Interesting article on the Phoenix real estate crash... er um market:

[LeeH]

As Valley home market cools, emotions heat up

Glen Creno
The Arizona Republic
Jul. 30, 2006 12:00 AM


Real estate agent Neil Brooks was getting the feeling that his client was about to completely lose it. He'd seen it before.

He had just broken some bad news about her house deal, and she wasn't taking it well. She was pacing, yelling and swearing at him, tossing a cellphone from hand to hand.

"I was thinking, 'OK, here we go,' " said Brooks, who's with Century 21 Arizona Foothills. "Something's going to happen. Something's going to blow."

He was right. The client whirled suddenly and whipped the phone at him. But he was ready. He ducked, and the phone shattered against the wall behind him. The client stormed out of the house.

The rest is here:
http://www.azcentral.com/news/articles/0730emotional0730.html

[wrecktech]

The couple paid $218,000 for their northeast Valley home in 2002 and sold it for $399,000 - $10,000 over asking price - last year. That was a profit of $181,000.

They moved to a $373,000 house on an acre in the north Valley. The Minnesota natives spent $60,000 for things like a block wall surrounding the property, shutters and landscaping, mistakenly figuring the rising housing market would more than reward them when they sold. "We thought we were doing pretty well," said Aaron, a Honeywell electrical engineer. "We wanted to move back to Minnesota. My wife was pregnant. We wanted to be near family."

His job transfer came this spring. With the help of a credit line on the Phoenix house, they bought a $495,000 house in a Minneapolis suburb. They put the Phoenix house on the market for $760,000 in March. Three price reductions later, it still hasn't sold at $650,000, which is $60,000 below its appraised value. The couple pays about $5,000 a month for their four mortgages - a first and second on each house. Holly, a nutritionist, wanted to stay home after having the baby but is looking for a job. Money is tight, and stress is high.


Maybe they shouldn't expect to make a $200,000 profit on the sale.

[turbo6bar]

Negative appreciation is still appreciation.

[sammyg2]

greedy b1tch.
They bought a house last year and with improvements, have $433,000 into it.
She looses it and starts throwing stuff because she can't sell it for $650,000?
Shame on her.

[turbo6bar]

Don't judge her, man. Perhaps, she maxed out the HELOC and can't sell for less than $650k without bringing money to the table. It's not her fault the cheapskate buyers won't realize the true value of the home.

[Porsche-O-Phile]

No sympathy deserved or given.

[cantdrv55]

I'm hoping we don't know the full story. I've never met anyone so greedy as to get pissed off when their house didn't appreciate as much as she wanted. Like turbo6 said, neg appreciation is still appreciation. I bet they owe a lot more than the house will self for in the way of new cars, furniture, expensive vacations, etc.

[speeder]

Remember the good old days when people actually worked for their $$ and homes were affordable and bought as a place to live?

[RANDY P]

Shoot, every month they carry that note it's a $2.5K loss in the books.

Dump the house, and fight another day. Can't believe the greed some posess..

rjp

[turbo6bar]

Originally posted by speeder
Remember the good old days when people actually worked for their $$ and homes were affordable and bought as a place to live?

Why should we stick with old-fashioned notions that have worked for generations? This is the 21st century, ya know!!!

[gregrobbins]

Originally posted by turbo6bar
It's not her fault the cheapskate buyers won't realize the true value of the home.

I have been in the RE industry in Phoenix for more than 20 years. I can get just about any number I want/need for an appraisal. They are worthless really.

True Value: what a qualified buyer is ready and willing to pay.

The house isn't selling for one of three reasons: 1. Overpriced for the market, 2. Poor condition/location of the property, or 3. Not being well marketed.

Last year a dog with a note in its mouth could sell homes. This year the Realtors are having to work and invest marketing dollars to sell their listings. Many new agents in the area (four years or less) have never experienced a seller's market and don't know how to market homes to the few active buyers.

[on-ramp]

there's no such thing as "negative appreciation".

appreciation is " increase in value" . the opposite of this is
"depreciation", or "loss of value"

[turbo6bar]

Two houses on the same north Valley street, similar in size and age, are for sale. One lists for $749,000 and the other for $775,000. A third house came on the market on the same street a few doors from the other two. The new listing was similar to the others in size and age but priced at $659,000.

Reaction: outrage.

"The neighbors were really mad," said Thomas Stornelli, principal of Global Network of Homes in Scottsdale. "They knocked on the door and asked, 'What are you thinking?' For a lot of people, their home equity is their bank. It's like taking money out of someone's bank, their retirement account. People (future buyers) are going to use that house as a comp, even if it doesn't have the same upgrades. It's going to leave a mark."

The owners of the least- expensive home were equally upset. They were in the midst of a corporate relocation and wanted to sell quickly. Suddenly, angry neighbors were confronting them. One night, someone tore down their for-sale sign.

The market has proven everyone wrong. None of the houses had sold as of the third week of this month.

Inverse appreciation is still appreciation.

[on-ramp]

either way you dissect it, the banks make all the money in interest. the home owner never makes any money, unless they sell, downsize, or it's a second home that has appreciated and they sell for a profit.

if it's your only home, it's never a good investment. sure it will appreciate with time, but so will all the others. if you ever decide to sell it, where are you gonna go live?

[onewhippedpuppy]

"For a lot of people, their home equity is their bank. It's like taking money out of someone's bank, their retirement account. "

And I'm supposed to feel sorry for them? That's like investing your retirement in amateur stock trading. You may make a bundle, but the house will all get it back eventually. Might as well go to Vegas and get it over with. I'll take my Roth, thanks.

[charleskieffner]

funny how builders havent stopped building homes here(low end to high end). rule of thumb here. sit on property here 20 yrs and you will be rich. only reasons for future slow down.........lack of water, run into indian reservations, run into BLM/AZ state trust lands(which are sold at auction and proceeds going to school systems.)

my trick................buy 4 stakes and dirt PERIOD! dont care if it has water or power. if it has a nice view and topography IT WILL SELL! and the greatest thing.........I DONT HAVE TO WORK ON ANYTHING! no leaky plumbing, no tile, no electrical. got this tidbit on the 4 stakes and dirt from a 65 yr native realtor neighbor who retired to chino valley.

yes the market has changed. but i think its media driven. the pendulum will swing again.meanwhile i have a 1 1/2 acre of raw dezert that overlooks 4 peaks/superstitions/matazal mtns(rio verde) FOR SALE. surrounding homes are in the mil-2mil range. all horse property. e-me if interested. will make a good buddy deal(need more porsche parts-LOL)

[turbo6bar]

land will surely sell, if the price is really low. Anyone playing the investor/speculating game in AZ will either get stinky filthy rich or reamed with a 32mm torsion bar. If you think you fit the former category, go for it.

Folks, if the housing pain gets really bad, expect a bailout by the Federal government. I'm not talking about Uncle Sam bailing out focked borrowers. I'm talking about bailing out failed units like Fannie Mae and large financial units. The failure of such units would deliver huge shock to the US economy. Privatize the profit and socialize the liability.

[charleskieffner]

have never lost money on raw land. nor will i. infrastructure already there. horseys need big land and there are no shortages of horsey people here. both sides of me have already pulled permits and foundations in. no 32mm torsion bars for me. despite market media frenzy, mega buck homes going in around wickenburg. buddy is developer, if he could find more land there he would buy it. majority of people in rare air are buying second homes. and building mega buck properties. the pendulum always swings. now if i was sitting on house................i'd be sweating it! now as far as my land price...............ITS NOT LOW and never will be....................location location location!

[sammyg2]

I saw a news story the other day that was of interest:
The McMansions are tanking big time, but smaller normal sized houses are holding strong in Orange County.
If you have a 3500 sq. ft. house it isn't worth 2 mil anymore, but if you have a 3 bedroom 2 bath house it is holding it's value.
This has always been a good rule of thumb, but is even more pronounced today.
Most buyers can still afford $800k but very few can afford twice that.
My house is worth 7% more than one year ago.

One of my neighbors built a mcMansion one street over. Largest house in the neighborhood by far, on a regular lot. Bad idea.
I appreciate the fact that his house will bring the area values up slightly, but I doubt that he appreciates the rest of the houses in the area dragging his value down.

[charleskieffner]

even here in the raw dezert, people are buying 20 30 yr old homes, blowing them down, and building mcmansions. all people want is big land and location. have 2 custom home builder buddies, they are busy as hell building customs.