[mEDITate-OR:
assume that Phoenix is not really "different"...
like San Francisco and Loss Vegas.
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JGBellHimself
19 Nov, 04:33 PM
Well done, John. Glad to see SA pick it up.
However, permit me to share some observations - previously submitted to Dan@Atlantic - & some Phoenix factoids:
ONE, the "average" assessed value of ALL current homes being taxed in Phoenix is now down from the peak assessed values by only 62% - half more, half even less.
The date of the valuations are approximately a year (6-18 months) prior to the distribution of the new assessed values. Since the current assessments, the sales prices have dropped another 10%; and some predict that they will fall another 10% this Winter.
TWO, the current supply of listings for non-foreclosed home in Phoenix has collapsed. Not only are there very few, but the listing prices per sq ft are twice what a foreclosed home is now selling for. So, unless you need to sell - divorce, death, medical expenses, job loss - why do it? They are not, and they probably will not.
Those who bought "in the bubble" would have to pay out, in cash, up to half of their current mortgages to be able to sell. Those who bought before can - but, unless they need to, why do it? Every body still left in Phoenix RE is telling them and U.S. that prices are about to explode upward, as early as next Spring - just in time for the next "selling season".
So, why w/should they sell now?
THREE, "all cash investors" are still buying any and every cheap foreclosure property they can find. There is NO evidence that they are buying anything more expensive.
Some assume that when price start going up - when the cheap foreclosures finally run dry (they run "dry" in Phoenix, not "out" like elsewhere) - they will simply pay a lot more money for the same or lesser homes. That might be true - might it not.
So, might the allegations about the death of Natalie Wood. However, we might have to wait about the same length of time to find out The Truth about that, too.
FOUR, the current job gains in Phoenix and all of AZ is 15,000 this month, but only 46,000 for the last year. The total loss since the collapse was over 300,000. Since you are better at math than the rest of U.S. Dan, what is that about six (6) years to get back to the population that was buying/needing a home at the peak - ie, the current housing stock/supply?
The Good News is that, since there are going to be no new immi-grunts, and those that left AZ construction all moved to Texas, AZ doesn't want or need and will not get any more of Those kinds of people. The Bad News is, after the last re-call election, those in the Arid-Zone, "ah", might have changed their minds.
Even John suggests that there is still over a year's supply of REOs "incoming". We may be near the end - of the Obama Presidency, too - but let U.S. assume - as do John, Artur and Mike Orr of Comford Reports - that we are, or almost are, at the very bottom of the Phoenix collapse.
Why sell now?
Oh, we forgot, we're so really very sorry:
"Buy sky high, sell in a "Death Valley" low, and live happily ever after - on food stamps."
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JGBellHimself
19 Nov, 05:36 PM
John, there are some things you, too, should also look at:
First, AZ still is FAR above the national average for delinquent RE loans. While we are getting better, we still are FAR worse.
And, while 90 days are shrinking, due to more foreclosures; 30 days are now rising.
Second, BofA recently announce a significant increase in their notices of intent to foreclose. That is two steps back from the REO listings. While the REOs are obviously selling, fast, cheap; there is also a huge number of 'in foreclosure process" loans that can, and will, be replenishing the REO "listed" properties. And, BofA and others are moving to increase the foreclosures on seriously delinquents to fill up the "in process RE loans".
So, the empty hole might get filled up, again - sooner than you think.
Third, the REOs are selling for almost exactly what they are listed for; and they appear to be listed for around US$ 20,000 less than they COULD be sold for. The Banksters are leaving 20K on top of the table - to get ready cash.
Are they really that broke?
What the "all cash investors" are doing right now is buying homes for prices that the market will not drop down to for about another 12 to 18 months. Great deals for them; lots a cash for the Banksters.
Fourth, how do you know that all cashers will pay more, when the supply tightens? Why should they?
Far more interesting, is the question:
"Will the Banksters' need for cash go down, as the supply of homes they have to sell to raise it goes down?" Why?
If they are giving away cash to raise cash, now; will they be forced to give away more cash to raise cash later? Why not?
Fifth, with all that home inventory being sold off to all cash buyers, will the all cashers begin to sell - at these depressed prices? Why?
Recently, there has been - as predicted by Bill@Calculated Risk - a huge increase in "multi-unit" construction. And, in FMac RE loans to build them. They might be apartments, they might be condos. Will that expanded "apartment/condo rentals" not compete with the expanded "home rentals"? And, what does that do in a RE market like Phoenix?
True, at some point, IF you still have a job, you might be interested in buying a "new" home, for you. But, why now? And how many of them are there, now?
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JGBellHimself
19 Nov, 05:57 PM
For those outside of Phoenix, you might not know that a large number of "stalled condo projects" are being started up, again - "rising up like a Phoenix".
Many were, or are now being, sold off cheap by the "construction lenders" who have been holding them back on their books. Some banks are lending the money to finish them, finally figuring out that as completed apartments, they are worth more than a hole in the ground. And, can then be sold to raise cash.
That means the finished sales/rental prices will by much lower than the original projects would have been.
Since there is little to no condo lending available, most are being rented out, or soon will be.
These are not merely "shovel ready", many are almost completely built. The time to fill the increased demand for apartments is less than a New York minute.
These "competitive" or "shadow inventory", if you will "homes", are not being counted by John, Mike Orr of Cromford, or by the AZ-MLS.
But, they are by Craig @ the AzRepubic. And, me
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Foreclosures Crashing In Arizona
http://seekingalpha.com/article/308922-foreclosures-crashing-in-arizona
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Malkiel, while what you say is true, for the most part, John might be correct - about what, if not when.
From all that we and he can see, it does look like AZ is a head of the pack. What we do not see, that he - and Artur and Mike Orr of Comford - think that they do see, is that it might start next Spring during the "AZ Selling Season".
While we are not convinced, yet; they might be right.
This time next year we will know - the results of the elections, and the results of their prognostication.
From where we sit the probability of your/their RE and Presidential bets paying off is about the same - as the Super Bowl, the BCS Championships, The Final Four, the World Series, and The Triple Crown.
Nada, Neyt, Zed, Zero...
what part of "No" do you not understand.
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Benny, your point is very well taken, however.
What you may not know is that an AZ Federal Judge, with a 9th CA approval, has ruled that IN the great state of Arid-zone-AH the MERS problems simply do not matter. He has "fixed" the land title problem that everyone else mcCain't figure out how to fix.
That tis "Judicial Activism" with a Red "R" state twist.
Oh, we know R's just HATE those "Judicial Activist" Judges - like the ones in Massachusetts that rule the other way. Red is Good; Blue is bad.
Sadly, upon a closer reading of his decision, he did not actually solve "The Title Problem". What he did say was that The Debtor/Borrower's cannot sue to stop it - nor to fix it.
As "They" once said, like you: "It isn't over till it's over."
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