Watch2 articles on the partick news board talked about how all Americans are "bracing for a tsunami of foreclosures..." etc.
Ok, I analyzed Phoenix data:
March: 4500 Notice of trustee sales filed... (90 days before it is possible to foreclose)
2100 cancelled trustee sales
2400 foreclosures.
So, the pipeline of future foreclosures remained exactly the same...
Lets look at the market: 9400 homes sold in March, less than 14000 actively available. So, about 1.5 months inventory. Prices up 7% in just a month... asking prices up 35% over the past year...
In fact, under 150K, in most zips of the valley, there is less than 25 days inventory for sale.
Total homes 30/60/90 days late or in foreclosure: 7% of all mortgages, down from 14% 2 years ago. That is still a high percentage, but today those homes are entering a very tight buying market, compared to 2 years ago, when there were twice as many homes for sale and fewer buyers.
I'm calling the bottom six months ago. there is nothing I can see in any observable data that doesn't predict home prices rising over the next six months minimum.
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robertoaribas says
Yes, you are (have been) AT the bottom and AT normal prices going forward. Enjoy.
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Scottsdale, AZ
robertoaribas's website
thomas:
case-shiller /fhfa have a 3 to 6 month lag time, contract written to showing up in the index, AND your chart ends before 2011... You do realize we are in 2012 now, right? your last data point for Phoenix is based on sales contracts written 15 months ago...
I believe that chart, along with case-shiller will show strong price drops when they come out going forward from today.
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robertoaribas says
yep! but you are further in the correction than the Bay Area.
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Scottsdale, AZ
robertoaribas's website
I agree. I don't see/read about many areas of California that sound like good investments. It is just a coincidence, that I happen to live in Phoenix, and have a background in mathematics to study real estate. This bubble has been an absolute gift to me...
In under 5 years I can retire from my college teaching gig, would there be any place in California I should consider teaching next? like chico state type area? I don't want to live in a big city any more, and want a reasonable cost of living in a nice place to live, with hiking, wilderness etc...
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Laguna Beach, CA
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Wow, Phoenix has fallen really hard. Wish that would happen here in SoCal or at least back to 1997.
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robertoaribas says
Looks like your going to do well. Cheers!
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After I read this post I went on trulia.com and looked at their foreclosure listings. It's impressive, our entire neighborhood is in foreclosure. I might be one of the few not foreclosing out here...
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FortWayne says
Sounds like you don't live in a very nice neighborhood.
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Santa Cruz, CA
You don't need to "analyze" anything. Just use zillow and plug in the California town of your choice.
Try Seaside, CA. Try Salinas, Monterey, Santa Cruz, Watsonville. Try Stockton, Modesto, Fresno, Clovis, etc.
What is difficult for many people to accept is that 1. California was the largest economy in the USA 2. California is now officially permanently broke, bankrupt, fucked. 3. California is now never going to grow its way out of its problems, because of taxes chasing productive business and talent out of the state. (don't bother mentioning the exceptions) e.g. Apple building a $300 million+ facility in Texas, employing 4000 people. (memo to self: buy another $50K of AAPL)
I have a friend here who is very upset about the "housing market". I say "do you mean house PRICES?" He is annoyed his wife didn't let him sell his house when it was once "worth" about $1.4 million. He says the recovery cannot come back without housing coming "back".
I said if he wants house prices to rise again, he may have to wait forever or until he's dead, whichever is sooner.
His kids: daughter lib arts at UCSC, cohabits with loser slacker boyfriend who didn't attend college so works somewhere manual labor. Son, semi-slacker loves to live in his room, only ventures out of it to attend his artsy classes at UCSC (not even liberal arts, something artsy not academic even).
I often ask my friend "So, including your own children, who among their associates do you predict will soon 1. save up $100K for a down payment? 2. qualify for a $400,000 mortgage to buy the santa cruz houses?
If the answer is none, and you then take a stroll around Santa Cruz and Trader Joes.
There is almost no one among the slackers, hipsters, bums, runaways, crazies, aged hippies, grey ponytailed women, etc. who could ever qualify for a mortgage for a $500K Santa Cruz house.
Santa Cruz's bubble has popped and those glory days are over for a couple of decades. I won't be here to see if it reinflates.
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Los Angeles, CA
robertoaribas says
I drove up to my parents place in Big Bear a month ago. Only the second time I used highway 38. Mentone had its charm and Redlands seemed pretty nice. That 38 highway was gorgeous...perhaps the best mountain scenary there is in So Cal. You'd have easy access to the university there as well as CSSB and UCR.
Some of the foothill towns between Glendora and Upland are nice too, and you have the aboved named schools, as well as the small liberal arts schools and Cal Poly Pomona. Prices can be high in some of those areas though.
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Here is my real estate agent's comment about the foreclosure Tsunami relating to the bay area, CA.
1. They are not talking about prime real estate in the bay area but small towns and other states where nothing happens!
2. Hayward currently has no inventory and there is a bidding war.
3. The wave of foreclosures are happening in the overbuilt areas like Idaho, Florida with no economic growth to support jobs there.
4. Most of these were homes people bought as "an investment".
Very interesting...
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Tarzana, CA
Goran_K says
omg, 15K for a livable condo that is at least 125K in SoCal. Interesting, didn't know this about the Phoenix area, thanks.
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Scottsdale, AZ
robertoaribas's website
I don't know about $15K for a livable condo... Depends where you want to live! The best deal I got on the east side of town was $32K for a 3/2 condo, that took a good deal of work to fix up... about $5K and my work. It rents for $800.
That deal can't be found today, it would be more like $55K if it happened at all. But still, altogether, Phoenix is a very affordable place to live.
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Boulder Creek, CA
nspiratn says
I would fire them tbh.
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CrazyMan says
Yeah, I've been thinking about doing just that. Although, I don't know of a real estate agent that wouldn't say that - they do have to make money somehow.
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Mountain View, CA
bmwman91's website
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The Bay Area is still half-inflated. Our bubble was made of a plastic bag rather than soapy water...holes got poked in it & it lost some air, but it isn't really popping until something comes along & slices a big hole in it. At least according to various RE tracking sites, there are tons of NODs & pre-foreclosures in the Bay Area, but they aren't hitting the market in any appreciable numbers. 2012 is going to be a hot buying year, for no other reason than people want it to be because delaying a house purchase for 2 years is "waiting an unbearably long time" for way too many people. Just keep waiting & saving. I don't really see prices dropping, but every dollar you save for a down payment is at least $2 in interest & fees that you don't pay later*.
*roughly speaking. Yeah, I know some OCD person here is going to take issue with it.
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Pleasanton, CA
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thomas.wong1986 says
But he still lives in Phoenix. ;)
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But he still lives in Phoenix. ;)
Umm Phoenix is nice. I live in LA, it' ugly and sometimes not.
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Pleasanton, CA
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robertoaribas says
Phoenix you are probably correct, but nationally I don't think so.
- no wage inflation
- no jobs
- 22% of mortgages underwater
- ballooning deficit
- bankrupt municipalities
The only thing that would turn this housing market around would be a miracle from the maker himself. I heard he is a renter though, and still waiting to buy.
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Tarzana, CA
robertoaribas says
Yes, of course, didn't fully analyze, but still, it wasn't trashed. You make more 'sense' now. I'm sure not everyone knows they can buy a livable property for even 75K to 100K.
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Los Angeles, CA
RentingForHalfTheCost says
Actually, he still lives with mom n dad. He'll never buy.
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Phoenix is one of the few places climbing back up. Interest rates need to stay low for it to last though.
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here is what I've been observing:
1:Yes- inventory is low, but that's normal because the selling season has not started yet. It happens every year and this year is no different.
2: Prices are not really going down that much but not going up either and in many areas there are still slight declines.
3: Ancedotally, there have been numerous houses in our area- a nicer east bay city- that have goen into foreclosure. What most share in common is they were bought at the peak of the bubble. Most are sitting with very steep discounts.
4: You had better have cash money, stellar credit, and good jobs to buy anything. If you have those things then you're in better shape. We've been saving for years and years so we are in that group.
5: Not really bidding wars per say. A lot of homes actually sit for several months before being sold, and this has been true in our area as well. That said- houses that are priced really well do sell quckly. One sold not far from us for $375k and it was a decent house. On the other hand the 450-500k stuff sits for awhile. This might not be true in bubbly areas like SV and the city. I don't know, I don't live there.
So... basically the market is very tame. Not anything to write home about.
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It's coming. Just watch and wait. (You shall see it right in your face in about 6 months.)