This seems to be the topic du jour across the real estate blogs so here we go:
1) The Phoenix real estate market will see values rise in 2008, unless they continue to fall or stabilize and flatten.
2) Foreclosures will not cause inventory levels to continue rising, unless the number of homes on the market increases.
3) ASU will beat UofA in football for the eighth time in 10 years.
If you’re looking for anything more concrete, I’m afraid you’ll have to find someone with a better crystal ball. And I wouldn’t put a whole lot of stock in what they’re saying anyway.
Could foreclosures cause a severe rise in inventory above and beyond what we’re already seeing? Possibly. But many of the homes being foreclosed already are on the market as so-called short sales. If anything, the change from a short sale to lender-owned means a home may actually have a chance to sell rather than remaining in listing purgatory.
As for price trends, predictions on a Phoenix-wide level are nearly as useless as predictions on a national level. The Phoenix real estate market isn’t one market but almost two dozen real estate markets, each with their own characteristics and price movement. The overall trend in 2007 was down but not by the same degree across the board.
One of the best blog posts I’ve seen recently answered the question of when the market will rebound. The response? When demand exceeds supply.
It’s just that easy.
There is pent-up buyer demand. My growing list of prospective buyers and the fence they’re sitting on is evidence of that. Your average bubble blogger doesn’t see that because they believe anyone who buys a home is irrational. They don’t understand that some folks just don’t want to rent.
Market mechanics can become self-fulfilling. Buyers sit on the sideline in fear of declining values. Sellers lower their price to try and attract a buyer. Buyers keep waiting for values to drop lower. At some point, the desire to buy will outweigh the fear and buyers will re-enter the market.
This is one of the reasons we say the bottom of the market can’t be timed. For the vast majority of buyers, they won’t know we have reached a bottom until we’re back off of it.
I don’t know when that bottom is. And I’m not about to try and take a wild stab at it just because the calendar says 2007 is just about to end.[tags]Phoenix real estate[/tags]