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"I am admittedly more positive on the Phoenix RE market than you - I dont understand where you have information to back this particular statement up? Homes in any part of the foreclosure process have been going DOWN dramatically in AZ over the last year."
Of course, until the NOTS is recorded, we do not know for sure who is in default. How long that process is taking is an answer that we both would find useful. But I see no way of getting hard numbers, except from the lenders themselves providing their Arizona numbers. Is someone who has not paid a house loan since last September in "any part of the foreclosure process" if the NOTS has not been issued? Not officially, but they certainly exist.
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"I guess there could still be some increase in strategic defaults, by I havent seen any real evidence of that happening, and as each month goes by, even those upside down homeowners have more equity building up, so are less inclined to walk. Combine that with any increase in sales prices and that possibility is lessened even more."
Strategic defaults certainly have been a major factor. Even people whose income genuinely dropped would probably have figured out other options if they were not staring at a high five or six figure loss in "value." I just do not see many of those staring at such deficiencies coming to a different conclusion. Their positions of massive negative equity are just too significant. The only non-REO that has sold on my street in the past year was a late 1990s purchase and they still took a loss. I guess that its possible that the underwater people will stick with it. I would not live with such a mistake if there was a legal exit point, and I think that is a rational choice.
I really do not even have an issue with someone buying a house (or even condo) in the Phoenix area for a modest historical price point. Assuming a meaningful down payment, savings, and fiscal stability are in place. But the notion that there is some urgency to outbid a new round of speculators is absurd.
I really do not even have an issue with someone buying a house (or even condo) in the Phoenix area for a modest historical price point. Assuming a meaningful down payment, savings, and fiscal stability are in place. But the notion that there is some urgency to outbid a new round of speculators is absurd.
I agree with you and this sense of urgency is nothing new. They were trying to create this same sense of urgency during the real estate bust. Case in point, this is what one realtor on this forum stated in 2007:
"If you look at some of the prices that are being asked for homes today and compare them with the prices 7 months ago, you'll see that there has already been a 15 to 25% drop in home prices. How much farther are sellers willing to go? I don't believe they are willing to go much farther"
This is why people should do their own research and come to their own conclusions. People should not blindly follow anyone's advice on this forum (me included). Everyone's situation is going to be unique. There are so many variables that are involved with buying a home that adhering to some headline or some generalized sense of urgency may not apply to your situation.
Last edited by azriverfan.; 03-07-2012 at 12:50 AM..
Back in November, you said the AZ market was still dropping. Now we are already talking about a bubble and bust?
Ultimately even the Phoenix metro area will find a bottom and it has certainly been a deep one, to a degree not unlike Detroit and Cleveland.
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45% of the current AZ buyers paid CASH! that is because the home values are super cheap. Hence, people are gobbling up those last minute deals before reality sets in. The values are not returning to 2006 pricing anytime soon.
Many of those cash buyers are flippers pooling investment dollars together. Besides, that still leaves 55% using financing.
One thing I do think, rightly or wrongly is that in order to be able to flip a house you should have to either pay cash or at least put down 50% to get financed or it has to be your primary residence for 1 year.
Or, maybe limit profit to 10% over true costs of bringing it to market if a flip.
Greed is what got us to begin with, let's try to avoid it again.
After thinking about the post I wrote and reading what's been written after I feel the need to clarify what the thinking was.
1 1/2 years ago when we were looking to buy we kept running into houses that had been bought mostly from banks but a few from auction, had a coat of paint and generally new carpet with some landscape cleanup tossed in and less than 90 days later were put up for sale and many times the agent was the owner.
Our agent told us what they paid and it's not hard to figure out what paint/builder grade carpet/landscape costs are so you had their approximate break even price. Well in most cases they'd added $30-$40k to that.
We would've loved a "done" house but it really started to tick me off, with all the REO's out there and more popping up daily and all the dismal information that kept coming out that someone was still trying to continue (what I felt) doing part of what got us in the mess to begin with instead of clearing all these for sale signs at what I felt was an unreasonable profit given the situation.
We ended up buying a "fixer" and doing it ourselves and have now decided to sit on it as our primary residence for a few years.
While it really irked me at the time I guess I was wro..wro...wron...wrong (there I said it) as I guess the market will decide who makes what and if you can get it, great.
Whew, that was tough, but at least I don't have to find condiments to put on my hat prior to eating!
Furthermore, I have quotes from realtors on this site that were encouraging people to buy homes as far back as 2007 and using the same arguments they are now (limited supply; don't know how much longer prices will fall; better get it now). I'm not allowed to identify the speaker of these quotes and provide links to their quotes by the mods because it's interpreted as attacking another poster. This is what one of these realtors said in 2008:
Quote:
March 26 2008: "My personal feeling is that now is a good time to buy because of the supply of great homes at low prices and low mortgage rates, provided that one is going to be in the home for 5 or 6 years. If one may have to sell in 2 or 3 years, then that could be risky. Everyone must assess their own situation as well as the market in the area they're considering. I have about 10 relocating buyer clients that have their community picked out here and as soon as their home sells in their state, they will immediately move here and buy. Several others are here renting until their homes sell. So I see sales across the country as having a positive impact on the sales of homes in the Phoenix Metropolitan area"
Of course, the person above will not hold himself/herself accountable for their failed prediction nor will they remind you of their failed prediction. If you encourage people to buy homes every year, at some point you are going to be correct. There are similar quotes for 2007, 2009, 2010..
Everyone who has been on this forum for a few years knows that Azriverfan loves to save my posts and throw them out there from time to time.
The only problem is that he misinterprets my statements. So let's take a close look at my post that he quoted above, and his interpretation:
Azriverfan said:"realtors on this site that were encouraging people to buy homes".
My statement was: ..."My personal feeling is that now is a good time to buy because of the supply of great homes at low prices and low mortgage rates, provided that one is going to be in the home for 5 or 6 years.
I went on to say:"...Everyone must assess their own situation as well as the market in the area they're considering..."
I did believe that was a good time to buy because prices had fallen so far below the normal trend line from 2000, that I could not envision them going down further.
My relocation clients, that I referred to in the post, were selling their homes in other states in a down market, and coming to Phoenix area to buy more house at much lower prices, so their trade off was an excellent one.
Azriverfan said: ..."using the same arguments they are now (limited supply;..."
That is false. I never made a statement during that time that there was limited supply, because there was an over supply. Nor did I make a "prediction".
At that time, as I mentioned on one or more posts, there was a tremendous amount of inventory and people had great choices that they won't have when inventory declines. They didn't need to make compromises on the criteria for their perfect house.
Today it's much different. It's not only difficult to find a house without multiple offers, it's virtually impossible to find the "perfect" house without having it built.
Azriverfan said: ..."Of course, the person above will not hold himself/herself accountable for their failed prediction nor will they remind you of their failed prediction. If you encourage people to buy homes every year..."
The Fact Is: I did not "encourage" people to buy homes. Nor did I make a prediction. I expressed my "personal feelings" and said "...Everyone must assess their own situation as well as the market in the area they're considering..."
Now let's take a look back to the future:
On my post of March 26, 2008 that Azriverfan quoted,
I said: "My personal feeling is that now is a good time to buy because of the supply of great homes at low prices and low mortgage rates, provided that one is going to be in the home for 5 or 6 years..."
So looking into the future of 5-6 years from 2008, which would be 2013-2014, what will we see?
Today we are seeing prices beginning to increase, up 12% from 2011, and increasing with extremely low inventory below $400k.
If prices increase another 12% in 2012, another 12% in 2013, and another 12% in 2014, then my relocating clients who bought in 2008 will have the last laugh.
The sold a home in a declining market in another state
They bought their perfect home in Phoenix when supply (choices) was plentiful
Plus they got more home for less money than they sold theirs in the snow country for.
Now Phoenix is recovering, before the markets where they came from.
I should add that azriverfan make this statement in reference to my post(s): ..."(limited supply; don't know how much longer prices will fall; better get it now)..."
That is a false statement, and I'll save that post, along with others!!! I have never made, and will never make a statement that says "better get it now"
Last edited by Captain Bill; 03-07-2012 at 08:23 AM..
Well, NOTS is the best statistic to see what might be forthcoming in the way of future bank owned properties, but there are figures available that track how many "30 day lates", and "60 day lates" etc are out there for mortgages, and those have been going down also. (I tried to search quickly to provide a link but too many choices in the search results - but I have CNBC on in the background every day and they report on those figures on a pretty regular basis).
But even just using NOTS, the trend of those numbers (with a few monthly exceptions) have been going DOWN. You seem to be saying we are all of the sudden going to see a large spike in these numbers because there are many people not paying mortgage that will then be foreclosed upon. I just dont see the figures reacting in fits and spurts like that.....
I agree with you and this sense of urgency is nothing new. They were trying to create this same sense of urgency during the real estate bust. Case in point, this is what one realtor on this forum stated in 2007:
"If you look at some of the prices that are being asked for homes today and compare them with the prices 7 months ago, you'll see that there has already been a 15 to 25% drop in home prices. How much farther are sellers willing to go? I don't believe they are willing to go much farther"
This is why people should do their own research and come to their own conclusions. People should not blindly follow anyone's advice on this forum (me included). Everyone's situation is going to be unique. There are so many variables that are involved with buying a home that adhering to some headline or some generalized sense of urgency may not apply to your situation.
Obviously that is another one of my posts that azriverfan has so diligently saved.
However, what he is attempting to show is that I was offering "advice", and trying to create a "sense of urgency". That is not the case.
I simply posted my opinion at the time. I did not believe prices would continue to fall much further.
Notice that I said: "How much farther are sellers willing to go? I don't believe they are willing to go much farther".
And I was correct in that statement. Many, many, sellers were not willing to go further in their price reductions. They knew that eventually the market would turn around. Those who did not need to sell took their homes off the market and have waited.
During this time of the year we normally see more new listings come on the market, but they are coming on very slowly, and I believe (another of my personal opinions, which I am entitled to ) that it's because they are waiting for the market to improve further.
I have advised several people who were interested in listing their homes in the $400-$500k range last quarter, to wait until spring of this year. We just put one of them on the market last week, and we'll put another on in March.
On the forum, I offer factual information from the MLS, the Cromford Report, and my personal field experience and knowledge; and some personal opinions.
None of my posts are meant to attempt to create an urgency. And as I've said before, because I do not know their personal financial situation, nor their needs I don't offer advice on the forum. I only offer advice to my clients, after assessing their total situation.
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(there I said it) as I guess the market will decide who makes what and if you can get it, great.
) that it's because they are waiting for the market to improve further. 
