Arizona Real Estate Notebook

7 responses so far ↓

• 1 Cbass // Nov 30, 2006 at 4:38 pm

  Ewww, Scottsdale has 11 month supply. I know a lot of that is the whole condo conversion thingy but those numbers are not so good for the flippers still in the area in any event.

  I love your graphs John. Keep up the great work. I am a visual kinda guy you know.

• 2 John L. Wake // Nov 30, 2006 at 6:33 pm

  THANKS!

• 3 mrd // Nov 30, 2006 at 9:56 pm

  I would love to see an analysis of how the percentage of potential first time home buyers has changed over the last five years. Do you know where I might find such an analysis?

  For Phoenix, a large reduction in potential first time buyers might not be such a big deal, due to the huge growth from out of state. On a national basis, I would think that a reduction in potential first time buyers would be important.

• 4 John L. Wake // Nov 30, 2006 at 10:47 pm

  mrd,

  Nothing pops to mind but it must be out there.

  I know the conventional wisdom a while ago was that many first time home buyers had been priced out of the market but that move-up buyers were less affected by the price increases.

• 5 mrd // Dec 1, 2006 at 3:52 pm

  It seems to me that if the market were short of first time buyers, then there becomes a vacuum of lowest level move-up houses that would typically be bought by the 1st time buyers. After all, someone has to buy the house that is vacated by the lowest level move-up. This, as stated in my previous post, may not affect high population growth areas like Phoenix. On a national basis, however, this vacuum should matter.

• 6 John L. Wake // Dec 1, 2006 at 4:24 pm

  Exactly.

  For example a lot of people are backing out of the their new move-up home contracts because they can’t sell their current home.

• 7 mrd // Dec 1, 2006 at 7:43 pm

  The question now becomes: Will the real estate market get back to previous levels of first time buyers?

  If the market is to have first time buyers at the pre-bubble levels, then house prices will have to start really falling, or there will have to be income inflation.

  Or, if the market is closing itself off from first time buyers, then America is losing the middle class. This is a very sad but real possibility.

  Can you tell me aproximately when you first noticed that it was “conventional wisdom … was that many first time home buyers had been priced out of the market” ? I bet that the housing prices at the point that this became the prevailing thought, is just above where housing prices will settle back down to.

  I remember watching the stock market bubble and people were saying the craziest things about a year before the crash. Blue sky forever. 20% growth forever. New economy. Old rules don’t apply.

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