Inventory is declining. The housing market is stabilizing. It’s a great time to buy.
Do these phrases sound familiar?
They should, because the real estate community was using the same talking points five years ago leading up to the housing boom, which proved to be as sustainable as ice hockey in the desert. Investors and speculators have come back, consumers still can buy homes they can’t afford, and housing prices fluctuate with the faintest monsoon breeze.
It all begs the question: Will Arizona, and particularly Phoenix, learn from their real estate mistakes and break free of the boom-and-bust cycles that define our economy?
“Probably not,” said Jay Butler, director of Realty Studies at Arizona State University. “I don’t think we’re really going to change things. We’re hearing some of the same verbiage as the boom market.”
Think tanks, politicians, developers and academics have hyped population growth and urban sprawl for decades — in many cases, for their own benefit. Before the recession and housing crash, how often did we hear about
“People get caught up in the growth,” he said.
Monique Walker has been a Realtor for only six years, but she has experienced the ups and downs firsthand. In January, it was taking an average of 12 months to absorb existing homes on the market. Now, it’s slightly over four months.
“In only eight months, our market has completely turned around,” said Walker, who is with Re/Max Achievers in
Short sales and foreclosures have fueled home sales, as homes priced under $150,000 are the hottest commodity, followed by properties under $250,000, she said.
That’s the price point investors crave.
Since opening in January, Leveraged Acquisitions LLC has been purchasing homes for 50 cents on the dollar, racking up at least 28 properties in
“The bidding wars are back, and that’s no fun,” said Frank Kelly, who launched the company with Jeff Kadlec and Michael Rodrigues.
They believe professional investors are getting a bad rap for artificially inflating values.
“We all played by the banks’ rules,” Rodrigues said. “We just believe in the free market, and ultimately people are responsible for what they do and don’t do.”
Investors have picked up inventory, and that’s surely welcomed by Valley homeowners who have watched values plummet for more than a year as foreclosures hit record highs.
Bill Young, CFO of West Valley National Bank said in some cases, background checks on borrowers are more detailed, and lending standards are tougher.
“We got away from that in the mortgage industry and banking industry and did a whole lot of mortgages that should not have been done,” said Young, who sold his
Still, many local bankers have said too many homeowners are qualifying for loans through the Federal Housing Administration. Under FHA guidelines, first-time home buyers only have to put down 3.5 percent on homes valued at less than $340,000.
Young put in a bid in mid-July on a
John Vatistas thinks long-term normalization of
“Not without continued economic expansion, relocation of quality companies to the
He primarily blames Wall Street for the housing meltdown.
“Let’s face it: Wall Street’s unquenchable thirst for profits, coupled with the fact they essentially bribed the rating agencies to play their little financial manipulation games, was a recipe for disaster,” he said. “If mortgage companies didn’t have a willing Wall Street to sell their crap loans to, there would be no mess to clean up.”
Get Connected
Russ Lyon Sotheby’s International Realty: www.russlyon.com
Leveraged Acquisitions LLC: www.dropbidstoday.com
