This housing market is unsustainable. Why? And when will things cool down again? (Phoenix: for sale, apartment)

[ajonesaz]

Housing market is crazy, I wouldn't buy right now. A family member put their house on the market last week, one weekend, 50 offers. Asked $475k, highest offer was $530k. Offers came with personal letters and pictures from prospective families to please pick them!

Some were sight unseen, because they have the cash and plan to renovate anyways.

Every home on my street is getting a makeover either before or after it sells. Roll away dumpsters are common sights.

Once landlords can evict, I think a lot more houses will come on the market and prices will drop or stabilize.

The rate won't go up until after midterm elections most likely, so don't expect a big drop any time soon. With as many people moving to the valley, it will remain a sellers market for some time.

[ajonesaz]

Originally Posted by Mike from back east

It's being reported this morning on CNBC that new home sales are starting to sag under the twin issues of higher prices and a slight uptick in mortgage rates. They reported that lumber prices are way up which adds to the cost of homes which they said are out of reach of most working class folks and that mostly the better paid white collar types are main buyers today, along with the corporate / tax cut money.

Current lumber prices are adding on average $24k to a new home compared to last year. I planned on gutting my kitchen this year but I am waiting as right now I would wait 3 months and pay a 30% premium. Plus people are lining up to spend that stimy.

[MN-Born-n-Raised]

Here is a map of the housing appreciation by state https://www.usatoday.com/in-depth/mo...es/6671282002/ . Idaho, AZ, UT, and WA lead the pack with the highest double digit appreciation. Psst. All of the double-digit gains are on the West coast.

[john3232]

Phoenix housing market still insanely hot but not getting any hotter anymore. According to The Cromford Report, the metro Phoenix sold price per square foot in mid-March was up 3.1%… from mid-February. 30-year fixed-rate mortgage rates bottomed out at 2.65% in early January. Last week, rates were 3.09%.
https://arizonarealestatenotebook.co...creasing-fast/

I followed this fellow from 2006 through 2012 and the info. he provided was pretty good.


Also scroll down the page for a look at the roller coaster ride the PHX housing market experienced over the past 20 years.
https://arizonarealestatenotebook.co...glance-charts/

[stub303]

Phoenix bidding insanity will soften, but housing will not crash 30-50% as many buyers are paying cash or all cash. Unlike 2008 where people were putting $0, down, people just don't walk away from cash. Also, thinking a wave of evictions / foreclosures is going to change things is wishful thinking. Evictions - sure. Foreclosures - nope. Too many investors (like myself) standing by with cash waiting for the market to soften.

Thanks to Covid and a remote workforce. Californians are keeping their salaries and able to drop cash in Phoenix as it is still extremely inexpensive.

Also, with a remote workforce, housing is no longer tied to local wages. This is unfortunate for an unskilled laborer from Phoenix, as they are now competing against millennials earning 100K working remotely.

I'm a landlord in my part-time in AZ and manage homes in Gilbert. Every single rental leases the same day with 15+ apps and 95% of them are California refugees who now work remote and are amazed they can get a newer home in a safe area for <2K/month. Several of my tenants have even pre-paid leases 2-3 years in advance so that they can lock in a home should the owner sell.

Supply & Demand.

[MN-Born-n-Raised]

Originally Posted by john3232

Phoenix housing market still insanely hot but not getting any hotter anymore. According to The Cromford Report, the metro Phoenix sold price per square foot in mid-March was up 3.1%… from mid-February. 30-year fixed-rate mortgage rates bottomed out at 2.65% in early January. Last week, rates were 3.09%.
https://arizonarealestatenotebook.co...creasing-fast/

I followed this fellow from 2006 through 2012 and the info. he provided was pretty good.


Also scroll down the page for a look at the roller coaster ride the PHX housing market experienced over the past 20 years.
https://arizonarealestatenotebook.co...glance-charts/

John (AZ RE Notbook) is an economist and takes many of his queues from the Cromford report. I too have been following John since 2008.

IMO, there WILL be a correction. But in a couple of years+. I suspect we will pick-up another 15-20% gain in the next couple of years. Or we all could listen to the guy who started this thread https://www.city-data.com/forum/phoen...orrection.html Back in 2019 he said:

"I rest assure you. MARK MY WORDS!.... Whoever is buying a home in the Phoenix area right now today (i.e. 2019). Their home will very likely decline or drop in value in a few years. ......The Phoenix housing market has reached yet another peak and it will almost certainly decline in value in the next few years."

Well, I marked his words.

[FirebirdCamaro1220]

Originally Posted by stub303

Phoenix bidding insanity will soften, but housing will not crash 30-50% as many buyers are paying cash or all cash. Unlike 2008 where people were putting $0, down, people just don't walk away from cash. Also, thinking a wave of evictions / foreclosures is going to change things is wishful thinking. Evictions - sure. Foreclosures - nope. Too many investors (like myself) standing by with cash waiting for the market to soften.

Thanks to Covid and a remote workforce. Californians are keeping their salaries and able to drop cash in Phoenix as it is still extremely inexpensive.

Also, with a remote workforce, housing is no longer tied to local wages. This is unfortunate for an unskilled laborer from Phoenix, as they are now competing against millennials earning 100K working remotely.

I'm a landlord in my part-time in AZ and manage homes in Gilbert. Every single rental leases the same day with 15+ apps and 95% of them are California refugees who now work remote and are amazed they can get a newer home in a safe area for <2K/month. Several of my tenants have even pre-paid leases 2-3 years in advance so that they can lock in a home should the owner sell.

Supply & Demand.

That's not true. The median home in the valley is well into the 300's now. Extremely inexpensive would be 5 figures

[stub303]

Originally Posted by FirebirdCamaro1220

That's not true. The median home in the valley is well into the 300's now. Extremely inexpensive would be 5 figures

This context of my post was in regards to Californians moving to AZ. I split my time between West LA and the East Valley and a halfway decent 2 bedroom condo in my LA neighborhood is over 1M. So yeah, <400K for a SFH in a safe area like Gilbert 'is' extremely inexpensive.

[Burning Madolf]

Originally Posted by MN-Born-n-Raised

John (AZ RE Notbook) is an economist and takes many of his queues from the Cromford report. I too have been following John since 2008.

IMO, there WILL be a correction. But in a couple of years+. I suspect we will pick-up another 15-20% gain in the next couple of years. Or we all could listen to the guy who started this thread //www.city-data.com/forum/phoenix-area/3109164-caution-home-buyers-possible-price-correction.html Back in 2019 he said:

"I rest assure you. MARK MY WORDS!.... Whoever is buying a home in the Phoenix area right now today (i.e. 2019). Their home will very likely decline or drop in value in a few years. ......The Phoenix housing market has reached yet another peak and it will almost certainly decline in value in the next few years."

Well, I marked his words.

Loved that thread. I bet the guy moved on to watch GameStop on Reddit.



As for housing. It might go up more. It might stall out. It may even go down. Plan accordingly.

[Code Stemi]

OP, weren't you thinking about possibly relocating? You may have changed your mind, but housing options would likely be more affordable if you head east of the rockies (minus Denver).