I think the Phoenix housing market is going to bubble again thanks to flippers

[LeeH]

Our <2000 square foot house is poorly designed. It feels smaller than it should. It would be really be nice to have a little more space. Out of curiosity I've been checking out some of the houses for sale close by.

Went to an open house a couple of days ago a few streets over from our house. I recognized the floor plan of one my wife and I both really like. I'm greeted at the door by an agent who tells me the (vacant) house was just reduced to $450K. This seemed very high to me. Looking at the records online I found the house last sold on 7.27.12 for $375K. It was listed a little over a week later for $469K and has been reduced a few thousand/week since.

Today I followed a sign to another open house. This would be a perfect home for us. Culdesac lot, great condition. Large (for this part of Phoenix) lot backing to a golf course and vacant area. Price? $525K. Records show it last sold on 6.14.12 for $375K. Listed a short while later for $539K, now reduced to $525K. I'd buy this house without hesitation for $375K.

I feel sorry for anyone moving into our area right now. They're going to end up overpaying and be underwater when it all comes crashing down again in a couple of years. If prices get crazy again here I'm selling my house and renting until the bubble pops.

[look 171]

How can you or anyone predict what happens in the future? What if it goes up and the economy turns with no burst? Then many people will kick themselves for not buying especially with today's interest rate.

[HardDrive]

Originally Posted by LeeH

Our <2000 square foot house is poorly designed. It feels smaller than it should. It would be really be nice to have a little more space. Out of curiosity I've been checking out some of the houses for sale close by.

Went to an open house a couple of days ago a few streets over from our house. I recognized the floor plan of one my wife and I both really like. I'm greeted at the door by an agent who tells me the (vacant) house was just reduced to $450K. This seemed very high to me. Looking at the records online I found the house last sold on 7.27.12 for $375K. It was listed a little over a week later for $469K and has been reduced a few thousand/week since.

Today I followed a sign to another open house. This would be a perfect home for us. Culdesac lot, great condition. Large (for this part of Phoenix) lot backing to a golf course and vacant area. Price? $525K. Records show it last sold on 6.14.12 for $375K. Listed a short while later for $539K, now reduced to $525K. I'd buy this house without hesitation for $375K.

I feel sorry for anyone moving into our area right now. They're going to end up overpaying and be underwater when it all comes crashing down again in a couple of years. If prices get crazy again here I'm selling my house and renting until the bubble pops.

Partially disagree.

In some areas, yes, there is no reason for prices to go up. But I can tell you that the foreclosure houses in the 'decent' areas of Seattle are gone. Its a sellers market.

I don't know your area, so its hard to gauge where the 'energy' is in your market. Its very local right now.

[Rick Lee]

Subscribing.

[LeeH]

Originally Posted by look 171

How can you or anyone predict what happens in the future? What if it goes up and the economy turns with no burst? Then many people will kick themselves for not buying especially with today's interest rate.

Just smells of a repeat of the last Phoenix housing bubble. When investors are buying up a large number of homes and jacking up the prices, it makes it hard for people moving here to buy a house. They get frustrated and start bidding up prices. Soon, people with no experience, but a little capital start playing because flipping houses is easy money. Now the investors and home buyers are all competing for for the same properties. Things eventually peak when more investors are buying than homeowners. Investors start to panic and dump the properties and then there's too much inventory and prices drop.

I guess the big difference (I hope) between then and now is that the banks will not be so free with the money if prices get out of hand.

[HardDrive]

Originally Posted by LeeH

Soon, people with no experience, but a little capital start playing because flipping houses is easy money. Now the investors and home buyers are all competing for for the same properties. Things eventually peak when more investors are buying than homeowners. Investors start to panic and dump the properties and then there's too much inventory and prices drop.

Rinse. Repeat. Welcome to America.

[look 171]

There's money to be made in every market for wealthy investors. That's always been the case. Look at the last burst in the market. People bought, then came the year 2000 and up it went through the roof by 2005. During college (early 90s), I have been saying the San Francisco market will eventually bust and lots of people will be hurt badly when it kept going up with no end in sight. It was out of control. It never really did come down. As a matter of fact, it stayed up there. Here in LA, some areas people are fighting just to get their bid in. That market is up. One reason is the low interest rate. Investors have always been there, it just seem they are screwing the market up due to the new TV shows and the newspapers. You're telling me about people with no experience are flipping? One dad in my kids class are trying really hard just to buy fix and flip. He drags me to see these POS homes and pays a bunch of border lizards to do the slap-on-paint type of work and sell them for a profit. The TV shows are the ones pushing people to do this. Its like gambling, they make a few bucks and taste easy blood and they kept going overbidding screwing up the market. The market may just hold if the economy goes back up, and interest rates holds. We will see with the new Pres.

[look 171]

Harddrive,

Your Mom (or was it MIL) still here in Highland Park or did they sell? Highland Park has the highest real estate transaction per capita in the US. I read that a few weeks ago.

[HardDrive]

Originally Posted by look 171

Harddrive,

Your Mom (or was it MIL) still here in Highland Park or did they sell? Highland Park has the highest real estate transaction per capita in the US. I read that a few weeks ago.

Its my sister and her husband. They bought at an awful time. Barely hung on. I think they will be alright. They are right up against the border of Pasadena.

[john70t]

Doom 'n gloom reading:

EXCLUSIVE-U.S. banks told to make plans for preventing collapse | Reuters
"U.S. regulators directed five of the country's biggest banks, including Bank of America Corp (BAC.N) and Goldman Sachs Group Inc (GS.N), to develop plans for staving off collapse if they faced serious problems, emphasizing that the banks could not count on government help."

Did the National Association of Realtors Inflate Housing Numbers by 1.6 million in 2010? | Business | TIME.com
"The National Association of Realtors, which publishes the most popular measure of existing home sales, may have included as many as 1.6 million fictitious transactions in its data for 2010. And it wasn’t just last year. "

12 Signs That The Worst Housing Collapse In U.S. History Is Getting Worse - Business Insider
"Approximately 11 percent of all homes in the United States are currently standing empty."

[look 171]

Originally Posted by HardDrive

Its my sister and her husband. They bought at an awful time. Barely hung on. I think they will be alright. They are right up against the border of Pasadena.

Ave 64? VEry healthy area and its going back up again.

[Joeaksa]

My copilots wife is a major realtor in the area. There simply is not enough empty houses in this area right now. My house has gone up $30k in six months and thats not normal.

Its all going to depend on what happens on 6 November. Not trying to take the thread political but depending on how the vote goes, the country will explode with pent up funds and businesses expanding.... or we go over the cliff.

[HardDrive]

"Approximately 11 percent of all homes in the United States are currently standing empty.

Read more: http://www.businessinsider.com/worst-housing-collapse-in-us-history-2011-2?op=1#ixzz29uPPTOKj"

So what? There are oceans of crap houses in crap developments in crap locations. Miles and miles of them. But thats not LA, and thats not Seattle, and thats not (Insert midwestern college town here). Quality is quality.

[look 171]

Originally Posted by Joeaksa

My copilots wife is a major realtor in the area. There simply is not enough empty houses in this area right now. My house has gone up $30k in six months and thats not normal.

Its all going to depend on what happens on 6 November. Not trying to take the thread political but depending on how the vote goes, the country will explode with pent up funds and businesses expanding.... or we go over the cliff.

Agree with you, but some areas Pres or not, it will remain healthy with heavy transactions. I read that in many of the major cities (Not slums), there are just not enough inventory for buyers.

Investors are trading heavily in South Central Los Angeles.

[madmmac]

The bigger the down, the bigger the bounce.

Yes, the prices may be inflated. It's like a car sale, ask x, countered y, signed z.

Az took a huge hit due to speculation as to the continued growth. When the stuff hit the fan, investors, retirees and homeowners took a bath.

I got in due to the down.....and all the moss growing on my back.

[aigel]

Nothing is healthy if money is basically free. I wish they'd start bringing the interest rate back up a notch. All we appear to be doing right now is jack up home prices based on monthly payments. We need to get out of the habit of only looking at monthly cost ...

G

[Noah930]

Originally Posted by Joeaksa

My house has gone up $30k in six months and thats not normal.

Agreed. My house has increased in value 20% in 10 months! I went back and ran some comps as of Jan 2012 for property tax reassessment reasons. We just had the house assessed last week for a refi.

[CurtEgerer]

Originally Posted by HardDrive

"Approximately 11 percent of all homes in the United States are currently standing empty.

Read more: http://www.businessinsider.com/worst-housing-collapse-in-us-history-2011-2?op=1#ixzz29uPPTOKj"

So what? There are oceans of crap houses in crap developments in crap locations. Miles and miles of them. But thats not LA, and thats not Seattle, and thats not (Insert midwestern college town here). Quality is quality.

Good luck with those quality college town properties (and the US economy in general) when the impending higher education bubble pops. It's going to make the current housing collapse look like a $50 overdraft. The higher education industry has been churning out - Chinese assembly line style - generations of kids with worthless degrees and debt they can't possibly pay back (even if by some miracle they were able to find work) ... all fed by easy Sallie Mae/Federal Government loans where nobody gets declined; and all under the false premise that 'everyone should have a college education' and the outright lies of the college marketing/placement departments to incoming freshmen that 'we here at [insert favorite college name] have a 95% placement rate in your degree field!' It's a repeat of the housing crash, except the debt can't be discharged via bankruptcy and you can't sell back your degree to pay off the debt .....

US News: Why the Education Bubble Will be Worse Than the Housing Bubble


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[fintstone]

Sure wish it would spill over into Nevada and New Mexico.