NYT Arizona crash expose: "stuck in the middle of the desert, saddled with spacious new houses that had become not a promise of a future but a burden"

If I were to end the blog today with a story that would wrap things up, this one in the Times today would be it.

Before leaving for Europe, I took a trip down to Maricopa Arizona, 40 miles south of Phoenix, in the Fall of 2005, and couldn't believe what I saw. In the middle of nowhere, and I mean THE MIDDLE OF FREAKING NOWHERE, there were homes going up like weeds in the desert, and there were crowds lined up to get in the doors.

I went into four of the developments - a Pulte, a Centex, a KB Home and I forget the fourth, and the homes were monuments to 2x4 bad construction, painfully terrible architecture and unlivable layouts. And of course, they were located in a place that homes should never have been allowed to be built, and a place that nobody in their right minds would ever buy a home, at any price.

And yet look at all the cars and pickup trucks (damn - lots of illegals here!) filled with bright eyed buyers. Look at all the selling agents all too eager to tell you how appreciation was 'in the bag', how it was a 'great time to buy' because prices were going up next week, and how easy it was to get a mortgage at a great low introductory rate from their lender.

And I decided right there and then to start a blog to warn people about what was happening, and what was to come. I had seen enough.

This one has it all HP'ers. It's long, so grab a cup of coffee, read the whole thing, and then comment. It's too bad the screwed homedebtor in the article didn't read HP or all the other sources that would have and should have scared him away from such a stupid decision. This article sticks out for me - from July 2006, before the sheeple in today's story made his mistake:

"Scott Helsel never figured on being a real estate agent.But Prudential Arizona Properties has been lucrative for him. Especially with home builders in the Maricopa area so desperate they're offering real estate agents double or triple commission rates to bring them clients, knocking prices down by tens of thousands of dollars or tossing in free pools and other upgrades."

So today's expose has the ignorant and now-screwed homedebtor. It's got the pre-foreclosure home renting out at a fraction of the cost of owning, desperate realtors on commission, and sheeple buying badly-located homes they couldn't afford and shouldn't have bought in an area too boring for words. It has the destroyed dreams, the closed businesses, the screwed town, the sea of foreclosures, and the lifetimes of savings lost. And it has the epic real estate collapse in Ponzi-Scheme-Central Phoenix Arizona.

Thank you realtors. Thank you mortgage brokers. Thank you builders. Thank you appraisers. You f*cked people like Daryl Fox for a commission, even as he f*cked himself. And now we all pay the price.

And a message to Congress: DO NOT F*CK WITH THIS MARKET. PRICES NEED TO FALL TO THEIR MARKET PRICE. HOMEDEBTORS THAT SCREWED UP HAVE TO GIVE THE HOMES BACK TO THE BANKS AND START OVER. THE BANKS THEN HAVE TO FAIL. AND THEN WE CAN ALL MOVE ON.

Here's the sad and all-too-familiar story. Post good clips and bites in the comments thread.

Thanks Frank for the link.

"Brutal" and "Perfect Storm". Arizona's fake housing-based economy spinning out of control as real estate market crashes

Everyone in Arizona glad they listened to idiot realtors on commission these past couple of years?

But what about all the jobs! What about all the immigrants! What about the fact they're not making any more land! What about the 365-days of golf!

Sorry. Something called gravity has now taken hold. Buckle up. Arizona housing prices are going to crash right back to pre-speculation inflation-adjusted 2001 levels, and might not even stop there. And the general Arizona housing-based economy will go into depression levels soon. When you build your fake economy on one fake industry full of fakes and fake promises, and then that fake industry blows up, things get real ugly, and that ain't fake.

Thanks to Doom for the great (and ugly!) charts. 17 month supply of homes in Phoenix. Ugly. I guess there aren't 21 reasons to buy homes today in housing-crash central Arizona.

Housing worries generally optimistic Valley experts

"Brutal" and "perfect storm" are some of the descriptions local economists now use to describe economic conditions in Maricopa County.

"I think this will be a brutal year," said Dennis Hoffman,an Arizona State University economist who helps guide sales tax forecasts for the state.

In an interview, he said "I think it has a lot to do with the fact that our local sales tax revenues are tied to this new house-new car phenonomen, decorating the house, doing maintenance and repairs and adding new carpeting, furniture and fixtures."

Economist Elliott Pollack reiterated that the housing market is a serious worry because there are so many houses on the market and lending standards have become tougher. Also the housing slump could slow migration into the state because homeowners in other states can't sell their houses to move here, he said.
"We especially have a perfect storm in the housing market," he said.

Local reality show exposes housing woes of the rich

The Landrys say they think viewers will warm up to their subjects for courageously airing their financial woes in public, something many in their social stratum consider the greatest taboo.

“There are actually a lot of people at the Mahans' economic level who are facing those same foreclosure fears now, but they cover it up,” said John Landry, a retired architect who now works as a real-estate agent, “so nobody ever knows.”

Many sellers slash prices to sell homes

A Chandler man slashed his price by $60,000 to sell his home so he and his wife could move to Ahwatukee.

An east Mesa women accepted about $25,000 less than her original asking price even after installing carpet, remodeling a bathroom, upgrading the swimming pool and adding a $7,000 hot tub and a $2,000 shed.

Their tactics weren't extraordinary in the ongoing housing downturn, where prices are falling by double-digit percentages in some cases.

"Realtors need to have a discussion with sellers because appraisal value and market value are two different things now," she said.

I just had to post... Department of Homeland Security running "what if a dirty bomb went off in Scottsdale" drills

Frank, this one's for you...

If a dirty bomb did go off in Tempe/Phoenix/Mesa/Scottsdale, would that be a plus or a minus for local home prices? Would desperate homedebtors be able to get out of their debt-bomb mortgages easier for something like this, versus the arson that they're currently considering?

Hmmm... From dirtyscottsdale to dirtybombscottsdale. Don't get any ideas Arizonans!

On Tuesday, at 9 a.m., a radioactive "dirty bomb" exploded at the intersection of Loops 101 and 202, where Tempe and Mesa meet, a half-mile south of the Scottsdale city limits, causing hundreds of casualties and threatening the lives of perhaps tens of thousands more and instantly crippling a major transportation artery.

We are still searching for new victims. . . . Our communications capacity, disaster-relief and evacuation planning will all be under severe strain before the crisis passes.

Actually, Tuesday's disaster was a drill. No more real than an episode of 24. No bomb was actually detonated. No citizens were hurt.

The catastrophe and its aftermath are still being played out this week in several command centers, one in a Chandler hotel.

It's part of TOPOFF 4, a federal emergency exercise, conducted simultaneously in Arizona, Guam and Oregon.

Coordinated by the Department of Homeland Security, it is the fourth and largest of its kind, mandated by Congress before 9/11.

As predicted by HP, laid-off homebuilder illegals now fleeing housing-crash-central Arizona in droves. What's that giant sucking sound now?

Gotta love the folks who didn't understand that the housing bubble and illegal immigration were linked at the hip.

If you're still in that camp, hopefully this article will make you understand.

Illegals built the houses. Some illegals bought the houses (using toxic loans of course). And now that the corrupt REIC work has dried up, and home prices are falling, plus the states are making it illegal to hire an illegal, we've got a big stinking mess on our hands.

Will they stay, go underground, and turn to lives of crime?

Will they go home, leaving ghost towns of run down neighborhoods, empty Wal-Mart stores, and a sea of foreclosures?

Or will they rob the banks on the way out (Countrywide and Indymac of course), doing cash-out refis with bloated appraisals, never intending to pay back the loans?

What a mess. Ay caramba. Here's a report from housing-crash and illegal-immigration-hellhole Phoenix Arizona.

New hiring law nears, migrants flee
Immigration hard-liners cheer, but economic fallout begins

Undocumented immigrants are starting to leave Arizona because of the new employer-sanctions law.

The state's strong economy has been a magnet for illegal immigrants for years. But a growing number are pulling up stakes out of fear they will be jobless come Jan. 1, when the law takes effect. The departures are drawing cheers from immigration hard-liners and alarm from business owners already seeing a drop in sales.

Some are moving to other states, where they think they will have an easier time getting jobs. Others are returning to Mexico, selling their effects and putting their houses on the market.

Adrian, a 34-year-old undocumented immigrant from Sonora, plans to move back to Mexico as soon as he can sell a 2-acre tract he owns in Tonopah.

Adrian said his sister also is selling her house with plans to return to Mexico. He knows other undocumented immigrants who are refinancing their houses and getting cash out so they can return right away rather than waiting for their houses to sell.

How bad is the housing crash getting in Phoenix? Here's a home $220,000 below appraisal - yours to buy or maybe even commit mortgage fraud!

Hell, you find a home in housing-crash-central-Phoenix listed at $220,000 below appraisal, just go get yourself a loan for the appraised amount with no down and no doc (IndyMac might be able to help you there if you hurry), move in, then do the American thing and NEVER MAKE A PAYMENT.

Meanwhile, take the $220,000 and transfer it to your Swiss bank account, and just walk away.

Sweet!

Or if you really want to "own" it, go ahead and buy. And see how quick you can lose another $220,000. Or try to rent it out, and ask yourself why renters would only pay 30% of what your cost to "own" would be.

Welcome to HousingPANIC.

$900000 $220k below RECENT appraisal, builder desperate

Priced to move, this WEEK! Not in MLS. No agents please. This is a Pre-foreclosure.

This home is really just one of about 11 other high-end foreclosure or pre-foreclosure homes in the Desert Hills, Cave Creek, or Carefree areas. What is it you are exactly looking for? We can send you a detailed list of all “instant equity on the buy - value purchases” in the area.

HousingPANIC Stupid Question of the Day

Question for HP'ers: Did HP and the other bubble blogs help save you from doing something really really stupid?

Here's a great and inspiring letter over at the always excellent housingdoom. Some people ask why I do HP. This is why. I imagine all the other bubble bloggers would say the same. To help our fellow man, and to get the word out about the corrupt REIC (realtors, mortgage brokers, lenders, appraisers, builders) who screwed America.

Housing Crash: They're just walking away and turning in the keys in Florida, Nevada, California and Arizona now

Want to see what happens when the speculator roaches flee? Foreclosures everywhere, destroyed comps, unsaleable supply, collapsed demand, and you got it - finally, plummeting prices and a rush for the exits.

It's just the way the world works. Even if the corrupt NAR and stupid realtor bloggers want to tell you otherwise.

"Information provided to the MBA from a variety of sources indicates that the foreclosures in Florida, Nevada, California, and Arizona are heavily influenced by speculators who are walking away from properties now that home prices have started to fall in areas of those states and they face resets in the adjustable-rate mortgages they took out for these homes," the trade group said.