Good post on doom the other day about the historic Phoenix crash. We saw it coming, but to see the death spiral in full bloom is stunning.
As long-time HP'ers know, Phoenix was REIC-infested Housing Ponzi Scheme ground central, and an obvious one at that.
Phoenix was the town that inspired a good share of the leading bubble blogs. A town full of get-rich-quick scamsters and fraudsters, fly-by-night flippers, lying and ignorant realtors, illegal Mexican laborers, greedy builders, corrupt appraisers, incompetent "rolodex-of-realtors" REIC-bribed media, corrupt realtor politicians and scum mortgage brokers. A nice town in the 80s and 90s that got killed by a corrupt and out-of-control REIC.
The post-crash Phoenix area is now littered with foreclosures, blighted neighborhoods, jobless illegals, unpaid credit card bills, and years worth of unwanted homes for sale. Phoenix based its fake economy on housing, the people went along for the ride, and now that its #1 industry has blown up in spectacular fashion, Phoenix will become the new Detroit.
And that should come as no surprise to HP'ers.
April 24, 2008
The Great Phoenix Housing Bubble and Crash will be one for the history books
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19 comments:
stop bashing detroit already.
Yes the city was a hellhole but you can avoid that nastiness by fleeing to the many various suburbs as just about everyone has done.
You can't get away from the
"town full of get-rich-quick scamsters and fraudsters, fly-by-night flippers, lying and ignorant realtors, illegal Mexican laborers, greedy builders, corrupt appraisers, incompetent "rolodex-of-realtors" REIC-bribed media, corrupt realtor politicians and scum mortgage brokers"
by just avoiding one area of Phoenix. They're everywhere!
Greg Swann represents Phoenix perfectly
Even as a long-time Phoenix resident and lover of this city- foibles and all- I find it difficult to deny the validity of such statements regarding post-crash Phoenix.
I rent in central Phoenix, just north of downtown and commute to Chandler for work. On that commute I see the foreclosures, the blighted neighborhoods, and countless homes for sale. It is a much different city than when first moved to Arizona.
Having lived most of my adult life in Phoenix, it is difficult to see a city that I have been and continue to be a part of, deteriorate in such a way. I am encouraged, however, by the handful of people in my neighborhood (those with means currently beyond mine) pick up rental properties and restore them to their 50's and 60's era charm. God knows we're going to continue to require rentals in this city for some time to come.
I do take exception to the "Phoenix will become the new Detroit" comment, but it's only based on an irrational, gut reaction needling a part of me that recognizes a hint of truth.
I have been an avid reader of this and "Doom" for just under a year now. It wasn't until this post about my hometown, that I felt compelled to comment. Thanks to all the HP'ers and Keith for their due diligence in making this a lively and informative blog.
The following was posted previously on this site by someone and had saved it because is captures the ground zero of the housing scheme, Phoenix, just perfectly.
Phoenix and its 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. 200k 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 before,
Metro Phoenix, AZ:
"There is no there, THERE".
1. Detroit is a shithole
2. Phoenix jumped the shark in Sept 2005
Phoenix, the New Detroit.
Priceless.
no intent to start a pissing match, but phoenix is no detroit. there is no doubt that housing fell off a cliff here, and that most people that played the game are going to get burned. but for the near term, phoenix will always benefit from the fact that things are worse in san diego and los angeles, and of course far more expensive.
Keith,
This looks like a Sine Wave. The trough will be equal in magnitude to the peak.
Got Trig?
Hands shaking, stomach cramps, sleepless nights... "Doc, I just need one more flip and everything will be fine". "What's that you say?" "No! I am not addicted to flipping. Flipping and phlipping sound alike, but they are not the same". Yes my name was Greg Swan, now its Greg Vulture... There is not much here to feed on here anymore, but I am too weak to fly away.
We left PHX last year for the Bay area. Our moving costs were completely paid for. Naysayers we knew in PHX said it was a crazy move, that the housing would be totally unaffordable. It was and in some areas, still is. We managed to sell our house in PHX with some (not much) profit. It took over six months to sell. We wanted initially to rent but couldn't rent for the costs of the mortgage. We were the only ones to sell last year in the area we lived. Prices in the Bay area are now going south and we are waiting to buy a short sale or foreclosure.
Buying a foreclosure may make more sense then renting at this point since rents keep skyrocketing here.
We got a good deal on a rental, but the landlord just told us it is in default! We figure we have up to six months before a Sheriff comes knocking on our door.
There is no comparison between the Valley and the Bay area. We live near public transportation, and sold one of our cars. I haven't driven since I got here. My commuting costs are at most $15 per week and often less with telecommuting and walking. I was dying a slow death on the freeways in PHX. Now our move no longer seems crazy, and many of those who said we were crazy have already come to visit. Who knew? Oops, that's right: HPers.
Keith - as I always ask/point out, can you really read/comprehend half the stuff you swipe from other sites? I'm guessing they can't either:
YOY price appreciation:
Jan04 - Jan05: 25%
Jan05 - Jan06: 30%
Jan06 - Jan07: 1-2%
Jan07 - Jan08: 15%
If you run the #s real quick, you'll see a 60%+ spike from Jan04 - Jan07, and a 15% from peak drop so far. That's still more than 35% up from Jan04, which was about 18-months shy of bubble-peak. Sorry, that graph is actually hurting your case.
Whereas areas like FL, AZ, and exurbs for DC/etc are pushing 30-40%+ acknowledged/documents drops, your graph supporting your apocalyptic visions actually only shows a 15% drop from peak in one of *the* most bubblicious cities in the boom. Please take some basic math and financial courses man. Perhaps get some of that financial-literacy you preach?
I agree with geeski Phoenix is no prize, but things are worse in Kalifornia and even today houses are still nearly twice as expensive there. From gangs and crime, to traffic, to the state budget crisis things are worse in Kalifornia. Also although wages are higher there, they are not enough to make up the big difference in home prices.
I moved to Phoenix in Fall 1995. My company transferred me to Atlanta in 1998. They transferred me back to Phoenix in 1999.
The first thing I noticed when I drove back into town, was how dirty it had gotten in just one, single year. Amazing.
I stayed until Fall of 2004 and just couldn't take it anymore. I never did buy a house, and never even entertained the thought because of the outrageous weekly price increases.
About 1/2 the guys on my rec hockey team were mortgage guys. No wonder I hated them so much. And I thought it was just because they sucked ass at hockey.
I'm back in Minnesota close to my family. Yeah the housing market blows ass here too, but the people overall aren't as objectionable.
Phoenix is dead...
Why being so negative. City is always created by its inhabitants. I am working for Toronto real estate agent and I have seen some chnages in neighborhoods as time was running. Real estate crisis in US is good chance to "reshape" structure of some of your towns..
I flipped houses in Phoenix from 1994 through 2007.
Got out in time for the most part, and made a bundle. What a ride.
I didn't get involved in any new homes; all the ones I sold were fixer uppers.
Phoenix continues to grow monthly and although there are lots of vacant homes on the market, if they are centrally located and close to freeway access, they are holding their value.
The communities built way out of town are like ghost towns and the blight is creeping there.
Where I live, just north of Arrowhead Mall, the homes are well kept, lawns are manicured, businesses are thriving and most people have well paying jobs.
Even during the boom, there were pockets of blight and there always will be.
The illegal problem here is extreme. Large quantities of the hundreds of thousands of invaders are finally being squeezed out and denied benefits and employment, but as far as I am concerned, not enough and not fast enough.
As the Phoenix area works through the inventory, gets rid of illegals and homes become affordable once again, I am confident this area will continue to be a great place to live and will get better.
The draw is still outstanding and opportunities are abundant for businesses to flourish.
Our universities and colleges are at full capacity.
The unemployment rate continues to be better than almost every other location in the country.
We have high tech, military, and a wide diversity of business that has nothing to do with the real estate industry.
Detroit is nothing like Phoenix except perhaps that it is close to an international border and its sports teams aren't that great.
Once this thing plays out, I will be flipping houses here again. In the mean time, I have ample cash reserves if I decide never to enter the game again.
What's happening in Phoenix/Scottsdale is even exceeding my own predictions. I'm really glad to be the hell out of there - our only sad point in moving away was leaving behind some great restaurants and good friends.
Well, there are no regrets now, since all those great restaurants are going out of business, and those friends are packing up and moving away to find new jobs.
All I hear from readers on my blog is the stores are empty, shopping centers look like ghost towns, even supermarkets are laying people off.
At this point the only people out and about enjoying Scottsdale are the retirees. They finally have the place all to themselves, just like they wanted.
I agree that Phoenix will become the New Detroit. Even in north Scottsdale, arguably the nicest place in the valley (keeping in mind that everything is relative), there have been meth lab busts, random shootings, drive-by shootings, nightclub shootings, armed robberies, and other rampant out-of-control violent crime almost daily.
So fun to see the paid real estate trolls out there teaching math, and guilt, and greed, and talking points.
NeoCons will never stop. Until they are all out of the debt they ran up on their children's credit card.
Then its into the closet for their guns. I'll show you bitter!
This will be one dangerous country soon.
King of the Bitter Renters
anonymous said:
"I flipped houses in Phoenix from 1994 through 2007......................"
What a bunch of BS from an obvious anonymous pussy, Phoenix boosting scumbag realtor whore.
Phoenix metro is a shithole, and since the late 1990s, the last stop for America's trash and dead-enders.
I grew up in Phoenix and go back there five to six times a year for several days at a time. I usually spend time around the same areas that Anonymous lives in, and A is right, it's not all that bad in that area. Phoenix has always had a mixture of a large low income population and industries that came and went and were very affected by economic downturns. It has never been mostly a wealthy or even upper middle class area, so it is amazing that it is as thriving as it is.
And Solo, that post is insulting and rude.
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