WatchPersonally, I would do better if the market had stayed down for years after the crash. I have no plans to sell any of my properties, so appreciation means nothing to me, it is just a number on paper. I am buying properties for the CASH FLOW only, with plans to live the rest of my life off the rental income.
So, when i post facts about the Phoenix market, facts which I carefully study to guide my own investments, I do without a preconceived bias to look for the positive indicators.
Facts such as:
1. Low inventory, Less than 13,000 for the past couple months.
2. Strong demand, over 8000 closed a month for several months.
3. Multiple offers on most reasonably priced homes under 250K, within days of listing.
4. drops in the number of available short sales, under 900 now.
5. drops in the pending short sales, down to 13,000 from 20,000 a few months ago.
6. slightly rising rents in all areas that I own rentals.
7. 30% rise year over year in asking prices.
8. Only modest increase in foreclosures, and notice of future foreclosures, hence no visible pending tsunami of distressed properties, post robosigning scandal.
These facts galvanized me to move quickly, buying 2 more homes over the past 2 months, and putting 4 more under contracts a couple months ago, short sales as those are the best values around today.
Whenever I post my analysis, instantly, they are pounced on by brain dead idiots, calling them lies, etc. Well, if these nitwits care to share some fact and intelligent debate could occur, but instead, they sling insults and market predictions based on wishful thinking rather than analysis. Whatever, sorry your, but you might try reality some time, rather than living in a fictional world!
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Ross, CA
pazuzu says
You may be right. It is a risk, that is for sure. I get that. Of course if he did in fact time it right, he will get the last laugh. If not, he may be screwed.
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Here in Beach cities SoCal we are nowhere near the bottom. We have SFR at 7x median income. This is unsustainable and prices are still falling.
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Scottsdale, AZ
robertoaribas's website
Strategic Renter says
I can believe that. In the above $500k market in Phoenix, where price to rent makes no sense so investors aren't buying, prices appear to still be slowly dropping here.
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Ross, CA
Strategic Renter says
If it is a nice place near the ocean of course it will be 7x median income because the people with median incomes won't be the ones buying there. But it is true that the overbuilt communities inland a bit - Mission Viejo for example - will see prices continue to slide, imo.
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Los Angeles, CA
Well this board USED TO BE a real estate board. Now its ranting, insults and jokes with some RE mixed in to spur more of the ranting.
I used to think housing was in a bubble in 1999. But it wasnt. I was really really sure it was but was using wishful thinking and zero facts or analysis other than 'it cost too much'.
The most powerful people on the planet (the US fed gov, the internantional banks, the federal reserve, the congress, the white house, plus all existing owners) have been passing laws, printing trillions of dollars, letting losers squat for free for years to make prices GO BACK UP. And they did it. NONE OF THIS is temporary. When the feds do something the never stop. All govt programs are permanent. All temporary taxes get extended. Wake up people.
I'm planning on looking to buy starting september to try and avoid the 'must buy b4 school starts' clueless crowd.
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Ross, CA
PockyClipsNow says
I think you will have a lot of choices next winter.
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Tarzana, CA
For whatever it is worth, everyone I work with knows I follow RE and have not bought anything yet here in CA. A coworker comes up to me and mentions her friend who does 'everything' in RE, broker, loans, escrow, etc. told her she does not think it is the housing market bottom here in CA yet, that short sales are just beginning to clear the bank, thus, she is not buying here in CA yet either.
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Los Angeles, CA
Winter should be better time to buy I hope.
To determine future prices you have to accurately guess what the FEDS will do + understand economics. Really difficult.
How does the brain trust here think the nov election will effect RE prices?!? I'm hoping the news is completely taken over by the nonsense, lies, and gibber jabber enought to distract people from thier 'must buy now' mind set (to allow me to buy now!!! ha!).
If Romney is close enouh in the polls to look like he might win (impossible IMO) then this MIGHT create uncertainty in the mind of the house buyer and you MIGHT see a small, very brief time period from Sept to Nov when there are much fewer buyers. THIS IS THE TIME TO STRIKE and make lowballs everywhere. But it might not happen this way. (after 911 for 3 months NO BODDY was buying RE, then it took off to the moon).
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Madison, WI
Lol, it's rising so fast because people like OP scrambling to buy as many as they can.
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Emeryville, CA
http://economywatch.msnbc.msn.com/_news/2012/06/14/12203711-foreclosure-activity-jumps-in-troubling-sign-for-housing-recovery?lite
What about this?
"Foreclosure activity jumps in troubling sign for housing recovery"
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Emeryville, CA
The sand states are still dark red.
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San Jose, CA
I can’t recall any single political rumor e.g. election year, republican or democrat president, new budget etc., to have direct impact on real estate prices, employment, salary or interest rate. So I suggest bypassing it. Low inventory is a fact now and huge number of buyers coming out of fence, intrigued by rising rent and media info: “2012 landlord year”, “best affordability in years”, “lowest interest in years”, “best time to buy”, finely decided to buy.
Has been notice rising inventory in expensive areas, where rich see an opportunity now to get rid of expensive houses. Additionally, some recent cash buyers put their houses for sale. It is hard to bypass to earn extra 50-100K in a very short time. Meaning, they also do not believe the current run-up with prices is going to sustain.
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Emeryville, CA
robertoaribas says
I don't have a horse in this race, but I'm trying to figure it all out. In my estimation (and from the links I provided) I don't see how the other shoe won't drop.
I hope you buy all of Phoenix!
At best, it would seem like a decade of low to no appreciation. Wages are flat, savings are zero, credit is decimated, subprime gone, etc.
Lateral or down would be all that makes sense unless supply was artificially restricted.
Maricopa county has 1 in 249 foreclosed in May? Is that right?
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Emeryville, CA
Couldn't embed my image. :(
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Los Angeles, CA
http://www.housingwire.com/news/fed-considers-funding-lending-program
I'm working on an assumption that int rates will be this low OR MUCH LOWER the rest of our lives.
They are following the japan ZIRP model to sustain the zombie banks/asset prices. Since there will be zero growth - asset prices will go up or stay the same from ever lower int rates. There is a ALOT OF ROOM for rates to go down. Imagine buying a 1m home with a 30 year fixed mortgage at 1%. The payment would be totally affordable. THats where we are headed.
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San Jose, CA
Let see; 500K mortgage with 4% … can buy $742K mortgage with 1% interest.
Japan, US, and the rest of the world are run by the same banking cartel anyway.
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robertoaribas says
Your doing the right thing here. My hats off to you ! your not flipping or gambling on skyrocketing prices. And yes, its better to have zero or low price inflation.
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PockyClipsNow says
In the SF Bay Area and Boston... well above the norm....bubbles..
For LA it was normal.. lucky you in SoCal.
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rooemoore says
My personal take on Roberto is that I'm happy he is successful with his rentals, but I really get tired hearing about his"Phoenix" market all the time. His little "slice" of the housing market there doesn't apply to the rest of the country.
There are many people on here from all over the country (a lot from CA, I'm on the east coast), so constantly hearing from him about Phoenix and his trying to make it apply to everyone else's region gets tiring...
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robertoaribas says
Come on over to the East Coast, I'll show you plenty of markets that not only have stayed down after the crash, but are continuing down.... there's plenty to choose from!!
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PockyClipsNow says
Bingo. I thought houses were way expensive when id do my paper route in 1994. Being born in 1981, my entire life has been falling interest rates, and I agree, there is room to fall. Many peoples understanding of mathematics is so crap that they see the drop from 15%-14% and 5%-4% as being the same, a 1% drop in interest rates, rather then the difference of a 6.7% change vs a 20% change. That's the push/pull relationship we're sliming thru, rates fall 10% to account for what should be a drop in prices,,,,,so we remain flat but lose ground on how much longer that game can be drawn out, as we near the end of our proverbial rope,,,,,at the same time boomers begin retiring and the paradigm shift/inflection point is spread over a long period of time as that large demographic does a role reversal from those who have always driven prices upwards since first leveraging their starter homes and such over the course of 3-4 decades of trading up. At some point they need to sell all that crap and consume whatever savings and equity they have built up with their assets. At least they have the generations younger then them to step in behind them and buy up,,,,,all their crap at perpetually higher prices. Oh wait,,,,,,,,
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robertoaribas says
Boy, that's the truth.... the emotion always "clouds" the rational discussion...
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Laguna Beach, CA
Premium
According to this chart, Arizona still has plenty of owners in negative equity situations (over 40%). How long will people onto their homes if their neighbors are buying into their neighborhoods for much, much less?
Nevada is just shocking, unreal.
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Call it Crazy says
what Roberto is doing is what people in the past were also doing!
buy a home as income property.. separate from personal residence.
priced at "not too hot and not too cold" ...
rent it out and keep it cash flow positive..
before the Bubble mania started -- it did apply to all parts of the country.
yes we are still in this nut case of a mania in parts of California...
where every shack is somehow special and commands at least $1 Million as a starter home.
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Goran_K says
At some point down the road.. they will just have to dump it and call it a day... it just isnt going anywhere...
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Goran_K says
That chart is scary for sure.... I wonder how they really crank those numbers. In an informal poll and research in my area (NJ), there are a lot more with negative equity than the 17%-18% on that chart.
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Los Angeles, CA
You would think every single owner with negative equity would walk. Are they idiots? No. They are squatting for years for free, or getting or got a loan mod, underwater (harp) refi. So thats a lot of squatting, lots of refis, lots of short sales 'in progress'. Total mess, total broken market - but thats how it is when bankers control the place.
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Tarzana, CA
REpro says
Thank Goodness someone else knows this! And yes, with no reliable housing news data in mainstream media, one of the only choices to find real information to base decisions on is to through comments and links on this blog, and yes, some of them are very whiny, including myself.
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Laguna Beach, CA
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thomas.wong1986 says
One would think. Unless the banks allow these people to simply squat for years and years. That chart just shows how messed up things really are.
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San Jose, CA
Roberto, is Phoenix market propelled only by low inventory and speculation OR some fundamentals; rising rent, salary, population, employment got change as well?
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Its rising however not as fast as they say. There is very little new building. Thats almost no where. Mostly people of retirement age. Its an old community. With no building no rising values. Its more difficult for them to have value with no building. Its basically a place for old people to retire.
Bullshit keeps rising new homebuyers floating.
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While Phoenix may be rising (I've noticed a lot of areas rising around the country), it's only going to be temporary until the job market improves. 2012 was pegged 4 years ago has the turn around year, and with elections coming up politicians are kicking the can down the road to keep the status quo.
2013 is when big decisions will be made and the budget cuts will be much worse. Expect another fall sooner than later.
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PockyClipsNow says
There is a bunch of issues there... I believe A LOT are sitting on negative equity but they still have jobs, so out of moral beliefs, they continue to pay their mortgages.
Many believe that this is just a small downturn and housing prices will rise again, they ALWAYS do, according to realtors (I have family members that believe this fantasy)..
I also believe there are A LOT of squaters who have stopped paying, but this is a tough number to determine...
Lastly, I think short sales will be coming back versus foreclosures because the banks have really been beat-up on the sale prices of the houses that have sat for years. They have figured out, take the loss up-front on the short sale and clear the non-performing asset.
So, when you add it all up, the housing market is f*cked for a loooooonnnnggggggg time.....
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Los Angeles, CA
short sales make me crazy
i think HALF the owners are only 'pretending to go thru motions of short selling' so the bank will postpone the FC and/or to get a loan mod with sweet terms.
I have seen short sales with padlocked gates at driveway, agents wont return calls. Also commonly listed as 'tenant occupied no showing possible' (this one i can see being true but WTF HOW DID WE GET HERE you gotta pay 600k for a box but cant look inside!) The whooooole system is rotten.
One major change for the better would be the BANK GETS TO CHOOSE LISTING AGENT vs loan owner choosing his cousin vinny. That would end most SS fraud. Not even on radar - no one cares as its taxpayer money getting burned and SS fraud pays very very well. (the nar would not allow this law).
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Scottsdale, AZ
robertoaribas's website
Strategic Renter says
stupid renter:
EVERYTHING i own is paying over 10% on the investment, even factoring in a months vacancy, and maintenance of $1000 a year per property, numbers I am easily beating. My mortgage properties have mortgages less than 50% of the current rent, so honestly, you couldn't be more clueless...
the only reason YOU post on here, is because you realize you screwed up, and mistimed the market! So sad for you, but control your jealousy as it will eat you up form the inside!
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29 comments
San Mateo, CA
RobertoAribas,
I understand your pain. I am an investor in California property and your counterpart here. I see the tight inventory and the all cash offers. I have seen around 100 properties in the past 3 months as a buyer and have put out countless all cash offers on many of them. So far, I've landed a couple of buys but would love to add more to the portfolio.
Many people wonder where this money comes from. I will admit, I work in the tech industry and joined many successful startups. Was lucky when I rode the 90s boom and was even luckier that I sidestepped the 2000 bust. I've been investing for decades and spent most of my time studying markets. I knew that the 00s where looking dicey from the start and skipped out on housing/real estate altogether. At any rate, these days, I am simply hedging my portfolio by getting into a little bit of real estate.
Now I park myself here to get a read on the pulse of those who wanna have a say about the housing market. I can see both sides of the coin -- to be honest, I can see it go either way. I am hedging by buying a few properties now, and maybe buy more over the years. I have many years ahead and I can afford to wait. So we'll see. It's frustrating to see opportunities dry up, but I'm betting.... the Eurocrisis can come to a head. Already Bernanke is offering a "somber" outlook on the economy. This is an election year and artificial short term rates can only go so far.
I find myself more and more leaning towards a weaker market next year. But hey, nobody here can guarantee what will happen. All i can say is that risk and uncertainty are in the air and we can see further problems develop or escalate in the near term.
What does piss me off is that while the national outlook (or even global outlook) is somber and tepid at best, there is no denying that there appear to be short term bubbles in certain localities and neighborhoods. Unfortunately, these are in areas that I am actively looking to invest in.
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San Mateo, CA
Haha duckhead, I'm female. LOL I'll take sexy young boy toys though.
Shoulda represented myself as a girly sheriff. But then again, you are using a duck as your web visage.
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I think robert probably made some excellent investments and want to share that. If you are jealous then you may need to reevaluate your interest in the content on this site. This site has become less about housing and more about whiny people.
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55 threads
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Scottsdale, AZ
robertoaribas's website
CL says
CL says
NTR filings in arizona went from 4200, to about 4700 a month. Last month, 2100 homes were foreclosed on with 1200 going back to the banks, the others bought for cash at the auction. 8200 homes or so sold last month, so I'm not buying these numbers as problematic. At its height, there wer 12,000 NTR filings in a single month, with over 10,000 for 2 years, and 4000+ foreclosures a month.
Numbers are from memory, not exact, but you get the idea. I watch these details quite closely, as they are what portend market changes.
I hope the bears are right, let prices here fall more, and I can simply buy even more homes with my money...
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Like I said, it's just not as interesting here anymore, not learning anything much here. Just weirdos.