patrick.net

I think you need to stop listening to people with an interest in your savings.

Chase Bank - they love to take the next 30 years of peoples money.

Realtors - Don't leave them around your children. They are already stealing a good year of their education, how can you trust them at all

Newspapers - where do you think most of their ad money comes from. It is no where in their interest (actually negative interest) for them to run the truth. They would not live long.

Friends who are in house debt - they are in denial and would love to see you get more leveraged like them. Misery loves company

Rather then asking if housing is continuing to go down (it never really stopped), I would ask why in the world it would be going up. Then, if you can't find reasons for the rise, it will continue to fall. Staying stable at todays prices means more and more foreclosures to come. People are burning through savings/401k/etc to keep their houses. I don't take enjoyment knowing that, but it is fact. They need prices to move up, so the appraisals go with it and they can refi and get of the grid lock. Stable prices from here will kill many.

Do your analysis. Listen to everyone(I mean you can't avoid a Realtor,can you?) but make your own decision,what your heart says - How many time Mr Fed said,there is no bubble(in 2006). Go by your instincts and analysis.

Congrats Roberto.. AZ based on LT prices trends have long past bottom.. so a good deal is possible, not to mention Las Vegas took a real hard bottom on the chart! Lucky for you, you had the media giving the exposure.

http://dqnews.com/Articles/2012/News/Phoenix/RRMAAZ120106.aspx

http://www.housingbubblebust.com/OFHEO/Major/SouthWest.html

robertoaribas says

This blog gets annoying, where nitwits who don't know a thing answer questions they don't have a clue about.

Arizona is fixing to run out of water bub...it does not look good.

My wife and I were looking for houses in the 150k-180k range in Gilbert last summer and there were definitely bidding wars going on. We made at least 6 offers (all REO foreclosures) at asking price and some a few grand over asking and were outbid, and I did check Redfin and saw they actually sold. I figured it was just the families rushing to buy before the school year started but it was the same thru the end of the year. We ended up buying one a few months ago but the inventory has been pretty constant since then.

Check out the graph here and select the "# For Sale" checkbox.
http://www.redfin.com/city/6998/AZ/Gilbert

PC says

prices in IL are still too high in good areas and have you seen the taxes? they went up 33%!

Yes, they have more to fall -- like 99% of the rest of the country. My taxes on my condo in downtown Chicago went down by 20% though the past two years... perhaps you're referring to Lake county?

PC says

they say there are bidding wars going on here in az too. I told them Im not interested in doing anything like that.

chase bank just said (on tv) the housing bottom is here..this is it..we will have a couple years of stabilization (after all the shadow inventory is gone).

First -- "bidding wars" is a very subjective term, so realtards like to throw it around freely. It's true there are houses here in Scottsdale selling for -over- asking. It's rare (has happened twice now on my street in the past 6 months), but it happens if the house is on a good lot, in a good neighborhood, and renovated. Most of the houses out here are cookie cutters and have not had a lot of love in the past few years.

I don't think we're anywhere near the bottom here in Phoenix valley -- only in certain neighborhoods. There's still SO MUCH CRAP on the market here it's not even funny. And the shadow inventory isn't going away any time soon... I think each neighborhood will have it's own bottom -- many are YEARS away from that happening. West valley? Decades away.

JodyChunder says

Arizona is fixing to run out of water bub...it does not look good.

"Data Data Data, I cannot build bricks without clay" ~ Holmes.

http://phoenix.gov/WATER/wsd2011wrp.pdf

robertoaribas says

JodyChunder says

Arizona is fixing to run out of water bub...it does not look good.

The rising sea levels global warming will cause will flood all the deserts in California right up to the border of Phoenix! I'll have ocean front property, and you guys will learn what housing being "underwater" really means!

Unfortunately, you'll be dead! :)

robertoaribas says

there are 18,000 listings on the mls, and 7000 sales a month in Phoenix. that is very tight supply, and the foreclosure pipeline has dropped by more than 50%, so if that imagined flood is coming, there is no sign of it yet.

This blog gets annoying, where nitwits who don't know a thing answer questions they don't have a clue about.

I have had TEN all cash offers at list or better outbid, so yes there are other bidders on the homes that are good deals. To those who say it doesn't happen, well, it really isn't worth my time to debate clueless twits who don't have a fact to base their beliefs on.

When you list for 2001 prices, yah, you are sure to get some bites. Sorry to tell you, but it is now 2012. That is 11 years of nothingness in the desert. I wouldn't be buying right now in there. The probability of appreciation is next to nil IMHO.

GUAB says

First -- "bidding wars" is a very subjective term,

Bidding wars arent worth piss during good and bad times, since its never verifable. You shouldnt have to take anyone word for it unless you were standing there actually hearing the actual counter offer.

robertoaribas says

The rising sea levels global warming will cause will flood all the deserts in California right up to the border of Phoenix! I'll have ocean front property, and you guys will learn what housing being "underwater" really means!

Hopefully it doesn't end up like the Salton Sea! Blech!

robertoaribas says

RentingForHalfTheCost says

I wouldn't be buying right now in there. The probability of appreciation is next to nil IMHO.

NOT IMHO, but rather IYSO = In your stupid opinion. My opinion is based on nearly 20 years of studying this market, and the same analysis that convinced me to sell my 4 investment properties in 2005... Price/rent ratio, supply/demand. Those factors said sell then, they say buy now.When I buy a house today for $76,000 and rent it out for over $1000 a month, who cares about appreciation? My mortgage +tax+insurance+Hoa comes out to $500 and change.

Anyways thats how I role: studying the numbers, knowing the markets, NOT plopping off some opinion about future prices pulled out of my you know what!

Good for you. I seriously doubt much of what you say here though. Your arguments are always littered with the perfect situation. If you want to revert to a personal attack on people then that shows your lack of intelligence, not the other way around. I'd say your 20 years of study did little to improve your character. You might want to spend some time on that for a change.

If you were lucky enough to time the markets, which I highly doubt. Then good for you. That doesn't change the state of real estate now. Things are in a horrible situation. Good people are suffering for the single reason that they thought they could trust other people. Mostly real estate people.

You are a bottom feeder in a low income market. That is not the normal and not what most people here are interested about. Most of us are trying to be able to buy a safe home close to work in the BA. That has been next to impossible up to now, and we see the tide finally changing into our favor. The funny thing about momentum, is that once it starts it takes a long time to fizzle out. The momentum now is that prices are going down. If you think any different, regardless if you are making money with your slumlord lifestyle, then you need more study IMHO. Read the text and do the questions after every chapter. Just skimming over and looking at the pictures doesn't count. ;)

robertoaribas says

it really isn't worth my time to debate clueless twits who don't have a fact to base their beliefs on.

Hmm, facts. Imagine if all information about real estate transactions were actual public knowledge. Then you could just point us to a link of all your wealthy cash buyers and show pictures of them kissing your feet and washing your car trying to buy your amazing properties and make you rich beyond belief.

No, that would be too much visibility, and NAR and all the other cronies associated with it, would lose the power of information. Imagine that world, where fairness and trust actually mean something. Hmmm

robertoaribas says

When I buy a house today for $76,000 and rent it out for over $1000 a month, who cares about appreciation? My mortgage +tax+insurance+Hoa comes out to $500 and change.

That's how ya do it! Now, out here (SF bay area), a lot of people have banked on appreciation to make up for their monthly losses. That's what I object to. Mania that real estate - ANY real estate - is always a great investment.

robertoaribas says

ok you two dipsticks: www.maricopa.gov. My name is unique, you can find all my purchases! calling someone a liar just because YOU sirs are pathetic is really a poor play!

Good for you. Still doesn't make your local market immune. Like I said you are a bottom feeder benefiting from the distressed homes market and distressed renter. All them people who got kicked out of their homes in Phoenix still need a place to live. Just because you are making a buck doing this activity, doesn't mean the market is recovering. You are benefiting because the market is not recovering.

If it is working then run with it, but don't try to convince some sucker in the BA to dump a million on a home only worth 500K at best. That is the situation out here by the pacific.

RentingForHalfTheCost says

If it is working then run with it, but don't try to convince some sucker in the BA to dump a million on a home only worth 500K at best.

When did he do that?? I don't always agree with Roberto, but he never preaches for BA residents to buy.

tatupu70 says

RentingForHalfTheCost says

If it is working then run with it, but don't try to convince some sucker in the BA to dump a million on a home only worth 500K at best.

When did he do that?? I don't always agree with Roberto, but he never preaches for BA residents to buy.

People come to this site to get the true picture of the state of the housing market. There is very few places that are not biased on housing, there is just too much money at stake. Every time someone makes a statement saying the housing market is not where your money should be going right now, Robert beats his chest saying he is a "get rich quick" success story. Not everyone is looking to do what he is using though. The bottom line if you exclude the distressed sales, which are erratic as you would expect, from the equation, the housing market has been sick since 2007 and it is still sick. The knowledge of when the cold ends is key to many of our decisions about housing and one to which I am very interested in. Someone saying people should buy because he is successful at turning distressed into rentals is just misleading to people in AZ and the BA.

Buy if you really need to and can afford a 20% drop in house price over the next few years. Maybe the benefit of owning the home will out weight this drop to some. On a 65K place 20% is not that much, but on a 1million it could mean you are cleaned out.

RentingForHalfTheCost says

People come to this site to get the true picture of the state of the housing market.

Correct. And when you try to stop people like SFAce and Roberto from posting, you are giving a distorted view.

RentingForHalfTheCost says

Buy if you really need to and can afford a 20% drop in house price over the next few years. Maybe the benefit of owning the home will out weight this drop to some. On a 65K place 20% is not that much, but on a 1million it could mean you are cleaned out.

Or maybe housing prices won't drop 20% in the next few years.

tatupu70 says

Or maybe housing prices won't drop 20% in the next few years.

Maybe then won't. I agree. But my opinion is they will, and I am allowed to have this opinion and share it, without being attacked. Robert and SFAce can share their opinions just like the rest of us, but they can't claim everyone is a dipstick or twit for not agreeing. Then they put themselves in a class ahead of everyone. We all live, die, make mistakes, are correct at times, are miserable wrong at other times. I have an opinion that I believed is unbiased and based on sound fact of years of research and experience. That doesn't make me stupid or a dipstick. Post your opinion and lay off the attacks of others. We are all just trying to help, even though some of us will be sadly wrong in our views. I don't think it will be me.

Air conditioning is energy intensive.

So is all of the electricity involved in importing/pumping water (oh yes, sustainable water supply, but that is another story).

Getting around to work, etc. in a car-centric megapolis that was mainly laid out and developed in the car-centric age is also energy intensive.

Hopefully those buyers have factored the future energy costs into their projected ability to make the housing payments in the years to come.

Water is definitely a big problem for AZ, but air conditioning has the nice property that you need it most where the most energy is pouring down on you from the sun all day. I think solar-powered air-conditioning is definitely going to happen.

robertoaribas says

do you have a reading disability?

Let's not insult each other, even if the other guy starts it.

robertoaribas says

AND saying there aren't bidding wars in AZ. is pure BS.

Didn't say anything of the like. They can go crazy bidding in AZ if they want. I'd still warn them that if they are not getting a 20% discount from the norm then they need to make sure they don't mind going underwater in the next few years. Obviously, my take on the market and yours can vary. You can even think we are at the start of a second housing boom.

Your rent verses buy relationship in AZ is much much better than here, but I wouldn't forget to throw in a 1-2 percent depreciation of an investment that is leveraged 5 to 1 into your analysis. Use Patrick's calc if you don't like crunching the numbers yourself. It will should a picture that is not as rosy as originally thought.

bob2356 says

Who cares about depreciation if you are holding the properties long term.

Your option not to care, and long term you will recover and benefit. However, I am analyzing in detail to see when to buy. To maximum the benefit of buying, not to jump in and use time to compensate for jumping in during a down market. I'd rather maximize the profits each year during my life for the best effect when I retire. Even a 1% increase each year will be huge in the long term. To get these you crunch the numbers and make decisions each year.

If I was a landlord, I would crunch the numbers assuming we have 1-2% depreciation for the next 3 years at least. Then if after 3 years my net worth is less than if I sold today, then I would sell. If you get enjoyment aside from the financial side at being a landlord then maybe the loss is something you can take.

My thinking and analysis has done me well so far, and I am never going to not do something because over time I can work myself out of the hole I put myself. I'll just jump over the hole in the beginning to stay on top. ;)

RentingForHalfTheCost says

If I was a landlord, I would crunch the numbers assuming we have 1-2% depreciation for the next 3 years at least. Then if after 3 years my net worth is less than if I sold today, then I would sell. If you get enjoyment aside from the financial side at being a landlord then maybe the loss is something you can take.

WTF are you talking about? Don't you have closing costs in your world? How about declining interest payments? You don't just sell a house like old clothes at a garage sale. Pretty hard to maximize profits giving up 7-8% in closing/purchase costs every year or 3 years or whatever.

RentingForHalfTheCost says

However, I am analyzing in detail to see when to buy. To maximum the benefit of buying, not to jump in and use time to compensate for jumping in during a down market.

To buy for what? To rent, live in, or resell? Option 1 and 2 mean you buy for cash flow or shelter. Your 3 year time frame is meaningless in these cases. So you must be an option 3 flipper. Good call not going into a down market. Good luck, I never had the balls to play that game.

bob2356 says

Pretty hard to maximize profits giving up 7-8% in closing/purchase costs every year or 3 years or whatever.

Don't use realtards. Sell on your own. I know many that have and it was pretty easy they say. I haven't done it, but if I ever do sell again and multiple places I will.

http://www.wikihow.com/Sell-Your-Own-House

I buy to live-in and then resell or maybe rent as I buy again. I guess all three do come to mind in a decision. I still think selling for any reason right now is prudent if you are not making up the depreciation in surplus on the rental. There are many other investment that are actually appreciating at this time. Put is all in a diversified dividend group of stocks if you want something easy. Coke, GE, Comcast, Proctor&Gamble, Verizon, etc. Your make 5% a year just on the dividend and sit and watch the real estate disaster.

robertoaribas says

so the $76,000 home drops 1%?

Makes perfect sense when the 1% is really noise and can be offset by the rental income easily. Like you said, though, jack that up by 10x or even more (1.2million home) and things start getting crazy.

You sound like you got a handle on things. Mop it up out there!