et al. bought, did they buy it or just an option to buy? Google hasn't been much help. Is that facility NE of Wittmann AZ? I don’t see any development on the satellite images. Can anyone give me any up-to-date information?
I agree with Skytreker. We are not going to forget that it was the reiligious right that backed the government that detroyed our country. However I think pay back is going to come quickly and they will never know what hit them.
I leave for a couple of days and an immature hate-filled threadjack breaks out? jeesh.
I deleted the last two comments. No swearing on HP and no hate
Go back to the fox news or air america blogs if you wanna do that
Keith:
That is BS. You say
"I deleted the last two comments. No swearing on HP and no hate"
But you let some one bash on my faith and that is ok. So is it ok if I say homosexuals can wank themselves and leftists are just like hitler!
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