Housing: "Fear" Grips Arizona

Submitted by
CalculatedRisk on Sun, 06/18/2006 - 6:38pm (12 comments)
bbb wrote on Sun, 6/18/2006 - 7:17 pm

Yea John things will be much better in October.... 2011.

Quiddity wrote on Sun, 6/18/2006 - 7:26 pm

Thanks for pointing that article out.

I didn't know there was a Joint Center for Housing Studies at Harvard University.

I suspect they'll be busy for the next couple of years.

dryfly wrote on Sun, 6/18/2006 - 8:00 pm

More weird anacdotes...

I live in an old ex-industrial river town (now lotsa turista money)... they built a bunch of fancy condos in old historic buildings & also on prime overlooks of the river. These are VERY expensive by local standards. Maybe 'cheap' by Cali standards but very expensive by my standards.

A friend of mine is a realtor and said a bunch sold pre-construction (mostly flippers) and the rest were offered upon completion - first wave almost done now. None of them are moving - neither the newly offered units nor the flipper resales.

However just up the block in 'the bluffs' (hills overlooking the river)... older homes are selling like crazy. I counted 5-6 within a 1/4 mile of my home that closed in the the last week alone. We are talking HALF the cost or less of one of these condos.

Now understand - these are OLD homes. Mine is one of the 'newer' ones and it was completed in 1920.

So the locals are blowing off the condos, buying what we always bought, near the prices we always paid... but the condo folks (mostly from out of town btw) CONTINUE to break ground on new developments.

Now are we locals the crazy ones or are they crazy? It is like we live in parallel universes.

Just thought I'd throw that out.

Geoff wrote on Sun, 6/18/2006 - 8:18 pm

What I find amusing is that they lay out everything you need to know, but fail to connect the pieces. They say you need two things for the market to really tank - overbuilding and job losses. Obviously the overbuild is substantial. But then they go on to say how robust the economy is, even though they just said earlier that 1 in $3 is housing related. And somehow, the massive slowdown you are just starting to see isnt going to affect the rest of the economy. I think this is called a serious state of denial.

cm wrote on Sun, 6/18/2006 - 10:29 pm

Geoff: I cannot presume to know much about journalism, but when you are connecting too many dots in your article, you may end up with an editorial.

And certainly you could connect the dots.

Peter wrote on Mon, 6/19/2006 - 5:03 am

In Phoenix they say the areas 'strong economy' should see the housing slide end and balance out by years end. 'Srong economy?' Arizon'a economy is almost totally predicated on in migration and real estate. If a 'real estate panic' or 'meltdown' is now happening in Arizona and Phoenix the so called 'pillars' of that 'strong economy' look very shaky at best- and catastropic at worse.

Bon Scott wrote on Mon, 6/19/2006 - 6:32 am

RE trends in PHX is partly relying upon people in California cashing out of THEIR overpriced houses and buying here.

As Cali erodes, PHX slides, if Cali slides, PHX will start plummeting.

Higher priced houses(though not nice onces)in Tempe have had asking prices drop from $750k to $620k and there's no action.

Kett82 wrote on Mon, 6/19/2006 - 7:33 am

Hard for me to imagine the circumstances of a national housing bust. The little I know about human nature indicates that people will hang on to their homes by any means possible.

However, when I read articles like this one from the Denver Post, I am blown away, it seems some local markets are hurting for sure.

cm wrote on Mon, 6/19/2006 - 7:49 am

Kett82: "by any means possible"

And that's precisely the point. Some don't have the means. Chances seem to be that tend to be those with the most precarious financing, including those who were counting on cashing out within a rather short period.

semper fubar wrote on Mon, 6/19/2006 - 9:00 am

It's a little easier to "hang on with any means possible" if you didn't buy it "with any means possible" to begin with.

There are a lot of people out there owning houses right now who should never have qualified to buy a house to begin with, including lots of flippers who maybe had the means to own one house, but sure shouldn't be owning 5 or 6.

Those people are the little pebbles who will roll off the cliff first, precipating the avalanche behind them.

semper fubar wrote on Mon, 6/19/2006 - 9:02 am

"precipating?" I mean "precipitating."

donna wrote on Tue, 6/20/2006 - 12:16 am

Um, you kinda have to have jobs available in the area you want to move into. And I'm sure the move from California craze would be great, if people were still buying homes in California so those living here could sell them and move, but since they're not...

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