March 12, 2007

What was it about Phoenix?

The biggest housing mania (followed by the biggest collapse)

Out of control homebuilders now stuck with massive dead inventory

A fake economy propped up short-term by scummy REIC

And the inspiration behind three of the most popular bubble blogs

So, what was it about Phoenix?

Asking prices in the Phoenix area have dropped about 25% this year, says David Khalaj, an agent at Realty Executives.

Existing single-family home sales tumbled 34% in the first nine months of the year compared with the same period last year, and condo sales were off 24%.

Construction permits for single-family homes were down 23% through August.

The declines appear so dramatic because Phoenix's housing market last year (and for the past several years) was so hyperinflated.

"Last year was just one of those atrocities that happens rarely," in terms of bidding wars and soaring prices, says Camille Sullivan, also an agent at Realty Executives. "I've never seen it before, and I've been doing this for 25 years. It was a very difficult time."


sixpercenter said...

The Phoenix runup was driven by stupid people from California egged on by con-men like Swann, aided by fraudulent appraisers, financed by criminals at New Century.

I'll become an expat if there's some sort of gov't bailout for this runaway greed.

Anonymous said...

Hey, I bought so I would'nt get priced out of the market, and now I am stuck, where did I go wrong?

trashwacker said...

"What was it about Phoenix?"

It was Much Ado About Nothing...and here's why:

Phoenix and it surrounding metro area is finding its own level.
Basically, a repository of mediocre poorly educated
bottom-feeders seeking cheap banal living and easy money.This souless mix of carpet-bagging transients,
budget seniors,tatooed misfits, real estate grifters,toothless white trash tweakers, minimum wage job seekers and pseudo
Scottsdale millionaires has created a major population
center that masquarades as a major metropolis but is really one big cow town.
A bleak barren landscape with terrible weather,traffic
congestion, bad air, stuffed with ugly stucco houses
and big box retailers peddling Chinese crap, corporate
food, and a dumbed down semi-literate citizenry,
Phoenix metro epitomizes the lowest commom denominator of American cities.
If somehow, by either plan or accident, you're living
in metro Phoenix, you rank on the bottom rungs of the
intelligence charts. The only reason to be here,
(temporarily), is if you're making a decent income
(absolute min. 250k per yr). Anything less is not
worth it, as your health, mental well being and
personal esteem will deeply suffer by living in this
genetic cesspool of half-breeds.

As someone posted here before,
Metro Phoenix, AZ:
"There is no there, THERE".

Benjamin C. said...

After WWII, the Phoenix city government simply let the utilities and the developers run the town. They did what they wanted, built where they wanted. When I grew up there in the early 60s, Phoenix still had a functioning downtown... and it was not unusual to see someone ride their horse downtown.
But this past few years have been the worst. Baseline road between Central and 40th.... were all orchards, flower farms, a very nice leftover of the agricultural age.
The last time I was in Phoenix, an elderly uncle told me to 'not go down there... it will just make you cry.'
Phoenix real estate agents and developers deserve their own special place in Hell.

Anonymous said...

This market is going to fall 25% below it's long term trendline before it bottoms. You'd have to be insane to buy now...

Anonymous said...

The mania has been caused by the same thing that makes everyone here get plastic is all about image. Everyone here wants to appear to be the richest...if that means they have to sell their grandmother down the river they will. They don't look at the fundamentals of the deal, zero down, interest only means I can afford how much...great! I'll take it. It is going to get very ugly!

Small Hat in Scottsdale, AZ

truthsquad said...

Because Phoenix is the last chance stop for the white trash desperadoes
ignorant enough to believe in the American Dream BS cooked up the corporations and that they too are "middle class".
They lust for a home, a new truck and new stuff to feel that they've "made it" and are keeping up.
In reality, this pathetic mass of Wal-Mart shoppers and fast food eaters are condemend to a marginal life as they stupidly drive to miserable jobs with Amerikan flag and Bush decals on their vehicles.
Right behind them are the overstretched Scottsdale "players",
pretentious scum terrified to going back to their trailer park pedigree, and willing to go to any length to maintain their fake lifestyle.Activities range from divorce,gold-digging,real-estate pimping,tax evasion, mortgage fraud,credit card fraud,personal and business staged bankrupticies, and on and on.
So its no surprise that Phoenix is the armpit of the housig crash.

Anonymous said...

sixpercenter said...
I'll become an expat if there's some sort of gov't bailout for this runaway greed.
I've been workin on it since '04 ( until '03 I used to say that the gub'mint won't let us sink Great Depression style - well, "we wuz wrong"!)
Better hurry up, it takes 'bout 7-10 yrs to build a reasonable nest outta there (EU in my case).

Good luck,

JustaTroll said...

Those two quotes are from six months ago, babe.

Why not pull some quotes out of the S&L scandal from the late 80s and pretend those are current, too? Or from the Great Depression?

If you're going to sensationalize, at least don't lie to your followers.

Anonymous said...

Benjamine C., Things haven't changed, it would make you so sad. The developers still control everything..."They paved paradise and put up a parking lot."

Truthsquad, You also forgot Scottsdale's psydo-millionaires favorite passtime: drugs!

Small Hat

FlyingMonkeyWarrior said...

Dear Keith,
This time Swan is really fighting for his reputation. His traffic is down to 5 or 6 'yes men' (yawn) whilst you have your own thread at Bloodhound. He is such a pompus con man, imo. HP has him way too much on the defensive it would appear.

Anonymous said...

why is housing panic so upset with this greg swann guy ? who is he ?what did he do ?

Frank said...

I just left the Phoenix area after 7 long years. Here's my take on it:

1. The biggest cause of this mess is that the "$30,000 millionaire" mentality that was once the private province of Scottsdale and Paradise Valley has spread to everywhere east of I-17. The mentality is that anyone who does not "own" is a loser, a common criminal, and a 2nd-class citizen. People "buy" ONLY for image. Single women will not associate with men who rent because they believe the myth that you must be broke if you rent.

2. The biggest reason Phoenix ever had such a high growth rate to begin with was because it was cheap. That's the only reason anyone ever moved there. People moved from cold climates and accepted the miserable 6-month summer because it was cheap and their cost of living was cut in half. Now that it's overpriced, there is absolutely no reason to move to Phoenix anymore, and the mass influx is stopping.

3. The industry. They made it easier to qualify for a mortgage than for an apartment lease - for example, take "no-income-verification." Guess what? You can't rent an apartment without income verification! So people who couldn't afford to rent bought, despite how counter-intuitive that sounds at first glance. When the lenders are taunting people with no-income-verification and no-money-down, it becomes easier to buy a house than to rent an apartment, and if you combine that with the image of success that everyone in Phoenix seems so desperate for, you've made an irresistible offer.

I'm so happy to be out of there after 7 years. It was a wonderful place to be single for my first 5 years there - it's full of very hot slutty women and the men are a joke so there's no competition - but now that I have a wonderful relationship, I moved somewhere a thousand percent better.

Davos said...

But this past few years have been the worst. Baseline road between Central and 40th....

No kidding! I often had to do service calls for a remote office in that area. The first day I was there, my boss told me a couple things. He said if it's after sundown or there's some kind of a party going on in the parking lot, just keep driving.

Anonymous said...

just bought $1.47M pre-foreclosure home in FV. it was appraised as $1.7M

what a bargain!