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Jonathan Dalton
REALTOR
ePro, SFR
602-502-9693

If You Believe the Phoenix Real Estate Market’s Going to Drop Another 20 Percent …

If You Believe the Phoenix Real Estate Market’s Going to Drop Another 20 Percent …

Jonathan Dalton, Phoenix Real Estate Agent… then this probably is a really, really bad time to be buying.

This is vaguely related to another corollary which states that just because you want a certain type of property at a certain price, that doesn’t mean it exists here in the Phoenix area.

To review, a buyers’ market means there is more supply than demand. For those who have been following the Maricopa County absorption rate numbers I post, anything over a five- to six-month supply indicates a buyers’ market.

A buyers’ market doesn’t mean every seller is desperate to sell. It doesn’t mean every seller is willing to give their home away just because you made an offer. It does mean that there are several choices should one home not work, but not every home on the market is going to meet your needs.

Personally, I don’t believe there’s another 20 percent to squeeze out of the vast majority of the Phoenix real estate market. We’ve already seen double-digit drops in most areas. I don’t believe 2000 pricing is realistic (some areas already are back to 2003 prices.)

Maybe I’m right. Maybe I’m wrong. But you purchase based on what you believe. If you fully believe there’s another 20 percent drop coming this year, why in the world would you buy a home?

[tags]Phoenix real estate[/tags]

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  • You very well could be right…Currently we even haven’t started to digest the sub-prime mortgage mess and liquidity crisis. And while Real Estate continues to deflate, uncle Ben will have to keep “printing money”. Have you looked at the price of gas, or the exchange rate of the US Dollar? Inflation – yes, it is here!!! And with rising prices of commodities, goods and services we will then see also price increases of real assets. There was a recent article on Forbes.com
    which goes a little bit deeper into this theory. I also believe that we are not going to see another 20 percent squeeze this year, but heck – we both could be wrong.

  • As an outsider of the Phoenix area, I’d like to share my two-part professional opinion.

    1. If you are in the real estate investment business, you should wait until prices have reached “bottom” in Phoenix. What’s the bottom in Phoenix? God only knows! That’s why it’s called “Speculative Investing”.

    HOWEVER…..

    2. If you are looking to own a home and experience the “American Dream” of home ownership, anytime is a good time to realize your dream.

    I know. I know. Rates could get lower. Prices could get lower. Maybe. But, have you looked at the big picture?

    In Northeast Columbia, South Carolina during 2007, UNIT SALES were down by 10% from 2006. BUT…During the same time frame, home prices increased by 4.69%.

    What does that mean? Potential buyers in our area LOSS about $8400.

    In summary, if you are buying a HOME (and not primarily for investment purposes) and you are working with a real estate professional like Jonathan Dalton, then anytime is a great time to buy.

    p.s. – I am willing to bet that prices are higher in Phoenix today than they were in 2002. I’d be willing to bet on an increase in prices by 2014.

    Here’s wishing current and future Phoenix homeowners the best.

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