Author Topic: Arizona Real Estate (Bubble)  (Read 6728 times)

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Offline irvinehomeowner

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Re: Arizona Real Estate (Bubble)
« Reply #30 on: April 25, 2022, 11:22:11 AM »
Or worse... Larry Linger which happens to many people.

Fundamentals are great for attempting to forecast... but housing has too many non-fundamental factors... especially in micro markets... so over the long haul, as the article says:

Quote
Long term, it’s almost always better to invest in stocks—even at the worst time each year—than not to invest at all.

I forgot if it was Happy Days or Joanie Loves Chachi but someone said "One day, you will be bigger than the pain.". :)
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Offline Kenkoko

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Re: Arizona Real Estate (Bubble)
« Reply #31 on: April 25, 2022, 11:48:07 AM »
Agree to disagree. Feel free to read this article and let me know how 'Peter Perfect' in the article fairs compared to 'Ashley Action'. https://www.schwab.com/resource-center/insights/content/does-market-timing-work

This article purposely picked the year 2000 as the starting point to make their point. If they used 1990 as their starting point, the results would have been very different.

Here's why

Year - Average Annual Return

1989 - 1999: 15.9%
2000 - 2011: -0.95%
2011 - 2021: 11.5%

I also fundamentally disagree with your statement that time in market > timing the market.




Offline sleepy5136

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Re: Arizona Real Estate (Bubble)
« Reply #32 on: April 25, 2022, 01:27:04 PM »
Agree to disagree. Feel free to read this article and let me know how 'Peter Perfect' in the article fairs compared to 'Ashley Action'. https://www.schwab.com/resource-center/insights/content/does-market-timing-work

This article purposely picked the year 2000 as the starting point to make their point. If they used 1990 as their starting point, the results would have been very different.

Here's why

Year - Average Annual Return

1989 - 1999: 15.9%
2000 - 2011: -0.95%
2011 - 2021: 11.5%

I also fundamentally disagree with your statement that time in market > timing the market.
The article is based on a 20 period timeline. Also, you do know its impossible to time the market right? I hope you don't feel that it's possible. So based off of that understanding, are you really going to tell me you would not have invested from 2000-2011? Or even worse, you are going to tell me you would have intelligently timed your stock purchases at the bottom of every major correction/dip and intelligently sell at the absolute top to get max ROI? If so, you are a genius and I would be shocked as to why you're lurking here.
« Last Edit: April 25, 2022, 01:33:13 PM by sleepy5136 »

Offline Kenkoko

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Re: Arizona Real Estate (Bubble)
« Reply #33 on: April 25, 2022, 03:42:13 PM »
Agree to disagree. Feel free to read this article and let me know how 'Peter Perfect' in the article fairs compared to 'Ashley Action'. https://www.schwab.com/resource-center/insights/content/does-market-timing-work

This article purposely picked the year 2000 as the starting point to make their point. If they used 1990 as their starting point, the results would have been very different.

Here's why

Year - Average Annual Return

1989 - 1999: 15.9%
2000 - 2011: -0.95%
2011 - 2021: 11.5%

I also fundamentally disagree with your statement that time in market > timing the market.
The article is based on a 20 period timeline. Also, you do know its impossible to time the market right? I hope you don't feel that it's possible. So based off of that understanding, are you really going to tell me you would not have invested from 2000-2011? Or even worse, you are going to tell me you would have intelligently timed your stock purchases at the bottom of every major correction/dip and intelligently sell at the absolute top to get max ROI? If so, you are a genius and I would be shocked as to why you're lurking here.

We just have different investing philosophy.

Everyone has different level of risk tolerance. There's really no right or wrong, so no need to insult any TI lurkers  ;)

It's impossible for me to time the market right every single turn, but I still believe active investors should try to recognize market cycles.

Offline Liar Loan

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Re: Arizona Real Estate (Bubble)
« Reply #34 on: April 29, 2022, 03:34:41 PM »
I'm seeing a lot of red in Arizona (not to mention SoCal).


Offline Ready2Downsize

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Re: Arizona Real Estate (Bubble)
« Reply #35 on: April 30, 2022, 08:34:22 AM »
I'm seeing a lot of red in Arizona (not to mention SoCal).



Good to know! The city I'm going to is in white. What does that mean?

Offline Compressed-Village

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Re: Arizona Real Estate (Bubble)
« Reply #36 on: April 30, 2022, 08:47:57 AM »
That come to mind, pick Nevada for example. Completely white almost. Does that mean NV is now a good place that is not overvalue base on this map? I think this picture is not telling us anything that is substance.

For me if it is overvalue and to continue to have people buy and over bid for it is a telling that there must be abundant of good and services come to those area or sectors.

Offline USCTrojanCPA

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Re: Arizona Real Estate (Bubble)
« Reply #37 on: April 30, 2022, 02:18:06 PM »
Or worse... Larry Linger which happens to many people.

Fundamentals are great for attempting to forecast... but housing has too many non-fundamental factors... especially in micro markets... so over the long haul, as the article says:

Quote
Long term, it’s almost always better to invest in stocks—even at the worst time each year—than not to invest at all.

I forgot if it was Happy Days or Joanie Loves Chachi but someone said "One day, you will be bigger than the pain.". :)

You are damn right that residential real estate has way too many non economic factors.  Heck, take me for example....I'm looking for a single story 3-car wide garage view lot home with a pool south of the 405 or somewhat of a unicorn.  You know how many homes I've made offers on in the 18 months?  3 because nothing else was of interest to me.  I can wait for the market to dip but what happens when there's nothing that I like to buy?  Am I supposed to buy something that I don't really want or settle?  I don't think so.
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Offline DrTravel

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Re: Arizona Real Estate (Bubble)
« Reply #38 on: April 30, 2022, 09:20:27 PM »
You are damn right that residential real estate has way too many non economic factors.  Heck, take me for example....I'm looking for a single story 3-car wide garage view lot home with a pool south of the 405 or somewhat of a unicorn.  You know how many homes I've made offers on in the 18 months?  3 because nothing else was of interest to me.  I can wait for the market to dip but what happens when there's nothing that I like to buy?  Am I supposed to buy something that I don't really want or settle?  I don't think so.

Another great piece of advise from the sage Martin. Right before the craziness exploded my kid/spouse were looking to buy a starter home. They were actually looking for a home to live in and raise a family. We visited a lot of homes and almost all were pieces of shit and/or had structural defects. Many required repairs, hell most people didn't even bother doing a cursory cleaning of their properties. Their attitude was f*ck it, any piece of shit I put out there will receive multiple offers over list.

Whatever happened to "Location, location, location?" Properties that backed up to god knows what were selling like hotcakes. Think everyone who had a house they considered to be their "problem" or had major issues hit the jackpot - they could now unload their problems and make a $$$ killing at the same time. One of the last homes we saw was in the process of remodeling their kitchen... ahh kitchen remodels are noted for cost and time overruns and potential major plumbing/electrical issues. Don't even contemplate buying until after the remodel is complete and signed-off. The listing didn't show any interior shots but had a nifty artist rendering of the proposed kitchen. From a quick drive by, we noted termite and wood rot at the roof - god knows what else a licensed inspector would find if even allowed. The home sold for $200K over asking.

The kids gave up on their home search. WTF were people thinking?? FOMO>>>common sense. I'm so proud the kids didn't settle - sure they missed their chance to buy but how many people who bought homes in the past year will later regret their decisions and realize that just maybe they didn't really win the jackpot when the seller accepted their offer, that they got stuck with a problem house (and years of headaches) and are going to have a bitch of time unloading it during a "normal" market and no chance in hell in a buyer's market. Crazy markets like today's don't last forever - I'm seeing signs, but I can't predict the future - just like NOBODY else in this forum.

PS A great statement popularized by Mark Twain (Thomas MacKay probably started it) - there are three types of lies - Lies, damned lies, and statistics. We may have to update to include a fourth; Liar Loan's real estate analysis.
Do ordinary things extraordinarily well.

Offline CalBears96

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Re: Arizona Real Estate (Bubble)
« Reply #39 on: April 30, 2022, 09:43:14 PM »
Or worse... Larry Linger which happens to many people.

Fundamentals are great for attempting to forecast... but housing has too many non-fundamental factors... especially in micro markets... so over the long haul, as the article says:

Quote
Long term, it’s almost always better to invest in stocks—even at the worst time each year—than not to invest at all.

I forgot if it was Happy Days or Joanie Loves Chachi but someone said "One day, you will be bigger than the pain.". :)

You are damn right that residential real estate has way too many non economic factors.  Heck, take me for example....I'm looking for a single story 3-car wide garage view lot home with a pool south of the 405 or somewhat of a unicorn.  You know how many homes I've made offers on in the 18 months?  3 because nothing else was of interest to me. I can wait for the market to dip but what happens when there's nothing that I like to buy?  Am I supposed to buy something that I don't really want or settle?  I don't think so.

I agree 100%.

When my wife suddenly came up with the idea of buying in OC, we agreed that we would only buy if we saw something that we loved. When we first talked about it, we only wanted to consider something in the $800k-$1M range because we didn't want extra burden, even if the house, or most likely condo, was smaller. One criteria that my wife has. It has to be new. She would buy someone else's old home.

So we searched online. We looked at some floorplans at Serrano Summit. They weren't bad. We made an appointment to tour Soria. These are a little bit above the budge we set ($1.1M-$1.2M). We actually really like Soria 2, 3, and 4. The location wasn't ideal for us, though, since we wanted a nice quiet neighborhood and this is in the middle of a commercial area. But it was good enough that we decided we would buy.

The week after, we toured Bluffs, and that pretty much settled it. She loved PS and also Bluffs floorplan. Funny thing is we liked Bluffs 1 more than Bluffs 2 in the beginning. Perhaps because it was cheaper. We checked out Highland the week after. Although we liked Bluffs's floorplan more than Highland, but I still would have taken Highland because of the driveway.

In the end, we decided that we wanted the loft, so we chose Bluffs 2 over Bluffs 1. Bluffs offered us a buying opportunity before Highland, so we took it. We would have got Highland if we waited a week, but the bigger backyard of Bluffs 2 trumps the driveway of Highland 1, so we decided not to wait for Highland.

TL;DR version. We could wait for the price to dip, but by then PS has probably been built out. The only place left is GP, and we sure as hell are not going to buy there because of the MR and non-ideal location for us.

Offline Liar Loan

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Re: Arizona Real Estate (Bubble)
« Reply #40 on: May 02, 2022, 11:30:24 AM »
I'm seeing a lot of red in Arizona (not to mention SoCal).


Good to know! The city I'm going to is in white. What does that mean?

Great question!  Here is what Mark Zandi, the publisher of the chart says:

House prices are vulnerable to a significant comeuppance. Prices are out-of-bounds compared to household incomes, rents and construction costs – the fundamental determinants of prices. Nationwide, prices are more than 20% overvalued. This isn’t a problem when rates are low but with rates now moving quickly higher and affordability and demand being hammered, prices will come under pressure. It wouldn’t be surprising if house prices in the most overvalued markets in the South and Mountain West suffer price declines of as much as 10% peak-to-trough.

Offline irvinehomeowner

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Re: Arizona Real Estate (Bubble)
« Reply #41 on: May 02, 2022, 11:57:17 AM »
USC, Dr. Travel and CalBears are just saying what many people are saying... they are willing to pay more for what they want... timing or not.

As I have said many times before, when prices are low... selection isn't very good... because people with the good homes hold until prices are higher... and for the good homes available, there is so much competition that they end up being priced higher anyways.

This is stuff that charts and graphs won't tell you.
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Offline USCTrojanCPA

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Re: Arizona Real Estate (Bubble)
« Reply #42 on: May 02, 2022, 02:58:04 PM »
USC, Dr. Travel and CalBears are just saying what many people are saying... they are willing to pay more for what they want... timing or not.

As I have said many times before, when prices are low... selection isn't very good... because people with the good homes hold until prices are higher... and for the good homes available, there is so much competition that they end up being priced higher anyways.

This is stuff that charts and graphs won't tell you.

Yup, the different between macro and micro economic variables.
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Offline Liar Loan

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Re: Arizona Real Estate (Bubble)
« Reply #43 on: May 02, 2022, 06:23:21 PM »
It's fine if somebody like USC, who is informed, decides to buy what they want.  The problem is 80-90% of real estate buyers are low information buyers that simply do what their lenders and realtors advise them. 

It's surprising to me that CalBears and R2D2, with their history of purchasing at the peak of other bubbles, don't see the warning signs this time.  Emotions are a powerful thing.  I would not want to be them in five years, but it's their decision to buy what they want. 

I can only try to warn first time buyers that may not have been around for the last housing crash that home prices don't always go up, and that there is a lot of artificial stimulus driving the current "shortage" of homes.  I don't see anybody else spreading this message.  I know it would have been valuable to me when I made my first purchase in '06.

Offline Ready2Downsize

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Re: Arizona Real Estate (Bubble)
« Reply #44 on: May 02, 2022, 06:34:32 PM »
It's fine if somebody like USC, who is informed, decides to buy what they want.  The problem is 80-90% of real estate buyers are low information buyers that simply do what their lenders and realtors advise them. 

It's surprising to me that CalBears and R2D2, with their history of purchasing at the peak of other bubbles, don't see the warning signs this time.  Emotions are a powerful thing.  I would not want to be them in five years, but it's their decision to buy what they want. 

I can only try to warn first time buyers that may not have been around for the last housing crash that home prices don't always go up, and that there is a lot of artificial stimulus driving the current "shortage" of homes.  I don't see anybody else spreading this message.  I know it would have been valuable to me when I made my first purchase in '06.

Funny Liar Loan.

I ALSO sold at the peak a house that I hated. Not only that, I bought ANOTHER house near the lows and rented the first one out that I COMPLETELY paid off before I was 35.

AND I sold my Irvine home, bought a house in Legacy BEFORE your 2018 downturn you keep yapping about that has completely outperformed the Irvine house AND turned that difference in prices into over $3 million in cash which is enough to buy back the Irvine house.

Arizona taxes are a flat 2.5%. What is that here? I will save a ridiculous amount of money on income tax simply by moving AND I sold my Cali home after I bought the AZ house which means AZ has continued to go UP at the same time my Cali home did.

Jobs going to AZ is what is supporting their increase in prices. Did they have any downturn in 2018? NOPE.

Should houses go down, what will happen there? Investors will snap up everything under $500K and rent them out for at least break even. Of course it helps property taxes are a couple thousand a year. How many can say that in Cali? Certainly NOT YOU.

U live in a state that can't comprehend not wanting more money, a state with ridiculous income tax, gas tax, property taxes for anyone that hasn't owned their property for decades, especially those with mello, high priced utilities (check out how much u pay per kwh for electricity. No wonder people want solar), high everything, except if you're homeless or here illegally. And it is literally never enough. What did other states do with their budget surplus which Cali is required to spend or return? RETURNED it to TAXPAYERS. What is Cali doing? Trying to figure out how to spend it. Don't look now. The state isn't happy people are saving something with solar and EVs. They want to add fees for ya all and charge per mile to drive your cars here, after they required new home builds to include solar and are banning gas burning cars. How's that bullet train coming? I heard it's running out of $$$$. Guess who they will come to for more of that?

BTW............. I traded my way to the cash to pay for my house that is closing on Thursday and that is trades I made from mid December to this week. See why I want lower income tax?

Sometimes u should look at the bigger picture. U live in a state that is going in the wrong direction and whatever u own will underperform what I bought, going forward from here.
« Last Edit: May 02, 2022, 07:10:43 PM by Ready2Downsize »

 

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