Arizona Real Estate - Then and Now

By
Real Estate Agent with Value Added Service, 602-620-2699 SA5376460000
https://staging.activerain.com/droplet/5cfV

While rummaging through my coffee table drawers recently, a headline surfaced from a past newspaper I saved from 2004.  Imagine the memories flooding back from the roller coaster housing market we've all experienced.  Reading the comments gives pause to the results and the predictions from this article. 

 

Immediate memories of our 2004 housing market included hopeful home buyers hitting open houses in droves, houses selling quicker, and a new-found optimism amongst the public.  New home subdivisions were flooded with buyers, tents erected in the parking lots, and builders releasing lots by lottery.  What a comparison to todays’ housing market timing!

 

Saving this newspaper from October 8, 2004 seemed like a wise thing to do given the October 19, 1987 newspaper in my same drawer about the stock market free-fall.  Having been in that industry formerly, the 2004 newspaper seemed like an interesting item to save at the time.  

 

Perusing this newspaper issue it appears the writer is cautiously optimistic but warns of a pending real estate disaster.  Most people in 2004 thought this was the beginning of something everlasting.  Ha, not for long.

 

In October, 2004, home sales were 25% higher than the year before and the article reports of an over-heated market.  Still, buyers kept buying.  No one has a crystal ball, but market signs were there and the frenzy continued.  

 

It was reported in that article that Phoenix had increased only 9% in appreciation, much less than other markets and that general concern wasn't included for our market as we  hadn't increased as much as others.  However, I remember specifically in 2006 that our market had increased 48% year over year, so the previous years' numbers were low by comparison.  An over-heated market for sure!

 

Real estate is always local, but similar sentiments could be heard around the US during that time frame.  I can remember the rush in real estate to buy homes, increasing construction jobs, and the “irritational exuberance” that existed at the time, phrase coined by Alan Greenspan.

 

Our local market was fueled by investors, both big and small.    Regular homeowners became investors to take advantage of the profits, but smaller ones soon learned that they were too little too late.  Borrowing from equity was a big mistake and loads of folks suffered the consequences.  

 

Home builders worked to eliminate "investors" buying real estate, but falsifying registrations was an issue.  Vacant subdivisions showed up in record numbers thereafter.  Showing homes today I still see some of those abandoned subdivisions in hard hit areas.

 

In 2004, our median home price was $165,600.  Today our Phoenix median home price is $260,000.  A big increase; however, home prices over $500,000 are still down 5%.

 

Reading further, the article goes on to talk about what to expect in the housing market and why.  Predictions of a possible downturn included: 

 

Significant price increases; 25% increase in sales volume; investor purchases doubled; and rental home listings increased dramatically.  

 

If we can learn anything from past experience it's that real estate makes a great investment, but in my hmble opinoni, all things are good in moderation.   Extreme price increases, the strain on the market by newby investors, and fog a mirror financing are all things of the past.  Those signals from this former banker were sure signs of a run away market.  

 

Given the past housing market, the current rise in median home prices,  and the modest interest rates, it's unclear if and when a market correction will take place.  The government seems to have a stronghold on market conditions with consistent low interest rates; however, that's not a stable condition. 

 

We all have long memories of past housing mistakes and the securities that undermined the housing industry, including a lot of other factors.  Outside influences are unsteady currently.  If a housing market delcine is going to happen, we're ripe for a market correction, but who knows when that will happen.  

 

If you're looking to buy or sell a home and want a trusted advisor, give me a call.  

Posted by

Signature

Google plus 1

      http://activerain.com/action/blogs_admin/subscribe?subscribed_agent_id=174467

 

HomeSmart Elite Group                                  

8388 E Hartford Dr., Suite 100

Scottsdale, AZ 85255                                                         

(602) 620-2699   DIRECT

www.AZGreenRealty.com

www.GotGreen.info                  facebook   google plus   twitter   youtube   linkedin   pinterest   

 

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
Home Buying
Location:
Arizona Maricopa County Scottsdale
Groups:
Posts to Localism
Dedicated Bloggers
Local Expert
Bartender, Make it a Double
Hyper-Local
Tags:
phoenix housing market
housing market predictions
housing market recession

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainmaker
47,726
Khash Saghafi
Liberty Home Mortgage Corporation - Cleveland, OH
Mortgage Loan Officer, Cleveland Ohio

This is a great post Jan!!! I miss my no documentation loans, but I'll take what we have today -- all Full Documentation and that is about that.  Everything cycles and things always seem to repeat themselves, but using history to help project the future is always the most intelligent way to travel in my opinion.  Thank you for the post.

May 13, 2018 06:25 AM #1
Ambassador
2,921,693
Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

In the long haul, appreciation will always be there.  But in the short term, corrections happen.  

May 13, 2018 09:27 AM #2
Rainmaker
876,982
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Thank you for commenting Khash Saghafi !  You bet we all learn from our mistakes, then regulations happen. It was so easy doing no doc, but not the right way to do business.  People will tell the best stories sometimes!  

 

Yes, you're right Chris Ann Cleland !  Real estate is a sound investment and not a quick buck. If people went back to the principle idea of owning their homes when they retire, where would we be?  Interesting thought!

May 13, 2018 09:55 AM #3
Rainmaker
2,964,467
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good evening Jan. This is terrific. You never know what you will find and how significant it may be.

May 13, 2018 12:02 PM #4
Rainmaker
876,982
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Thank you Sheila Anderson .  All too often we skim over prices and reports, but newspapers don't lie  The opinions on this paper are interesting.  Economists pointed to an impending disaster.  Yikes!

May 13, 2018 10:35 PM #5
Rainmaker
2,133,436
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

While I have no newspaper articles from 2004, I have memories of that time.  I distinctly remember standing in a house with clients, and thinking this house is far to expensive for what it is.  Yet, it was similar to now.  There was little housing inventory on the market, there was high demand, and everyone was working.  We could not have predicted what was going on behind the scenes with the shenanigans of banks lending in such reckless ways, which later became toxic when they mixed good loans with bad ones, and packaged them up, to sell on the secondary market.  I do think we are in a better position this time, because lending has not been as reckless.

May 14, 2018 04:27 AM #6
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
876,982

Jan Green

HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN
Ask me about Homes in Scottsdale!
*
*
*
*
Spam prevention

Additional Information