Nice map of U.S. population growth by county! If you click through, you’ll be able to click to get an audio analysis. It’s very well done. I might try that.
See this post for more and comments from readers on how it affects Arizona real estate markets.
{ 13 comments… read them below or add one }
Cbass 03.24.07 at 8:18 pm
Here is a link to the irrational exuberance bbryan spoke of and Bill Johnson could not link to. John what do you think?
http://www.investingintelligently.com/wp-content/uploads/2006/08/a_history_of_home_values.png
R. Shillers premise is that adjusted for inflation, housing prices natural state is around the 100 mark. As you can see lately we kinda blew that 100 thing out of the water. I dig on his premise because after pondering on it for a bit I realized that rationally housing CAN NOT increase faster than inflation as a general rule. It is impossible I say! If it did then the cliché “buy now or get priced out forever” would actually be true. As we all know this is NOT TRUE! People have been buying and selling houses in this country for quite some time and will continue to do so in the future. There must be new buyers to stimulate the move up/down market. As wages increase home prices can increase thus the link to inflation. Seriously, take a minute and think about it. Tell me this does not make sense…
Ken44 03.24.07 at 8:43 pm
My guess is 50-yr mortgages will be commonplace in the not too distant future.
Badgerbacker 03.25.07 at 9:36 am
I think Shillers arguement applies well to commodities such as bread. Its a produt we all use, and is consistent whether we buy it in Phoenix or Detroit. But if it was$20 per loaf, we would eat another carb source. Thus the price stays relatively stable. Housing is different. In general, we need/want homes in nice neighborhoods, close to the central downtown area, in a relatively warm climate. This is what makes Chandler more desirable than East Moorhead, MN. So why didn’t this “bubble” hit in 1990 vs. 2003? Bunch of reasons: Massive econimic boom in the last 20-years, incredibly cheap money, aging population, massive income growth, tourism. And thankfully for Phoenix, economic growth, aging population and tourism aren’t going to stop.
Cbass 03.25.07 at 11:41 am
I think Shillers research is based on housing and not bread by the way. There are alternatives to buying a home as well as bread. My rent is 800 dollars and I live in a nice safe neighborhood. To buy a house I would need to spend at least 1600 in a similar area. I think I will keep saving for now. Others must agree with me as the Phx housing stock is up to 57K+ according to Zip Realty. An all time high…
Ken44 03.25.07 at 7:13 pm
Cbass:
Where do you live that you can rent a 1500 sq ft home for $800? How far are you from Phx?
Rents have skyrocked in Chandler for example. What was $875 two years agoa now rent in the $1150 range.
Ken44 03.25.07 at 7:27 pm
-Others must agree with me as the Phx housing stock is up to 57K+ according to Zip Realty. An all time high…-
It appears so…
Sold March 1-24 ‘07 3,968
Sold March 1-24 ‘06 5,144
Percent change: -23%
Total inventory as of this morning: 49,533
Ouch!!
Badgerbacker 03.25.07 at 7:41 pm
CBass, I responded to your assertion that housing prices can not rise faster than inflation. I understand there are other “housing” options, but statistically 2/3 of people will own homes-and those people want to live in a nice community, with good schools, and a warm climate. This bodes well for Phoenix, and not so well for Detroit.
Cbass 03.26.07 at 6:40 am
Badger,
I disagree with you completely.
Ken,
I never said my apartment is 1500 sq. ft. You made that assumption on your own. There are condos for sale in my same area that are similar in size.
Housing prices doubled, I was informed the other day my rent would increase by 2 dollars starting in May…
Badgerbacker 03.26.07 at 6:54 am
Cbass-
You can disagree, but I have 5-years of proof on my side.
Ken, in fairness to Cbass, you can rent a 1500 square footer in Gilbert for $1400/month. That’s a pretty good deal considering things.
Cbass 03.26.07 at 5:24 pm
Badger,
The last 5 years prove nothing towards my point. The next 5, 10, etc will prove whether you or Schiller are correct. My money is where my mouth is as I continue to rent, wait, and save.
Are you currently buying investment properties Badge? If you believe RE will outperform inflation then that is as good a place as any for your money.
Ken,
If your looking for a place Mesa may be for you. My buddy rents a nice house in Mesa for $1050 (3 bed, 2 bath, 2 car garage w/ nice sized back yard). Deals can be had if your willing to drive a little.
Ken44 03.26.07 at 6:30 pm
Cbass:
Ask your friend what his home rented for a few years back. My guess is he’ll say around $750-800. It’s only a matter of time before renters start getting squeezed harder. Sure you can move further out and find cheaper rent but who wants to commute for almost an hour to and from work. With all the new people flooding into the Phx metro the traffic is only going to get worse.
John L. Wake - Realtor 03.26.07 at 9:54 pm
I been super busy lately showing homes and haven’t had a chance to join in.
A comment.
One thing about the high inventory I noticed in the last few days is that many sellers aren’t serious sellers. Their properties are way overpriced.
It’s more hobby selling.
If they get “their price” they’ll sell, otherwise they’re not going to let some buyer take advantage of them.
You see whole neighborhoods where the list price is way too high. It like some sort of conspiracy.
These sellers are just not very motivated to sell.
If we hit a recession and people started to lose their jobs, a lot of sellers would get a lot of motivation real quick.
Right now, selling their homes is just a game for many sellers.
If someone puts a psychotic price on their home and they don’t care if it sells or not, they aren’t driving down the market.
Badgerbacker 03.27.07 at 5:31 am
I can testify I am one of those fantasy sellers Gilbert. The house is for sale and overpriced, and frankly, I don’t care if it sells or not. Interesting enough, inventories are dropping in my development, and sales are doing great.