Nah, real estate never goes down.... Flippers in Phoenix, my friends, are finished.
The latest median resale home price in the Valley is $256,900. That's down from $263,000 in September of last year, according to the monthly report. The record of $267,000 was set in June.
The price drop rattles one of the fundamental assumptions of Phoenix housing: Buy a home and it will probably be worth more next year. It's another reason for skittish buyers to stay on the sidelines.
"The problem gets to be what is the incentive to move into the market?" said Jay Butler, head of the real estate center.
It's also bad news for people who bought at the peak of the market who are finding their houses no longer are worth what they paid.
People who need to sell now because of a relocation or other non-negotiable reasons could lose thousands of dollars on their housing investments.
"If you bought last year and you don't need to sell, bite the bullet and wait for the appreciation," said Diane Watson of Realty Executives in the northeast Valley. "But if you need to sell, buyers don't care. You have to be competitive."
Scottsdale residents Kyle and Jaci Olsen are seeing that phenomenon firsthand. They bought two investment homes in Scottsdale last year, and one has been on the market for 10 months. They paid $415,000 for it and dropped in $40,000 to $50,000 in renovations. Now, it's now listed for $435,000 after coming to market at $499,000.
"It's a nightmare," Kyle Olsen said. "It's priced really well. We've had a lot of lookers but no one is coming to the plate."
October 11, 2006
Flippers financially f'ed in Phoenix as folly of flim-flam flipping falls flat
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41 comments:
as a phoenix born-and bred
HAHHHAHAAAAAAAAAHHHHHHH!
They bought two investment homes in Scottsdale last year, and one has been on the market for 10 months. They paid $415,000 for it and dropped in $40,000 to $50,000 in renovations. Now, it's now listed for $435,000 after coming to market at $499,000.
They bought at the peak when markets were well known as being overvalued and tried to make a quick 35-50K after 10 months- F'em
nice headline! Flipping funny!
Not everyone is going to get rich in any bull market but the good news is the depreciation in the Phoenix market is a relative drop in the bucket compared with the double digit appreciation of the last few years.
Plus, with oil prices down and and interest rates leveling off, all economic indicators point toward a housing recovery in the next 12-months.
"If you bought last year and you don't need to sell, bite the bullet and wait for the appreciation"
Great advice for investors. The rest of you should consider taking advantage of these soft market conditions or risk being priced out forever.
"Plus, with oil prices down and and interest rates leveling off, all economic indicators point toward a housing recovery in the next 12-months."
Whoa. What economists are you reading other than those hired by the NAR? The major economists are all talking recession in 2007 and many respected economists (go to Angry Bear on HPs sidebar and traverse his blogroll) are talking 4-6 year recovery.
Interest rates leveling off ain't going to help anyone. Dropping, maybe, but even that is highly dubious because we don't know the true amount of I/O and option arm exposure.
Hey George,
Could you pass me some of what you are smoking? You are not going to get priced out folks, sit on the sidelines as it appears you are doing and let it crumble further? Don't listen to George he probably is an investor or realtor?
By the way HAHHAHAHAHHAHAHAHAHAHAHAHA
to my Cali Neighbor from San Diego who bought four houses in Phoenix as investments, that now sit vacant. Also to the greedy selfish prick who bought next to me as an investor, hope you enjoy watching your house lose value every day.
A house is not a home
.....
Now and then I call your name
And suddenly your voice appears
But its just a crazy game
When it ends, it ends in tears
........
"The rest of you should consider taking advantage of these soft market conditions or risk being priced out forever."
-that's a joke, right?
yeah, the people in japan are glad they sat on their overpriced property and waited for the rebound
and waited
and waited
and waited
and waited
and waited
and waited
I'm amazed and stupefied. I'm sitting here watching Jineane Ford of Channel 12 news interview a Real Estate Investing "pro" named Mike Moore who is stating that people have to get off their backside and start buying now. They need to buy before the prices go up too much and they can't afford to buy. Apparently prices are not falling in Arizona, but are going up and will soon price everyone out again according to this genius. Not only that, but he's telling them that if they have any equity in their current home they "have" to pull it out and use it to buy investment properties. He is also giving props to Interest Only loans, refinancing and pulling equity as soon as you can, and stating that buying investment properties for $300,000 - $400,000 are good money making opportunities in Arizona. "You just have to structure your loans correctly."
Not only that, but if I was expecting the reporter to ask a single question about the housing market or possible bubbles...I was WAY OFF. She sat there and just laughed about how excited he was. /boggle
Then I went to his website and /boggled some more: http://www.expertlendingpro.com/index.htm
You can see some interviews with this guy here: http://www.azcentral.com/12news/arizonamidday/articles/0320silverstar-CR.html
Aircraft strikes Manhattan building
A helicopter or small plane has struck a building on East 72nd street on Manhattan's upper East side.
It is most likely a residential apartment building.
Flames can currently seen coming out of two floors, and four apartments are said to be heavily engulfed in flames.
http://tinyurl.com/luxnl
----------------
Let me guess, GWB saw the plane hit the building... But I seriously doubt it he was to busy reading My Pet Goat . . .
>Great advice for investors. The rest of you should consider taking advantage of these soft market conditions or risk being priced out forever.
It is going to take a very long time before there is any risk of being priced out of the market forever. And actually many of today's home buyers ARE ALREADY priced out of the market.
The key for many markets is absorbption of excess inventory. It simply will not happen overnight and it could take years depending on which market you may be in.
Right now the ONLY way to create more buyers in the market place is to slash prices to what the buyer CAN afford.
And I realize that sellers that bought at the top (like Keith's buyer of his condo) are likely to feel a violent pinch if there is a life changing event that would force them to put their home on the market, but that certainly is not anywhere near the majority of people.
And look at the market reaction HAHAHHA! to funny..is it all down hill from here.folks..gold, gold , gold..
Hey Todd Tarson,
I would like to shake your hand. An actual realtor out of Kingman AZ. Who tells the truth. Are you as truthful to your potential buyers also?
as a phoenix born-and bred
HAHHHAHAAAAAAAAAHHHHHHH!
Being Phoenix born and bred is not something to be proud of.
"Being Phoenix born and bred is not something to be proud of."
ummmmmmm...
why?
"Being Phoenix born and bred is not something to be proud of."
ummmmmmm...
why?
A: Take a trip to Phoenix and you will be able to figure it out@
"A: Take a trip to Phoenix and you will be able to figure it out@"
ummmm...I live here...
Better yet - you describe for me your perfect town or city from whence you hail from.
my realtor told me that although the market is slowing down, now is a good time to buy (barring some catastrophe) if you plan on staying in the house long-term (10 - 15+ years).
his advice also included buying close to work, holding out for a house that you really like, and look for a home in top-notch school districts.
he did acknowledge potential price reductions but not too severe based on great fundamentals in our area of interest (mainly job growth).
my wife and i live in northern va. we are interested in the town of Vienna, VA. we both work in tysons corner. our commute would be cut from anywhere from 45min - 1 hr to 10 - 15 mins.
i thought the guy was a little overly optimistic yet honest with his opinion.
we are still not quite committed to buying a new home in this market, however.
Don't underestimate the attempts that will be made over the next year or two to get real estate to start appreciating again, as exemplified by george w groovy's comment. "Buy now", "Rates are low", "It is just a minor correction", they will all scream over and over again. It will be breathtaking to watch. And at some point the market will hit a bottom (who knows when) and all these folks will start crowing that they were right, no matter how off they really were. Should be quite entertaining.
"We've had a lot of lookers but no one is coming to the plate"
Because everyone has left the field, It's game over..
Stupid Flipper!
>Hey Todd Tarson,
I would like to shake your hand. An actual realtor out of Kingman AZ. Who tells the truth. Are you as truthful to your potential buyers also?
Yes I am, but I will say that I'm no financial advisor and do not offer my opinions on the future. I have disclosed at times that I am an investor and that I haven't been buying properties since 2004 because of the run up in prices that had me concerned. I ask potential clients to seek financial advice before we write a contract for those kinds of opinions.
That being said, the buyer still makes the decision and once his/her decision to buy is made, and they have proof that they are able to buy, my services take over. I perform them to the best of my ability on behalf of my client. If this means that I become the king of lowball offers, then that's what it means.
I post charts on my blog that show what's up with the current market. I print these off and give them to sellers, and sometimes it is very sobering to them. They are asking too much for what the buyer is willing to pay. The charts are a visual. They help.
I have never told a client, and never will, that whatever purchase they are making is a solid investment. I tell investors that they HAVE to know more than me because I'm not a financial advisor. I tell would be home owners that they are buying a home, not making an investment and that investing in property is totally different than owning a home. It is my opinion that home ownership is for the roof over the head, not for making money. Again see a financial advisor for that kind of advice, not a realtor.
Does it sound like CYA?? Of course it does. Is it?? I don't think so. Buyers sometimes have questions that I simply cannot answer or could be in a position to answer.
I make no attempt to refer potential buyers to lenders, instead I hand them the yellow pages and tell them to make some calls to shop around. At that point they aren't my client anyway. They are my client when they are ready, willing, AND able.
Please understand that I'm not the only realtor that runs his/her business this way. I know there are idiots in the biz and there is evidence that a few rotten apples are spoiling the bunch. Do me a favor, don't hire the spoiled apples any longer.
In fact DON'T hire a realtor for aspects of the transfer of property that you can do for yourself. Anything left over that you feel you cannot perform negotiate with a realtor for a reduced fee. I offer that. Others do as well.
Times are a changin'. Some of us are leaders of this change and we are young enough and have the energy to see it through. It will take time but it also helps that the consumer is more aware of their own options and can choose accordingly.
The days of the blanket listing agreement for 6% of the sales price is ready to be challenged... by realtors. Someday, I believe, the some will become many and then most. That will be great for the consumer AND for this business.
Do you belong to the "National Association of Realtors"?
If you do, then please do the planet a favor, and vote out David Learah.
Actually born way out of town, 20th Ave N. of Camelback.
This was a great town to grow up in...and where i live is a great place to grow old.
This market took years to reach it's frothy peak; i think it will take years to deflate. But i bought 31 years ago with the firm intent to die here in my home, so it doesn't really concern me.
I've heard that before from other FB's: "It is priced really well...". Yeah, right, really well, sure. YOU PAID TOO MUCH, DUMMY!!! It is not priced right if it was bought at the peak of the market. Until people out there get some financial education and stop following the crowd like sheep this kind of thing is going to happen over and over again.
Reuters..."Realtors see weaker 2006 home sales, price gains"
>Do you belong to the "National Association of Realtors"?
Yep
>If you do, then please do the planet a favor, and vote out David Learah.
I don't want to sound like I'm defending him, but he is doing his job and all of you know that. You're all already smart enough to know that he is a spin-meister and not some guru.
I bet plenty of folks made a killing when he was offering his fancy charts on the market while the insane run-up in prices was happening, but I doubt many of those people ever knew of Dave or his fancy charts.
As far as voting him out, it's going to take me many years to ascend to national leadership when perhaps I'll actually have some say in the matter. I'll certainly keep it in mind.
Perhaps I'll run into him at the convention in NO in November. I'll be sure to let him know how you all feel (although I already know that he is aware of his many critics).
Isn't MLS just a FRIGGIN' DATABASE???? Why hasn't Google or Yahoo, just taken a dump of the database and put it online for free access. Anyone who wants to should be able to access the info online and just pay a $500 flat fee per sales transactions processing. End of story.
>Isn't MLS just a FRIGGIN' DATABASE???? Why hasn't Google or Yahoo, just taken a dump of the database and put it online for free access.
Because it is not Google's or Yahoo's data.
>Anyone who wants to should be able to access the info online and just pay a $500 flat fee per sales transactions processing. End of story.
Google and Yahoo are free to offer their own MLS as they see fit, and I'm willing to bet they will soon. It will be direct competition for what is the state of the MLS right now.
I think competition is good.
I and thousands of other apt. "dwellers" have been F'd by these types for the last 3+ years in Scottsdale as prices have doubled and rents are tearing us a new one.
I feel tingly all over reading this. If I had acid, I would toss it in their direction.
Keith, keep the Scottsdale stories coming!
'folly of flim-flam flipping falls flat'!
Say that three times fast, in Daffy Duck's voice!
Not sure where u find a 300,000 dollar home in LA unless you are talking about the cardboard ones on skid row.
And for what it's worth, most of Arizona is a SH*THOLE. Like 100 degrees 2/3rds of the year. Plus full of ignorant white america (I'm white btw). Two years there was 2 years too long. Tucson is a bore but at least Phoenix has some culture, not much but some.
japan, top of the industrial manufacturing export bussines housing 100 minus 90% value/price equals 10, 10 plus 400% and sixteen years equal 40, because values exceeded the average salary,
housing as investment yeilds one homeless person, housing as home yeilds beter community. perhaps now the investors will be homeless rather than those needing homes, quid pro quid?
to bad that without borrowings, neither of those houses are worth more than 120,000$, and then only if they produce enough fruit and veggies, to see one thru the depressions, let alone, pay the taxes, rent then and find a homeless sucker, to bleed, maybe 20 years from now they will again sell for todaYS ASKING PRICES
At some point in 2001 there were a whole bunch of people who finally realized that all the thousands of dollars they put into pets.com wasn't coming back. And that they were standing there holding a bag that no-one else in the entire world wanted, never mind pay for.
Going to happen to some folks with their houses this time too. And don't bother saying that the price of a house can go to zero. Of course it can, that's why people have abandoned property in the past. (Usually when its utility is less that its carrying costs).
Not all houses will go to zero natch. Just like not every stock went to zero either. Just some.
Going to be bloody for everyone else 2.
So many "victims" of the Late Great Housing Bubble in AZ.
ummmm...I live here...
Better yet - you describe for me your perfect town or city from whence you hail from.
Anywhere but Phoenix. It's just way to fuc$$$ hot####
Sooooo........ The sleezebag, slimeball, speculating slumlords are seeing their shekels shrink?
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