Check out this Anthem, AZ home that was foreclosed on in January. Four bedroom, 2 1/2 bath, almost 2000 square feet. The landscaping is a little rough, but interior pictures look good- no one seems to have stolen the fixtures. Amount that was owed on the property– $285,918 [MLS# 2935822]
Home is currently listed for sale at $190,890. That would be a 33% haircut- if it sold at list, which isn’t going to happen.
Pendings have picked up since the beginning of the year in Phoenix, but so has the number of active listings. There’s going to be a lot of competition for that increasingly rare and elusive creature- the qualified and willing buyer.
Look for the haircuts to get shorter and shorter this year- and more properties will be wearing them. [Many thanks to L for the info!]
Yep, that’s modern Phoenix. There’s never an oversupply of cheap, woodframe homes with no shade, and blow on stucco.
I’ve also never understood the lack of awnings in Phoenix.
I keep saying that prices in West Phoenix will return to a 40 - 60k 4 bdrm house, soon. Heckfire, they’re probably be priced like that in South Scottsdale soon, too.
Add 10k for the ‘exclusivity’ of Northern Scotts. Awahtukee hasn’t a chance, really.
Historical averages? Yeah, let’s think about that. Look at downtown Phoenix, around 3rd street just north of Buckeye… those homes have been there for more than 70 years. Tiny. Cheap. Easy to insulate. Close to downtown services.
The houses of the past, will be the models for the future, I’m afraid.
Expensive to cool stucco boxes in the middle of no where…. they could actually go to zero, in my opinion.
So long, Anthem… we hardly knew ye.
kinda off subject….but has anyone seen the new apartment complex that is practically ON TOP OF the Anthem exit. It looks like it could house thousands of people. Who is moving there? Or was this a developer who figured that he could provide close, convenient, and cheap housing when half the town gets foreclosed?
On January 1st 2008, I was asking everybody how far prices will fall between then and the end of the year (Dec 2008). I had mentioned drops in value of 20 30 or even 40 percent. Quite a few people on this blog basically scoffed at me. I know that the house mentioned above does not represent the average, however this is just February.
AZSALUKI -
We drove by that apt. complex today on I-17.
I’m not sure who would want to live there right next to the I-17, and fight that crawl all the way up there each morning and evening.
Anyone who has come West on the 101 past the 51, Tatum, Cave Creek, etc and then onto the I-17 North during evening rush hour can attest to how much fun that is.
Of course, now there’s construction on the 17 as well, for even more fun at slow speeds!
Just think of all the people that had to think that apt. complex was a good idea to get it bought, funded & built.
Imagine being the leasing agent at that place when it opens, and trying to pitch the “dimishing opportunity close” to potential renters with a straight face.
Was the commercial RE train already running full speed ahead?
Didn’t anyone stop to ask….
For more high percentage schadenfreude, try:
http://phoenixflippers.blogspot.com/
Ooooppps - Sorry
Not “Was the commercial RE train already running full speed ahead?”
But “Was the development RE train already running full speed ahead?”
AZSaluki-
I know which apartments you are talking about. Rental vacancies are already up in Phoenix- there are just too many good rental deals for single family places. It’s hard to believe that this complex will do very well.
I had a son at NAU last semester, so I was going back and forth the Flagstaff fairly often- every time I past that thing I was struck anew, “WHAT ARE THEY THINKING?”
That said, pretty much any new development in the Valley brings that response out in me.
Yossarian:
“Awahtukee hasn’t a chance, really.”
Ahwatukee, which is my hometown (don’t worry, I misspelled it for years) has been around since the 70’s. I think it’s well positioned, being fairly close to downtown, ASU, Tempe and Chandler. I’d like to hear your reasoning for that comment, though.
surak:
I think I recall agreeing with your 20% number on that post. But I saw on Neil’s blog that we’re averaging 3% per month down right now, and that number is rising. Who knows?
Twist-
You mean “WHAT WERE THEY THINKING” That’s all committed money from deals done during the peak. They have to be seen through. Here in downtown Denver we’ve got more than a half dozen construction cranes with highrise lux condos going up and scads of condos/apartments under constuction along our new light rail line. Sort of a mini Miami. Where are the buyers for all of these? I think that was a secondary consideration. It was all about getting the DEAL done.
you think that’s a haircut? check this out:
22614 W YAVAPAI ST, BUCKEYE, AZ 85326.
SOLD: 09/27/2005 for 208000… went into foreclosure… (file number: 20051420871)
US BANK resold it, 02/08/2008 for 105000… (file number: 20080111946)
And the fun is just beginning
zr0ck-
Ouch.
And for those who say, “Yeah, but there’s not a lot of those out there.” My response is that the number of these “haircuts” is increasing rapidly- they are the future of Phoenix real estate.
Here is another example similar to the Anthem home:
http://www.foreclosureexpert.info/2008/02/this-reo-is-a-w.html
I really feel that there is going to be a big decrease (i.e. 20% or more by the end of the year). I don’t feel that will be bottom (in terms of price), but I do think the bottom will occur sooner than a lot of people think (end of 2009 or 2010). This will be followed by years of flat/no appreciation.
The haircuts are going to keep coming, but they will be from builders and banks. The banks are going to eat a huge chunk of this elephant.
The upside to this is, I lived in the Valley in the 80’s and saw the S & L impact first hand. Then as now people were forecasting end of the world scenarios too, but the valley survived. Given the rather large convergence of industry and population growth the valley has seen in the last few years, I would bet that the recovery here will be quicker than most are predicting.
The downside is that people will be shut out of home ownership because the banks will shut them out, not because they choose to rent, but self-preservation of the bank will loom large via 10 - 12% interest rates coupled with 750+ FICO scores.
My two Ameros: The idea that the post-RTC recovery will occur again will prompt many to hang on to their uneconomical holdings, thus prolonging the pain. How long, who knows, but I think the “how much” lies in the traditional relationship between incomes and prices.
jasaz98-
It took the housing market in Phoenix seven years to recover back in the 1980s, it seems quite likely that this one will take at least that long.
I still figure it’s the end of the housing market as we know it, but that doesn’t mean it’s the end of the world.
I’m looking forward to a new, better, housing market- just not anytime soon.
twist -
Back in the 1980’s we had a little different scenario unfolding. The state was predominantly mining and real-estate. We have many more facets of upward mobility in the form of industry (medical, semi-conductor, aerospace and defense). These industries have higher paying professions then say the mining or housing (which both are usually blue collar in nature and overtime is the only way to higher income). Not to give you your due on the point, my statement is purely speculative, but given the rise in the industries and prospective salaries, accompanied with continued growth via population increases, Phoenix Metro has a better than small chance at cutting the estimated 7 years drought to say 4 years.
In the end the financial industry will look a whole lot different and it takes time for people to forget the damage brought on by greed. So look for a repeated cycle of the housing industry when the Gen Y group hits the age to begin buying homes. It will repeat, why, I don’t understand it, but my money say’s it will.
Here’s an REO I was watching a couple months ago. I walked by and although there was no landscaping, the interior looked barely lived in from where I could peek in. Needless to say, someone jumped on it right away. Still, it’s a sign of things to come.
MLS #2898481; 13513 W Verde Ln, Avondale, AZ 85338
4014 sq. ft.
Jan. 2006 sale price: $563506
Feb. 2008 sale price: $320000
That’s a 43 percent drop. Ouch.
An update on the house that started this thread: It last sold for $285,918, however the debt was something less than that. This house also went pending on Monday at a price very near or at the ask price. This house was the lowest priced per sq ft in Anthem for homes of similar size. I was touring the market on Monday and was planning to offer on this house. The buyer got a pretty good deal. This home sold at very close to what the builder’s cost would have been for a 2005 home.