Profile picture for AZInetFinanceMarket

Is it a good time to purchase a home here in the Phoenix area?

Just looking at whether I should invest my money in a house or keep renting until there are better opportunities here or maybe even buy in the Tucson or Sierra Vista areas instead?
  • October 13 2010 - Phoenix
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Answers (30)

Roberto, this is the post that set me off.

"100's of agents have said "now is the best time to buy in Phoenix" right here on zillow, continuously since 2006... they have all been wrong as wrong can be!!!

This current crop on this post obviously aren't very smart, because not a single one has bothered to address how today is any different than the past 4 years."

Roberto it's the post like these that set people off.  Your really good at letting everyone know how stupid they are just because you didn't hear what you wanted. 
  • October 28 2010
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Jeff, this is my post that set you off:

Factors to think about:
1. today, there are over 8500 bank owned homes on the mls, up from 4300 in April. Such a high number, going into the slow winter season points to price reductions.
2. Arizona is second only to Nevada in foreclosures, so don't look for 1 above to start shrinking any time soon.
3. Arizona is second only to Nevada in percent of people upside down on mortgages, so the temptation for more people to walk away from mortgages isn't going anywhere.
4. Inventory is steadily climbing, by about 1000 homes a month. More supply leads to lower prices.

Those sir,  are facts. They are not my opinion, they are not subject to your opinion that 'now is a great time to buy.' You will notice I told no buyers not to buy, rather I provide buyers with TRUE information. The buyer as always, can draw their own conclusion, make up their own mind.

YOU SIR, tried to personally insult me, by saying "he has only sold 4 homes in 5 years."  You posted this twice. You spent time researching me, with the explicit intent to embarrass me,though it actually doesn't. I am a college professor and investor, I don't ever need to sell another home. 

To quote you again, "Why hold onto a bad investment she owed 600k on a home that the value dropped to 250k. At least we can speak from experience. " Well, I too can speak from experience: the experience to see the bubble coming, and sell my properties. I'll leave it to the reader to decide who perhaps undestands markets better: the agent who didn't see the bubble, and ended upside down $400K and lost a home to bankruptcy, or the agent who saw it coming, wrote about it here on zillow, and sold his properties at huge profits...

So, here is a piece of free advice: if you don't want your personal facts looked up and posted, don't do it to others. You know as in the pot and the kettle.
  • October 28 2010
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Roberto,
You had to go there with my wife.  You had to bring her into this.  Okay you win.  By the way nice pic of you and your wife.

Why hold onto a bad investment she owed 600k on a home that the value dropped to 250k. At least we can speak from experience. And why would you say that I am the rudest lowest class person on Zillow.  You don't even know me.  I just respond to all the crap you spew.  You're so negative about this market and all us realtors don't know our a-- from a hole in the ground.  You say we're all stupid and not smart, well I take offense to that.  I think you're an ignorant person and about your condescending remarks about I must have been real successful as a realtor to lose a house to foreclosure.  I took a hit just like most realtors did in 2008, but I rebounded back.  I was successful before 08 and I'm successful now.  I think you're just mad because someone called you out and won't take your crap and sees you for what you are.  I speak to my clients from experience.  If I had no real estate production to back up what I say I wouldn't be advising people on selling real estate.  Thats all I'm saying I done with this I need to go back to working on my real estate transaction and you can going back to your imaginary pile of money.  Good Luck with your attitude.

  • October 28 2010
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Jeff:

You are absolutely the rudest lowest class person on zillow. Are you this obnoxious in person?

"Now I know why you have only sold 4 homes in the last 5 years because you foist your opinions on your buyers. " wrong. I am well off finanacially, thanks to understanding the bubble. I sold almost all of my rental properties BEFORE the peak, and I have tons of money,  I can afford to give accurate market opinions to my buyer friends. Obviously you couldn't so you had to encourage them to buy, for your own benefit.

 I see your wife seems to have had a home sold at foreclosures in 2008, long after you two were married. You guys must be real successful to lose a property in foreclosure! Now I see why you don't give advice as to when to buy: someone who loses properties in foreclosure is clearly too clueless to know when a good time to buy is!!!!!

I've never lost a home in foreclosure, so you've got me there!  You go big guy!
  • October 28 2010
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Roberto,
Now I know why you have only sold 4 homes in the last 5 years because you foist your opinions on your buyers.  If someone wants to buy you let them buy.  If they want to move into a bad neighborhood you let them it's not our place to steer or tell someone they shouldn't buy just because that is how you feel.  Buyer's need to do their due-diligence we don't have a crystal ball to know what will happen next month.  Clients hire us for one reason and that is to help them find a house not to go out to dinner and hang out.  Roberto, from the looks of it, it seems they hire you to give them reason why they shouldn't buy.  I thought realtors sold houses?  Also I noticed on other blogs you give short sale advice, you shouldn't do that, you have only sold one short sale and you represented the buyer.  All of the short sale negotiating is done on the sellers side how can you give advise when you have never really negotiated a short sale?

  • October 28 2010
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Profile picture for jal74
Glen

I am of the opinion that a REA is a transaction processor.  Essentially a clerk.  Nothing more, nothing less.  A buyer should not ask the opinion of a REA about matters an REA is inherently unable and ill equipped to answer, like whether its in the buyer's interest to purchase a house based on market or other economic indicators.  The REA in 99.999% (that 0.001% percent would be AZrob, simply because I actually know what his educational and professional background encompasses) of the cases should never proffer this advice, not even to quote the NAR. 

However, once an REA proffers that he or she is a "Professional" then that person must give their client a duty of care like all proffessionals.  I am a professional, as a partner at a CPA firm, all the time I tell my clients what is in their best interest and not mine.  Does this mean that I have told my clients that services I could perform for them, charge them for and benefit personally would not be in their best interest?  The answer is wholehartedly YES.  I do it all the time. 

So its not a matter of what the buyer "believes".  If the buyer never asks the question of the REA, then great, sell away.  However, I take a tremendous amount of offense, as a "Professional", of what REA's think they can get away with.  Stop shouting to the rafters that "now is a great time to buy" based on the NAR talking points if an REA want to call himself/herself a Professional.  If the REA wants to simply state that they are an REA or used house salemans and not a professional, then spout the NAR talking points, great, by all means. 

Regards
  • October 28 2010
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You know, you guys need to go to nuetral corners and give this is rest!  If the buyer thinks that it is a good time to buy, then for them it is just that.  If it isn't the right time for someone else, then for them it isn't.  It is an individual thing.

You may think that prices will fall further.  You may think that rates may come down even lower.  Whether you think so or not, if someone wants to buy a home now, they are going to get a pretty good price and they are going to get a very good loan that they can qualify for...no stated income or any such garbage loans that we have all seen in the past.

A "buyers market" is all in the perception of the buyer.  A nice home at a great price with a solid home loan.  Isn't that what the majority of the homebuyers are looking for?
  • October 28 2010
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  "People need to buy if we want to turn this market around."-Jeff Star.

I'm glad to see you take your fiduciary duty to your clients so seriously. I'm sure past and present clients would appreciate knowing that you feel that way, that you value fixing the housing market more than their individual welfare. ... That they needed to buy for the good of the market!

"Do you actually think I feel as if I lost people a ton of money from them buying from me in 2006? "Jeff Star -

Glad to see you care so deeply for how your clients have done!

Its very hard to understand why the entire world holds Realtors in such contempt, with people like you out there Jeff!

  • October 28 2010
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Based on some of the replies here I'll make a couple more comments:

"...Realtor mouths the NAR talking point that PHX is a "Buyer's Market".
I doubt that NAR would make that broad a statement, but I'm replying because some people here have different interpretations of what a Buyer's Market is or is not.  There is a economics-based calculation for market balance:
Months Of Inventory (MOI) at market balance point is 6.5 MOI
MOI greater than 6.5 equals a "Buyer's Market"
MOI less then 6.5 equals a "Seller's Market"
MOIs much greater or much less than 6.5 equal a more profound effect on market values.
MOIs for city-wide calculations are just that, and average across all types, areas, and price points within that city's market.
MOIs for individual properties can and do vary greatly from the city-wide average.


By definition, a Buyer's Market is an over-supplied, nasty and risky
marketplace to buy into, but that is where the bargains are to be found.
Oddly, a Seller's Market (MOI < 6.5) are under-supplied, increasing value, lower risk markets.  So, which really is the best market for a buyer?
Either, and then it all comes down to timing, which none of use could fully understand, because that would require predicting the future.

We can, however, use Fundamentals to help us understand and then predict market movement.  Even using known key indicators can be wrong because wholely unknown events (wars, pandemics, bank collapse, etc.)can change everything.

You can start by going to your state's real estate commission for MOI data (they calculate MOI every month) on your city.  Or, Ask a Realtor to calculate it for you. How?
Place all current Active listings in the numerator, then
Place all Sold listings in last 90 days indenominator,
Divide result by 4 (90 days is one quarter of a year)
Multiply result by 12 (months in a year)
End result is MOI, usually expressed as NN.nnn

The inquisitive mind may then want to calculate MOI for a specific residence.... because that is what we really care about for a client's calculation.  This means that the above math operands use a criteria
targeted to the individual home, for example
Criteria might be"
PHX, $200,000 to $250,000,  Beagle Elementry, zip code XXXXX,
single stroy, 2-car garage, pool.  Then look at Actives and Solds(90)
using that criteria.  As long as you end up with results of 25 or more properties (combined Actives and Solds) your results should be statistically significant, and hence, reliable.
  • October 28 2010
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Jal74,
It is not our job to talk people out of buying homes.  I always explain to my clients the value of the home they are buying, but what right do we have to tell someone that is interested in buying a house not to buy.  If they can afford it then let them buy it.  People hire us to help them find their dream home; it's up to them to decide if they can afford it, not me. I'm a full time real estate agent this is what I do for a living I sell a million dollars a month in real estate, Others realtors on this site do just as much if not more business, but there are some realtors on here that don't sell any real estate and claim they are professional one is on this blog now that has only sold 4 homes in the last 5 years and they seem to be an expert in real estate and everyone else doesn't seem to know what the hell they are talking about according to him.

  • October 28 2010
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Profile picture for jal74
Jeff

you said

As a realtor our job is to sell homes not talk people out of buying.  Do you actually think I feel as if I lost people a ton of money from them buying from me in 2006?  I don't they wanted a house and I sold it to them.  Just about everyone lost money.

That's fine.  However, if thats the case, stop calling yourself a professional.  Professionals have a duty of care towards their clients.  This statement indicates you should call yourself either Real estate agent, used house salesman or whatever.  Just do not call yourself a professional.

Regards
  • October 28 2010
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Maybe I misunderstood you, but I get concerned when it seems like my agent is more concerned about selling me something than in my long term outcome.

I don't expect agents to be financial babysitters for clients, but it would be nice to have them discuss rent cost vs ownership cost, long term appreciation etc. From what I see, there are finally some houses in PDX that pencil out, but not every one does. If it makes sense to buy in the market, the numbers are already there. If not, I think that agents can make suggestions about everything from commute times to schools that do better protect buyers from drops down the line.

The prices during the bubble are really irrelevant unless were are all bringing back no doc NINJA loans or 0% rates for risky borrowers. That what drove the market out of bounds. Buyers should seek value and look for a protected position. You can buy smart without leaving your cheese hanging in the wind. A good agent can help you do that.
  • October 27 2010
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Sunnyview, I don't know where you are located, but here in Phoenix and the surrounding areas you can buy homes under 100k that were 250k a few years ago.  Home prices are so low now you can't go wrong.  All the bank owned and short sales have adjusted the market value and set a new median comp. One of the agents on my team just sold a condo the other day for 15k.  I really don't think we're throughing anyone under a sliding bus. 
  • October 27 2010
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Profile picture for sunnyview
"People need to buy if we want to turn this market around."

Sounds great. So you think that we should just throw more people under the sliding bus for traction. I think that agents can give clients quality information to help them make better decisions without telling them flat out not to buy, but I see very little of that. Clients who are buying can choose property that is better protected from normal market corrections. Maybe agents need to focus on that part of their professional services. I think that clients would appreciate it.
  • October 27 2010
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Roberto, how do you make a living?  I know it's not with real estate.  As a realtor our job is to sell homes not talk people out of buying.  Do you actually think I feel as if I lost people a ton of money from them buying from me in 2006?  I don't they wanted a house and I sold it to them.  Just about everyone lost money.  What about people who did refi and pulled cashout they lost out as well.  People need to buy if we want to turn this market around.  I remember the news stations saying the real estate bubble can't last and it's going to burst and you know what it did, it panicked buyer's and they stopped buying.  Roberto your just like to new.  I will stay that the home prices were way out of sight at the time, but thats just supply and demand.  Roberto I guess in your eyes it would be a good time to buy when the house is free.
  • October 27 2010
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I'm sure Jeff sold a lot more homes than me in 2006 with his "great attitude" while my "lousy attitude" of advising clients about the big market risks did cost me a lot of sales.

Jeff's clients lost a ton of money.

Good job Jeff! You go!!!
  • October 27 2010
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Profile picture for sunnyview
The problem is that agents say that it is time right time to buy is whenever you as a client feel that it's the right time. The problem is that buying based on emotion is often not a good strategy from an investment or financial perspective. Many people who bought on emotion who felt that they would be "priced out" of their market are suffering right now.

I think that clients have reason to be gun shy and they should spend time looking at the underpinning of their market before they decide whether or not to buy. Agents do not need to stand up and tell people not to buy, but I think they should take time to explain how to make a wise choice if clients decide to buy.
  • October 27 2010
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I am in total agreement with Jeff.  If you find the right home at the right price at the right time, it is an awesome time to buy!  Who knows whether prices are going to go a bit lower...I doubt that interest rates are going down any lower.  But whether prices or rates go down any lower or not, when it is right for you then it is the perfect time to buy!
  • October 27 2010
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I don't know what planet Roberto is living on, but obviously he doesn't sell much real estate with that lousy attitude.  Just remember we're a bunch of idiots and he knows everything. Home prices are basically back to where they were in 2002.  It's a great time to buy and don't let people who don't sell real estate tell you any different.  Houses are so cheap in some areas they're practically free they can't go any lower.  Some listings are so low I can't even take them because my office fees are more then the commission.  I alway say do your homework, check the value and if you like the house buy it. If you don't someone else will. 
  • October 27 2010
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Our market is definitely showing some very low priced homes but whether or not that continues to fall is anyone's guess.  I have experienced banks increasing the sales price of the homes because there are multiple offers on them.

We can't ignore the fact that interest rates are historically low which translates into lower payments hence more buying power.  As the rates start going up, the buying power decreases. 

  • October 24 2010
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My personal feeling is that you hve a number of factors to consider...the prices of homes...the interest rates of loans available...an abundance of available housing...your personal financial situation.  I know that there are a great many people that will tell you that housing prices are low, but they will very likely get somewhat lower...still others believe that interest rates will continue to fall...and we are certain to have even more homes on the market in the near future than we have right now.  All of these factors may be true, but the obvious facts are still true...housing prices are low...the interest rates for mortgages are low...and there is a large number of homes on the market.

When I have someone come into my office and asks me whether or not now is a good time to buy a home, what I will routinely tell them is that it is a GREAT time to buy if it is a great time for YOU!

If you find the perfect house for you...if it is affordable for you...if you are getting a good deal...if the location is exactly what you have been hoping for...then I say to you...this is an absolutely wonderful time for you to buy a home!
  • October 21 2010
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Profile picture for the_country_hick
Look at the link below for house price predictions.
Arizona 

Arizona housing prices were rising as a result of federal tax credits, lower asking prices and near record low mortgage rates. But then like the winds blowing across the desert before a storm, the values of homes were swept lower as a result of the home buyers tax credit expiring. In Arizona a major secondary development is already showing evidence of hurting its housing markets.

The new state immigration reform law has scared-off many residents and is projected to forcefully send home prices down in most communities across the state. Despite a federal court ruling halting parts of the new state immigration reform law, illegal aliens are fleeing the state.

It means apartments and rental homes will go without tenants for extended periods of time, damaging housing values. The loss will also result in higher foreclosures, as landlords unable to make mortgage payments due to lost rents, give up paying mortgages all together.

I would wait as prices should drop a lot more.

Prices in Phoenix are expected to go down 12.9% this year and Tucson is expected to lose 10.1% this year. Just wait for next year and the even better pricing to come!
  • October 15 2010
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By the way, It is good time to buy compares with rent, there are low home prices and low interest rate, even with you missed the $8K tax credit. If many would be buyers know those facts later, you have no chance to get the good deal.

  • October 15 2010
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100's of agents have said "now is the best time to buy in Phoenix" right here on zillow, continuously since 2006... they have all been wrong as wrong can be!!!

This current crop on this post obviously aren't very smart, because not a single one has bothered to address how today is any different than the past 4 years.

Lets examine their tired reasons:
1. low rates. Heard it before, last year was the lowest rates ever, until they went even lower, meanwhile prices fell more. Today, the FED announced plans for a quantitative easing 2, with the explicit goal of lowering long term rates in the future. You may find even lower rates by waiting.

2. Its a buyers market. This is agent speak for "I'm stupid, so I'll parrot something I read in a NAR release" The same factors that make it a buyers market may make it a better buyer's market in six months...

3. prices are low... really? are they low or are they dropping? there is a difference, according to the cromford report, prices are dropping right now, meaning they will be lower in the future. ALL phx agents have access to the cromford report, but it has math and logical thinking in it so they mostly don't read it.

Factors to think about:
1. today, there are over 8500 bank owned homes on the mls, up from 4300 in April. Such a high number, going into the slow winter season points to price reductions.
2. Arizona is second only to Nevada in foreclosures, so don't look for 1 above to start shrinking any time soon.
3. Arizona is second only to Nevada in percent of people upside down on mortgages, so the temptation for more people to walk away from mortgages isn't going anywhere.
4. Inventory is steadily climbing, by about 1000 homes a month. More supply leads to lower prices.

This late into a crisis, one would think the "real estate professionals" would have learned something, but I think it is clear most remain blissfully ignorant of ANY concepts of markets and economics.
  • October 15 2010
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Great question and one that our clients ask all the time.  In the grand scheme of things right now is the perfect time to buy.  It is still a buyers market so you will have ample choice in homes.  There will always be skeptics out there that speculate the end of the economic world as we know it, however how can you go wrong with a home that can be purchased for half the price of construction.  Long term you will not be sorry you purchased now.  The only thing to keep in mind is that the Tucson and Sierra Vista markets will make less sense financially in regards to appreciation in the future.
  • October 15 2010
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Interest rates are at an all time low!  Now is a great time to buy!  Who knows what the future will bring.  Why pay off someone else's mortgage? 
Pay off your own.  Buy your dream home today! 

Best of luck to you!

  • October 13 2010
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My first disclaimer is that I know little about Arizona's real estate markets except that many of their markets have been hammered.

My second disclaimer is my crystal ball is in the shop for repairs.

The answers to the buy versus sell question vary according to the marketplace, the segment within the marketplace and all the variables attached to each buyer.

Some buyers could find that even zero down buying is less expensive than renting.  Some could find that buying is more expensive than renting but might still see buying as the conservative and prudent choice because mortage payments tend to stay the same over many years while rents could go up dramatically over those same years.  Hence, for fixed income people, buying can make more sense due to the peace of mind one has in a fixed rate mortgage.

Some buyers witha rosie outlook for their economy could elect to buy to make money on appreciation.  Some may make the opposite bet by renting until the sales market hits rock bottom.

There are technical ways to analyze the market and subsegment of the market you are interetsed in that might help make the buy/rent decision for yourself.  Buying smart can help in that if you get a below market purchase then you have some protection if the market subsegment slides deeper.

Renting can be a smart thing to do if rents are substatially lower than what it would cost to own.  You may miss out on appreciation, but you also may miss out on further down turns.

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Profile picture for jal74
Oh my.

You live in AZ and you have to ask this question?  Quick, name a state that is (a) in the top 3 for foreclosures per capita, (b) top 3 for highest share of underwater mortgages (c) in the top 5 in terms of U6 underemployment

Ding, Ding, Ding.  If you guessed AZ, you would be right

Anyone even thinking about buying in AZ should be required to seek professional pschological counseling.

Regards
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Dear AZ:

Good question. The old investment adage is, "Buy LOW, Sell HIGH". The prices are at lows as well as interest rates. 

Yes, this is a very good time to buy.

Also, certain zip codes are eligible for free grant money when purchasing a foreclosure property from the Arizona Housing Department.

May I wish you the best.

Jeff Masich
HomeSmart 
Arizona Homes and Land





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We have some of the lowest prices and interest rates we will see in our lifetimes. Prices may continue going down...but interest rate are as low as they are going to get. If you are a cash buyer wait a year and see what happens. If you are in need of financing I would buy now.

What are you paying for rent? I guarantee I can find you a much nicer home to purchase that will give you a lower monthly payment than rent.

Keep in mind inflation is not your friend when you are renting.

-Chris
  • October 13 2010
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