Here’s a question for readers…
“Is the Phoenix real estate market ahead of the curve when compared to other foreclosure-heavy markets such as California, Nevada, and Florida?”
My take is that the market psychology is more advanced here in the Phoenix real estate market than many of the markets in the country. Perhaps this is due to the fact that we have had here one of the worst residential real estate markets in the country and the hyper-level of activity in short sales and foreclosures has made our ‘education’ and psychological progression more accelerated.
For instance, I spoke to a Realtor at an open house in Irvine, California about short sales. My takeaway is that some of the dynamics of what people are thinking in the market there are things that we already thought about and worked through. It’s like we are on Step 9 of some recovery path and they are at Step 7 or 8 from a mental standpoint.
Looking at the numbers, we have been very stable in terms of inventory while buyer demand has been robust. The market is being more effectively “managed” by those entities that have final decision power over foreclosures and short sales.
As well, pricing has largely fallen to 2001-3 levels, well before the run-up in valuations. Could they really go that much lower even with new inventory hitting the market? I am skeptical.
Southern California – Where is Reality?
Counter this to the cost of a 1,300 square foot ‘cluster concept’ home in Irvine being priced at $589,000, or a 2,500 square foot short sale that needs work and a new stove (the owners graciously took this from the home themselves) priced at $750,000. These prices aren’t priced at levels going back years. These prices reflect values too close to market highs, in my opinion.
My point here is that in my discussion with the Realtor there, it appeared that there is a denial psychology going on. People in that area are holding onto their homes in the hopes of riding out the market. They don’t want to sell now because their equity would be hit hard. They believe that the equity exists in their home so long as they don’t sell.
What do you think? Share your thoughts here.
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I totally agree.
Most of my investors of coming from California paying all cash.
They cannot believe the price here compared to where they live.
Every one of the properties they buy cash flow so they can wait out this market downturn.
Terry S. Smith
Terry@AZLenderForeclosure.com
http://www.AZLenderForeclosure.com