patrick.net

....if the market rebounds 20% by 2012...are u dreaming?

http://www.bloomberg.com/apps/quote?ticker=SPCSPHX:IND

Thanks Troy. Doesn't look like anyone actually trades this though. Honestly who would, seems like casino gambling. Bubblesitter, my wife tells me I'm nuts for even worrying but I can't help myself.

are you in school ? in the armed forces, or peace core maybe? just wondering because of the forcasted move.

bubblesitter says

….if the market rebounds 20% by 2012…are u dreaming?

interesting he(she?) picked 10% annual rate of appreciation.

that's the rate most people that don't follow the market use.

robertoaribas says

20% over 2 years is not really 10% a year… its 9.54% annual appreciation…

a) 9.54% is 10% rounding up to zero decimal places.
b) simple average is 10.00%/year.
i'm not going to use a calculator to calculate annualized return when i can calculate a simple return in my head that's essentially the same as the annualized return
d) either way, my post is factually and more importantly semantically correct.

You are completely high if you think there will be 20% appreciation in 18 months.

Listen to Roberto on this one, he has local knowledge from all I can tell by lurking his posts. And he has some good general RE sense as well.

20% by 2012 - Probably won't happen. Then again, most people didn't think the Dow would go up 60+% from the March 2009 lows in a year, but it did.

ch_tah says

20% by 2012 - Probably won’t happen. Then again, most people didn’t think the Dow would go up 60+% from the March 2009 lows in a year, but it did.

Wall street/bank bailouts and increasing unemployment will do that.

For houses, not so much.

Hey all,

Thanks for the comments. I am not high I assure you. Roberto seems like a pro, I am new to the site and have followed some of his posts. I am not an investor and have no interest in cash flow or things like that. Just looking for a place to raise a family. The time frame is determined by a leave from work.

As for Kool-Aid and annual rates of appreciation I am not saying that this will happen. Nor do I think any normal economic model applies to Phoenix so I don't mean the post to be interpreted as someone that thinks housing has bottomed, is a good investment, etc.

I have followed the Phoenix mls as a non-professional. I know about the shadow inventory but only half believe in it. This is based on personal experiences with my current block that I live on. Most of the houses have gone through the foreclosure pipeline already and are re-sold, most are flips, some rentals. Again this is personal experience which is all I have to make decisions based on.

Yes 10% (or 9.5%) seems crazy I fear that several things may come to a head in 2012 that lead to a rapid bounce to the trend line: 1) builders are underbuilding due to less demand, when demand picks up there will be a lag before they can meet demand, 2) foreclosures end or are held off the market, 3) normal population growth, and 4) the first bailers will start being able to qualify again. Underbuilding+ many eager former homeowners anxious to buy again could lead to some serious competition if the shadow inventory continues to be held off market.

Well lotr1978, given your comment on 'seeking a home for your family' rather than investing/timing the market, I'll give a more respectful response. If I were you, I would save my down, invest in things I think are good risks (regardless of housing market) and then buy as soon as I am ready. Who cares what the housing market does? I understand you want to 'hedge' but why connect your hedge investments to the housing market?

I have bought two houses in my life and in both cases I sought a place that was acceptable and desirable to my needs at a price I could afford (using a 30 yr fixed mortgage at the lowest rate possible at the time and with a reasonable down). I did this at a time that was suitable to ME, not by trying to game the market. Did I make profits? No. I did not ride a bubble primarily because I did not live in a major bubble zone. Did I miss the best buy opportunity? Nope, not really, this was the 90's and where I lived back then, things are pretty much the same price (plus a little inflation) now. So, I guess you are worried about what the market does solely because you think it might go up substantially by summer 2012? I personally wouldn't worry about it a bit. Even if you pay a little more because you end up buying from an investor - well. hopefully the investor actually adds some value by upgrading/fixing and it's worth the extra few percentage points. At worst, you pay slightly more but in the meantime you save up for it.

Good luck, and my advice is don't worry about a bubble re-inflation. I think it is very unlikely and in fact you might be better off.

roberto - the real estate market traditionally was a 25 year cycle and i would go way out on a limb and state that just maybe we hit a top in 2007.....so i wouldnt worry about home prices going up any time soon.

..and as far as worrying about your money in the bank...i would be more worried about 'getting that money out of the bank' seeing as the FDIC failed in 2008.........

Roberto

Sorry I don't see how to email you??

Back from the holiday so sorry to bump this up again. Maybe I am noting seasonal lack of new listings coming to market. How solid are these shadow inventory stats they throw around. I am curious if there is a way of seeing houses that have been foreclosed but have not yet resold by zip code.

thanks

I wouldn't buy yet. If RE goes down (as forecasts indicate), you'll lose $ - and if you buy a place that you can afford now, something nicer will come up for the same price or less, and you'll find yourself wishing that you'd waited.

APOCALYPSEFUCK says

In the end, we’ll all be ripping up floor boards to burn to keep from freezing and to beat starving cannibal anarchists to death. Plant potatoes, arm yourselves, spouses and kids and learn how to kill with your hands and feet for the moment when you and yours run out of ammo.

On the other hand, you should buy a place with wooden floors (oak burns slower) and you can plant potatoes in the crawl space underneath. Don't forget to buy guns in case you can't kill with your hands & feet. And save a bit of money to buy a tinfoil hat and use your seatbelt so that the aliens can't suck you out the windows into their ship.

I think the costs of building them will come way way down, as labor costs come down with wages under-pressure, and land costs and all related costs that you are basing COST on now will all come down. Why do others pre existing homes have to come up? Why not as I am suggesting costs coming down.

Interest rates must be higher by 2012 but I hope to pay cash (125k or so) or maybe buy a bigger home and finance only 25-50% of the house. Essentially I'm looking for a 3/2 plus den in the 2000-2400 sqft range. From what I have seen properties in the mid to high 100s range seem to languish on the mls, despite being priced well below peak values.