Watch1. Foreclosures continue to fall:
http://www.foreclosureradar.com/arizona/maricopa-county-foreclosures
Notice the graph for homes in the foreclosure process? Down from nearly 25,000 a year ago to 17,000 now. In fact, this number has been decreasing by 1500 a month for the past several months, and this month is following form, based on my preliminary count through today on the county website. At that pace, we are 12 months away from hitting zero foreclosures... [that won't really happen, but it gives an idea of how close to finished we are with foreclosures here.
Notice the new filings? down from the 4000 range a year ago, to 2500 now.
2. Inventory is down 20% year over year, and listing prices are rising. think about this for a second: last year, we saw prices jump nearly 30% in Phoenix, and yet inventory is still down? Low supply leads to upward pressure on equilibrium price.
3. Listed prices are rising.
http://www.deptofnumbers.com/asking-prices/arizona/phoenix/
4. case-shiller index is rising.
http://ycharts.com/indicators/case_shiller_home_price_index_phoenix
Case-shiller estimates 16% up in the past year. However, as this is being caused nearly entirely by the lower to mid tiers of the market, those tiers are actually up much more than the general index...
This is the real data for Phoenix/maricopa.
read more truth about this market at my blog site.
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robertoaribas says
Now...just to be thorough, Robert Shiller recently intimated that Phoenix was experiencing something of a rally...IOW 16% YoY jumps are not organic market moves.
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JodyChunder says
yes, obviously, home prices can't rise at that rate, year on year ad infinitum! However, another 10% by next year hardly looks unlikely, with supply down 20% from last year, and foreclosures disappearing from the market. The only wildcard is the short sales. If short sales end in the next two years or so, I'd say current conditions would push prices up 20% fairly easily from today's values...
It's a one time phenomena, this market oversold to a price way too low. Funny thing, even that wasn't low enough for the permbearbrains on here, and so they sat on their duffs waiting and waiting, now they respond with hostility because, in their heart of hearts, they know they completely blew the opportunity of a life time!
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Yup says
many people were never going to buy a home again, a year ago either. Yes, I've had good luck with appreciation, already!
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I agree, rental markets are uniquely hot right now siince people who were foreclosed on still need housing to wait out their credit repair -- and of course, would-be buyers with recency effect. These are usually sellers from the bubble who jumped ship and are still "hording" their equity, renting and waiting out the housing shenanigans. I do not think, going forward say, 10 years, that SFH rentals will be the going concern they are now, and plan to exit property management myself within that time frame.
To be fair, I also think, from a buy-and-hold primary residence viewpoint, there's really no rush to buy.
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Darrell In Phoenix says
darrell, the thing is, I posted FOUR links to facts buttressing my opinions, you pull your opinion out of your posterior, based on nothing more than wishful thinking...
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darrell, so sorry to let you know this, but what your chart shows is a slowing increase... NOT a decrease... So I'm only making money more slowly then I was before... [For calculus literate, the second derivative is negative, but the first derivative is still positive... thus the function is increasing at a slower rate... that doesn't predict anything about the future...]
also, since you keep quoting fistserv, and the good doctor shiller, lets examine a couple of points:
1. NEITHER fistserv, nor Dr. shiller predicted Phoenix prices to go up 30% a year ago. In fact, fistserv predicted prices to fall, which I pointed out on another thread the last time you brought this up...
2. SINCE that prediction was made, Phoenix prices have continued to climb... Not a good start to a price drop, when prices move up 5% in the next 3 months... Start a journey down by going up for a long while?
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Roberto, you just start these threads to troll the psycho-bears, don't you? I have to admit, I never thought that someone posting easily verifiable facts could lead to such...entertainment! Well, except that Darrell and War are on my ignore list so I only get to see what they say when they are quoted.
If I had to bet money, I'd guess that Roberto also owns the Darrell and War accounts and just wants to help keep all of us entertained. C'mon Roberto, fess up!
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I think you might be helped by stepping back from the data a bit, Roberto. I don't see how what you've written fits the big picture.
http://www.myfoxphoenix.com/story/19532585/az-drops-to-no-4-in-national-foreclosure-ranking
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As much as this report tries to be cheery, the fourth graph on Page 2, showing houses held off the marke,t shows we're at 4 million houses being held off the market. What's that about? I think the system is still being gamed. Be careful all you small-timers, and we're all small-timers, the big money is in control.
http://portal.hud.gov/hudportal/documents/huddoc?id=sept_nat2012_sc_final.pdf
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robertoaribas says
I don't hear Robert Shiller making predictions. He states what the long trends and data suggest to him based on his knowledge of housing data going back to 1890. He clearly states that he doesn't know the future, so would not have any way of predicting such short-term trends as a sudden increase in prices anywhere.
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FunTime says
I am not sure from that graph, what they are counting as "homes held off the market" but if delayed foreclosures are included, the trust deed states such as Arizona and California are processing foreclosures much faster than the judicial states such as Florida and New York. Further, you will notice that nearly 3 million homes were held off the market in 2003 and 2004... there was no reason to hold homes off the market then, so this seems to imply that whatever they are measuring, there is only 1 million more of it than during the best real estate time in history...
You guys keep looking for some obscure fact to say that prices will fall... you will always find that obscure fact, but during the past 19 months in Phoenix, that analysis has been dead wrong.
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JodyChunder says
This is my viewpoint until recently. I used to think it is better to have the flexibility in case I lose my job. Now I figure maybe it is better to "own a loan" so that I can squat for two more years. Talking about a messed up sysem and the influence on me... The key is whether I can get a 3.5% down payment FHA loan.
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robertoaribas says
If you're restricting your time frame and region that way, you might make money, but it is unlikely. Nobody can make accurate predictions in such a short time, but maybe you'll get lucky. Good luck!
robertoaribas says
I wonder why the person who wrote the title for that chart said houses held off the market were 'high?' The rest of the report is trying to be so upbeat.
robertoaribas says
Yeah, that was big news in September and does seem encouraging. Illinois and the other states topping the foreclosure list are the ones that had the non-judicial process, or whatever it's called. I don't want to look now.
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robertoaribas says
I believe Phoenix was oversold, bounced back and will stablize. The next down turn will likely come when hell breaks loose. Who knows when it will happen. If you ask me, I would buy a house/loan and hopefully I can squat for 2+ years then.
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Darrell In Phoenix says
thank you for the links to verify those facts... NOT! My links are in the original post...
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All I can say is follow the money, in a manipulated market that's all you can do, then ask, how and why was it so oversold to begin with. If that can happen once, it could happen again, especially if we are looking at less owner occupied units than ever before, which I don't know if that is to be the case moving forward or not.
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everything says
No, you can also stay the hell away from it and put money in places with fundamental strength.
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yeah, like buying 3 bedroom condos for under $40k, when they rent for $800 turned out so bad for me a little over a year ago... the bad paranoid advice on this website is truly mind boggling!
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Mobi says
If this were to take hold in the public mindset in a more widespread fashion, the social ramifications would be a very interesting thing to behold.
My first instinct is to think that it would lead to a public with a more criminal and larcenistic mien -- not a society I especially want to live in. However, maybe a widespread default would serve to put 'the owners" in touch with themselves. I definitely feel that your dollars and how you spend them make far better ballots than anything you'll tick off in November.
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FunTime says
In Arizona especially big money will take over the housing industry.
I have heard the stories of buying condos for $40K and renting them for $800, then $600. It's a great idea until some one gets hurt, or the home owners association can't take on any more rentals, until there is no bank financing for the building, but I digress.
There are millions of housing units in Arizona and room for millions more. How could there ever be a shortage?
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ptiemann says
This is another post, or comment from you that strikes me as unprofessiional.
You seem intent on giving Real Estate agents, and the Real Estate profession a bad name.
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Sheesh people, stop with the ad-hominem attacks. There are two sides to every coin and I for one want to see both. Some people are investing in this market and others are very bearish. No need for insults.
Good story ptiemann.
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SkyPirate says
Yeah, no kidding all you stupid motherless motherfucking shit turds from hell -- enough with the ad-hominem!
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SkyPirate says
It may be a good story, but a Real Estate agent shouldn't be telling it.
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OK, as long as I'm here, the story of the Honest Info is interesting because I have the same discussion here in Seattle about foreclosures, where they are, and who is buying them, especially in condo projects.
It all starts out great with fantastic returns, but one foreclosure leads to another, and more units become rentals.
The guy here in Seattle has lease optioned some units, but those came back because there is no financing available for the buildings. In another building there was a shooting and property values went through the floor.
OK, so he has the income, and is also shopping in Nevada, his home State. Nevada is doing better, but we also discuss the fact I have always been able to buy a 3 bedroom one, and a half bath home with a pool in Las Veags for about $125K. People sold off behind, and moved into newer, nicer homes for roughly the same price range. In other words, for decades the housing market was kind of slow, no one cared, and people moved on.
In 1998 it all changed, and prices began to creep. In 2003 prices exploded.
So today, when my buddy tells me he just bought a screaming deal in some Henderson sub division for $125K I say so what?
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The mortgage rates also play a big part. My cousin in Dallas just refinanced their house - 15 yrs for 2.75%.
I can't believe rates are that low. Plus with Dallas and Phoenix prices, the payment is going to come to very low levels. In CA, if the prices were down to 200-400k for good houses, the hosuing market would be very robust at these rates.
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Oh, snap! Phoenix listed prices continued to increase this week! Don't take my word for it, look at an independent site for verification:
http://www.deptofnumbers.com/asking-prices/arizona/phoenix/
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Who the hell cares for Phoenix prices? That market crashed hard and is unlike nearly every other RE market in the nation that's not bear Detroit, Las Vegas, or Florida.
Phoenix prices have absolutely no friggin bearing on prices in California. None. So I don't care. Good for you that you did so well. You had an incredible opportunity. Congrats. Now stop bragging!
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Phoenix area
for sale: 5,777 results
Pre-Market: 7,804 results
Source:zillow
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Quigley says
Say, I have a smashing idea! If you don't care about Phoenix market info, you could um,,, oh,,, say not read threads with titles "Honest Info, Phoenix market"? I mean, what did you expect to find in this thread, a recipe for pumpkin soup?
bubblesitter says
Phoenix area, sold in a month is 6500 or so... In other words, those numbers mean precisely diddly hear, 2 months inventory, not any kind of problem at all!
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Quigley says
Who said they did, and what does California have to do with anything? Lots of people care about Phoenix prices - it's one of the largest metros in the country, duh.
This is a housing board, not a California housing board. Don't read the Phoenix threads if YOU'RE not interested in the Phoenix market trends.
Seriously...
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robertoaribas says
Huh? How?
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In october, Phoenix cleared roughly 1500 foreclosures out of the pipeline. Simply stated, there were 1500 more completed and cancelled foreclosures than new notices...[according to Michael Orr, local professor of real estate studies, we had 13,000 in the pipeline, while foreclosureradar.com has it at 17,400] At 1500 a month however, we are on a trajectory to zero in 9 to 12 months, depending on whose numbers you use, if this trend continues...
I thought I'd get a jump ahead, and see if November shows anything different, since some national numbers had indicated a reversal in foreclosure trends... NOPE! so far, we have had 400 more homes leave the foreclosure pipeline, then have entered. Precisely the same rate as last month so far.
My gut feeling, is that two powerful effects are going to propel this trend on: The fast price rises in many Phoenix zips are beginning to melt away a lot of the negative equity that can lead to foreclosures, and the high volumes of refinancing under harp.x are going to remove many too.
A phoenix market, without much foreclosure or short sale inventory could be coming, and that will be a big change from the past six years.
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Using my own methodology, I just searched all filed foreclosures through the local mls tax information link, and found 11,700 as of today. I am feeling more and more confident that by next spring/summer, foreclosure listings are completely finished having any significant effect on the Phoenix housing market.
Digging further, in 3 of the hardest hit zip codes of South Phoenix, 85040,85041,85042, when I look at single family homes built since 1990, under $140K, I found 36 for sale. Fully 16 of these are distressed sales (short sale, bank or HUD owned) of the other 20, all but 5 were investor flips. (the investor bought either a short sale, or a bank owned home in the prior year, and is re-selling it for profit)
Of the remaining five, 3 were longer term investors selling out, and 2 were normal owners. One normal owner was selling for a loss, the other appeared to be trying to break even.
Why do I analyze this in such granularity? Well, as foreclosures and short sales end, in due time, nearly all of this inventory will not re-occur. Fully 31 of the 36 homes require that a foreclosure or short sale happened for them to be available for sale. As foreclosures and short sales end, this cheaper inventory will disappear.
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Regular Sales Will Rise.
Hi Roberto. How are the acquisitions going? I'm closing on another place Tuesday - but not Arizona. Good inventory is hard to come by.
In other markets I am seeing a resurgence of regular sales.
As prices rise there are owners who were underwater but not willing to do a short sale flooding the market. Many are overpriced as owners put their houses on the market for what they owe - not the current market value (list and pray).
I haven't seen this in the PHX market yet as the price decline was more severe and most who bought at the peak are still underwater. If prices keep rising you will see some - people who put down a lot or people who bought before 2001.
Where I am now the flood of regular sales have dampened demand for distressed sales. Hence I am picking up a few bargains here and there.
I do think there is still a lot of inventory underwater in Phoenix. So I see foreclosures / shorts continuing for at least 3 or 4 years. Their impact on prices will be less as there are many more 'investors' than there were in '09 or '10 willing to buy anything that looks remotely like a bargain.
Barring a fiscal cliff tragedy, I think prices will continue to itch up close to replacement cost.
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I found 1835 2+ bedroom rentals for less than $600 in Phoenix
http://phoenix.craigslist.org/search/apa?query=&srchType=A&useMap=1&minAsk=&maxAsk=600&bedrooms=2
I found 25 2+ bedroom rentals for less than 600 in the entire SF bay area,
http://sfbay.craigslist.org/search/apa?query=&srchType=A&useMap=1&minAsk=&maxAsk=600&bedrooms=2
Why are rentals so cheap and plentiful in Phoenix?
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The Professor says
good luck with that... half the listings on craigslist are bs... and lots of those under 600 rentals are in places you couldn't pay me to live...
But then again, last year you could have bought some 2 bedroom condos for 20K in those same neighborhoods... Pure slumlording ain't my thing, so I stuck to the parts of town I know, and have lived in...
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robertoaribas says
Wow! There are that many rentals in Phoenix in slummy areas?
I've worked in Phoenix a couple of times back in the 90s and it seemed like a nice place except for the heat and the sprawl.
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According to Trans-Union credit reporting agency, Mortgages 60 or more days late dropped from 5.49% to 5.41% in the last quarter. A year ago, they were 5.88%, so Nationally, an 8% reduction in a year.
BUT, in Arizona (and California) the drop was much more extreme. Arizona dropped from 7.46% Q3 2011 to 5.62% That is a fairly stunning improvement for just one year, and goes a long way to putting to rest any fantasy theories of shadow inventory coming to market. Several factors in play are likely to sustain this rapid decline in late mortgages going forward:
1. Increasing home values raise some owners to positive equity, drastically lowering their odds of foreclosure.
2. Harp.x refinancing for owners means many people will be paying lower payments, in many cases less than equivalent rent with today's super low interest rates. This too serves as a disincentive to let the home go.
3. Gradually improving economy. revisions to employment numbers have come in, showing the economy has added an average of 177,000 jobs over the past three months. Not stellar, but certainly small positive signs never the less.
The number of homes actually still in the Maricopa county foreclosure pipeline took a big drop in October, according to foreclosureradar.com
04013 - Foreclosure Filings
04013 - Foreclosure Inventories
Notice in the second graph, Oct 2012 has approximately a total of 23,000 distressed property in the pipeline, compared to 35,500 a year ago. It bears thinking about, that the Phoenix market managed a price increase of roughly 20 to 30% on average, while reducing pending foreclosures by 12,500.
This reduction of distressed inventory has actually accelerated at the end of the year, and would leave Phoenix with no distressed inventory in roughly a year and a half. [Even postulating another year or so to handle legacy short sales that aren't in default, as anyone can see, all the data points to the very worst factors of the past six years disappearing from the Phoenix market in the very near future]
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Refuting our resident idiot's claim that Phoenix housing prices are dropping:
Notice the lower tier? flat for 2011, and up from 70 to 100 in 2012 so far? I've been buying in this tier since 2011, and in addition to substantial rental income, a nearly 50% increase in value is... well... very surprising indeed.