I took a quick spin on zillow.com (you know you love it) today to check out the freefall in home prices in my old 'hood, Phoenix Arizona.
It wasn't pretty.
I also looked at real estate foreclosures and noticed a bunch of units in my old development heading to auction. Gee, what a shocker. When "ownership" prices skyrocketed to three times the cost of renting, and flippers were buying at any price, you just knew how this one would end.
And end it has. And now, it's a long, long, long way back down.
And the clueless homedebtors and cheerleader realtors in Phoenix still have no idea what hit 'em.
October 11, 2007
Random look at housing crash through zillow zip code graphs. Here's a slice of Phoenix (85323). Any questions?
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12 comments:
Justice
Looks to be only a 10% drop for far...
Marky Mark
But Greg SWann said Phoenix had year round golf!
no worry
swann has already fired up the trailer and is just about to cross the mexican border
OMG a $25K decline in a year after prices doubled in the previous 2 years.
Someone send in the National Guard!! This is a catastrophe.
Does zillow just not work for areas where homes don't move very often? I just looked up my neighborhood and it says that my house value is around $390,000 and we bought the house for $320,000 2 years ago and can't find a seller to pay $300,000 for it.
When "ownership" prices skyrocketed to three times the cost of renting
That's where I can't understand how anyone thought houses were actually worth those prices and would continue to rise
Basic economics lesson for dummies (and FBs)
The actual true market value of a house is based on what one is willing to pay to live there; in other words, the current going rent, minus a hundred bucks or so, because in a non-bubble economy, owning is supposed to be cheaper than renting, otherwise there'd be no reason for anyone to own.
Using my rental house as an example, if the going rent on a house is $3,500, that means the mortgage payment should be around $3,300 or less. Therefore one could buy and have an advantage over renting, or could rent the house out for positive cash flow.
In other words, based on the fair market rent, the house's actual value is somewhere below $500,000.
However, this house sold for $1.2M at the peak, or an $8,000 monthly payment on 30-yr fixed. That is called a bubble. What happens now that the bubble is popping is that the house's value will drop until that monthly payment is in line with what the house can rent for (which is also dropping too, now to around $3,000).
Get it? Probably not, if you were dumb enough to "buy" a house and pay more per month than you could have rented for.
Frankie,
Please tell me where is your house? Come on man, I know you are dying to tell us.
Dont forget also to tell us what kind of car you drive and how flush with cash you are. Stop wasting keiths server space with "frankonmics" You are a toolbag!
Same zip code over the last 5 years has gone from an average home price of $133K to $240K. Still gotta be able to sell it for that, I guess.
Hey, it's Drew from Zillow.
I just wanted to let you know, that if you're looking for further neighborhood analysis, you can check out the Quarterly reports that we publish for a variety of MSA's - http://www.zillow.com/quarterlies/QuarterlyReports.htm
Here's the link to the spreadsheet of data for Phoenix, which showed a decrease of 1.7% in Q2
http://www.zillow.com/static/xls/2007Q2_Phoenix_Mesa_AZ_MSA.xls
Our Q3 analysis should be available in another month.
Boy, that graph would look strange if it showed Real Prices (adjusted), using government's inflation numbers or more accurate inflation numbers.
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