2023 Phoenix Area Home Prices (Mesa, Young: balloon payment, townhouse, college)
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the solution is to get three full-time jobs! I did it when I was a young whipper snapper, I got up every day a 2 Am to deliver the morning paper and then went to my full-time job at 7 am as a utility locator ! and then on Saturdays, I worked in a picture framing art gallery, this was after I finished night school in electronics,( true story )
Who needs sleep when you are a young man?
regardless rent is still too high and apparently, according to this forum you can't blame anyone but yourself
It's supply and demand. $1700 for a small apartment in a crummy part of Phx? Well, that's the going rate.
2021 rents were skyrocketing in Chandler and when my renters who moved in 2018 ($1450) left I listed a 2400 sq ft 4bed.2.5 bath home for $2750.
The phone rang off the hook. Plenty of interest except I didn't want any of those who called. Never mind income, this property has a strict HOA regarding overnignt street parking. Four cars, even three cars won't work. I needed a family with two cars earning 100k. Those who fit my criteria are in demand. They call the shots. Not the owner or property management. I had to drop the rent into the 2500 range to get such applicants.
However, I could have gotten $2750 or maybe even 3k if I was willing to take four adults with four cars and questionable income.
But as an owner (a PM company might be different) it's not always about top dollar.
Greed man, Greed. That is the problem. I ve been through a few corrections in the Phoenix Real Estate Market. The last one began in September 2007 and ended by the Spring of 2011. Investors always overspeculate the Phoenix area market. I almost think that the market is used for a pump and dump scheme that keeps repeating itself.
Here we are once again, the prices are through the roof and they will be headed for a decline in the coming years. Many people will lose equity Many will even lose their house to foreclosure. Meanwhile the smart investors already sold out last year. and this year. I watch inventory. There was no inentory last year just like there was no inventory in 2005 but now I'm seeing inventory start to tick up. I wouldn't buy a house in this market. If you do you will lose money on it and you may even lose the house itself. I don't know when people will ever understand. I guess that is just human nature.
Its going to take a while for prices to deflate because the interest rate went up so high but a time will come when even dropping the interest rates will not prevent homes from depreciating in value.
In 2021, the average person in Arizona made $55,159, according to the U.S. Census Bureau, and the average rent was around $1,250. We hear a great deal in the current economic climate about wage inflation, but that same individual is now making $58,620, while the average rent is nearing $1,700. That person is bringing home $288 more every month than they did two years ago while paying $500 more in rent. Now factor in inflation across all other aspects of life—food prices, gas, basic services, etc.—and those wages haven’t inflated nearly enough to offset the cost of living.
Speaking of apartment oversupply coming: on a walk I saw the undeveloped lot in our neighborhood with a re-zoning sign. From SFH to two-story "townhomes" aka apartments. With double original density. It's not too close to my home so no worries here but it's right on trend. Everything gets turned into apartments here.
In 2021, the average person in Arizona made $55,159, according to the U.S. Census Bureau, and the average rent was around $1,250. We hear a great deal in the current economic climate about wage inflation, but that same individual is now making $58,620, while the average rent is nearing $1,700. That person is bringing home $288 more every month than they did two years ago while paying $500 more in rent. Now factor in inflation across all other aspects of life—food prices, gas, basic services, etc.—and those wages haven’t inflated nearly enough to offset the cost of living.
Yet, this varies depending on the location. Mesa, Gilbert, and Chandler for example are different housing markets.
Parts of Mesa are quite nice. However, Gilbert and Chandler are more desirable areas for families to buy or rent.
Greed man, Greed. That is the problem. I ve been through a few corrections in the Phoenix Real Estate Market. The last one began in September 2007 and ended by the Spring of 2011. Investors always overspeculate the Phoenix area market. I almost think that the market is used for a pump and dump scheme that keeps repeating itself.
Here we are once again, the prices are through the roof and they will be headed for a decline in the coming years. Many people will lose equity Many will even lose their house to foreclosure. Meanwhile the smart investors already sold out last year. and this year. I watch inventory. There was no inentory last year just like there was no inventory in 2005 but now I'm seeing inventory start to tick up. I wouldn't buy a house in this market. If you do you will lose money on it and you may even lose the house itself. I don't know when people will ever understand. I guess that is just human nature.
Its going to take a while for prices to deflate because the interest rate went up so high but a time will come when even dropping the interest rates will not prevent homes from depreciating in value.
We agree. I don't know when people who claim doom and gloom will understand. About 40% of the people own their homes outright. And another group equally as large has many hundreds of thousands of $$'s in equity.
At 8+% mortgage rates, inventory is building. We all see it. It's obvious things are finally softening. I feel a "cold" coming on for the entire country. Not just PHX. To assume the market is going to collapse is not realistic. There is the Haves and the Have Nots. Unfortunately, it's widening that that's a problem. And yes, corporations gobbling up homes is a problem. I'm all for a law that stops that from happening.
But EVERYTHING is expensive right now. And yes, the "average" person just might be in trouble because their mortgages and rents are expensive. When you look through the lens of a person in the Have category, it's not nearly as bleak as you claim. Don't shoot the messenger. I don't like the way things are going. But people better get in the Have group because there are not a lot of people trying to change the system. That was my point to @wilberry. Give me a year and I could start a $200K window cleaning business (my guy makes more). I'm not going to go to work for $55K a year and struggle. Maybe learn to train dogs and get paid $75 an hour (that's what I just paid someone). I could go on and on. My handyman makes $95 an hour. I hired a 26-year-old electrician to moonlight for $160 an hour. This isn't rocket science. People need to think outside the box or be left in the dust! That's what I taught my kids. Option 2. Assume you need to work three jobs and wear your body down!? That's NOT smart. Think smarter, not harder. Or continue to blame the system (and the system has some BIG problems). See how far that gets you. I am doing people a favor by not enabling that defeatist attitude. "Average" is a VERY easy bar to overcome when you have the right attitude.
We agree. I don't know when people who claim doom and gloom will understand. About 40% of the people own their homes outright. And another group equally as large has many hundreds of thousands of $$'s in equity.
At 8+% mortgage rates, inventory is building. We all see it. It's obvious things are finally softening. I feel a "cold" coming on for the entire country. Not just PHX. To assume the market is going to collapse is not realistic. There is the Haves and the Have Nots. Unfortunately, it's widening that that's a problem. And yes, corporations gobbling up homes is a problem. I'm all for a law that stops that from happening.
But EVERYTHING is expensive right now. And yes, the "average" person just might be in trouble because their mortgages and rents are expensive. When you look through the lens of a person in the Have category, it's not nearly as bleak as you claim. Don't shoot the messenger. I don't like the way things are going. But people better get in the Have group because there are not a lot of people trying to change the system. That was my point to @wilberry. Give me a year and I could start a $200K window cleaning business (my guy makes more). I'm not going to go to work for $55K a year and struggle. Maybe learn to train dogs and get paid $75 an hour (that's what I just paid someone). I could go on and on. My handyman makes $95 an hour. I hired a 26-year-old electrician to moonlight for $160 an hour. This isn't rocket science. People need to think outside the box or be left in the dust! That's what I taught my kids. Option 2. Assume you need to work three jobs and wear your body down!? That's NOT smart. Think smarter, not harder. Or continue to blame the system (and the system has some BIG problems). See how far that gets you. I am doing people a favor by not enabling that defeatist attitude. "Average" is a VERY easy bar to overcome when you have the right attitude.
I believe you've mentioned in the past that your son is starting out as a doctor as is his girlfriend. They live in the Mission District of SF. If this is the case their combined income is likely in the 500k range and will go up in the coming years. Great. If they want to stay in the Bay Area, that'll work. If they want to move to another equally expensive area of the country...that's fine too.
But what about couples in the 150k range? That won't get you past first base in the more popular areas of Cal. Which brings us to the Phx metro - a popular destination for many in recent years. Maybe not as popular as Austin or some other other cities but popular, nevertheless.
It's become common for me to see rental applications from those who moved here recent years. And often they have a strong income. Strong meaning over 100k esp. in the Chandler and Gilbert area.
Mesa too is no longer inexpensive. Since 2020 I've had renters who moved into a Mesa rental after being priced out of Scottsdale and another who was priced out of Tempe.
So, where can those who get priced out of E. Mesa go? My guess is West Mesa, or they downsize to an apartment.
Or leave the Phx metro like one family who moved here in 2021 from Colorado thinking the cost of living would be a lot cheaper.
They were wrong and after one year in Scottsdale and another in Mesa they decided to return to Colorado.
The hundreds of thousands in equity are not earned equity from paying down the mortgage or improving the house . Most of it is from appreciation. That is easy equity! It was easy to gain and it will be easy to lose. The same for the mortgage free homes. They were bought mostly during a much more affordable time. Now folks who bought at the peak during the last 2.5 years. There are about 200,000 properties or about 10-15% of inventory that will likely end up under water. I have always argued that Arizona needs to raise property taxes significantly in order to stabilize the volitility and stave off investors as well as improve schools etc. Slap people with 15k-20k in annual property taxes for those 700k houses in Gilbert, Chandler, Scottsdale. That would cool prices a little and keep investors at bay.
Quote:
Originally Posted by MN-Born-n-Raised
We agree. I don't know when people who claim doom and gloom will understand. About 40% of the people own their homes outright. And another group equally as large has many hundreds of thousands of $$'s in equity.
At 8+% mortgage rates, inventory is building. We all see it. It's obvious things are finally softening. I feel a "cold" coming on for the entire country. Not just PHX. To assume the market is going to collapse is not realistic. There is the Haves and the Have Nots. Unfortunately, it's widening that that's a problem. And yes, corporations gobbling up homes is a problem. I'm all for a law that stops that from happening.
But EVERYTHING is expensive right now. And yes, the "average" person just might be in trouble because their mortgages and rents are expensive. When you look through the lens of a person in the Have category, it's not nearly as bleak as you claim. Don't shoot the messenger. I don't like the way things are going. But people better get in the Have group because there are not a lot of people trying to change the system. That was my point to @wilberry. Give me a year and I could start a $200K window cleaning business (my guy makes more). I'm not going to go to work for $55K a year and struggle. Maybe learn to train dogs and get paid $75 an hour (that's what I just paid someone). I could go on and on. My handyman makes $95 an hour. I hired a 26-year-old electrician to moonlight for $160 an hour. This isn't rocket science. People need to think outside the box or be left in the dust! That's what I taught my kids. Option 2. Assume you need to work three jobs and wear your body down!? That's NOT smart. Think smarter, not harder. Or continue to blame the system (and the system has some BIG problems). See how far that gets you. I am doing people a favor by not enabling that defeatist attitude. "Average" is a VERY easy bar to overcome when you have the right attitude.
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Expect a correction in home values
Maybe learn to train dogs and get paid $75 an hour (that's what I just paid someone). I could go on and on. My handyman makes $95 an hour. I hired a 26-year-old electrician to moonlight for $160 an hour. This isn't rocket science. People need to think outside the box or be left in the dust! That's what I taught my kids. Option 2. Assume you need to work three jobs and wear your body down!? That's NOT smart. Think smarter, not harder. 
Or continue to blame the system (and the system has some BIG problems). See how far that gets you. I am doing people a favor by not enabling that defeatist attitude. "Average" is a VERY easy bar to overcome when you have the right attitude. 
