Arizona Real Estate :: Reality Check

I've been reading blogs and articles from other realtors suggesting that the market has so called "bottomed" and the surge in recent sales. The word "bottomed" is a nice word that so called real estate and Wall Street gurus came up with to help lure people back into the markets. I find that very funny seeing that foreclosures in the first 2 weeks of April there have been more foreclosures filed than in the whole month of March; which was a record month. People tend to blame the media for everything. It's funny because I didn't hear anyone complaining when the media told all the good news about real estate during the boom.

 The articles about the many Americans buying multiple homes and making a hundred grand before they made there first mortgage payment from the increase from lot reservation to completion didn't seem to bother anyone. Either did the stated income liar loans, neg-am, ARMS etc, that fed the frenzy. No one seemed to care back then. Now everyone wants to blame someone else for the current crisis. The media is no where near up to date on the current housing and financial crisis in the U.S. Wait until the reality catches up to the consumer, banks and public. I see areas and subdivisions where homes are listed for less than 50% of their peak value in late 2006. There will continue to be a downward trend for many years to come. Overall, the amount of buyers needed to stabilize this market is in the tens of thousands and that's if the inventory stood still;-which it won't come close to. The inventory numbers do not account for the thousands of new homes builders are stuck with and are turning to auctions to sell.

 Real estate comes down to fundamentals of supply and demand. You want to make sure you are buying a unique product in a desirable area that is highly land-locked and you are most likely to do well during the good and bad times. You want what your neighbor next door and down the street doesn't have. When you have the same floorplan, style of home, etc. you not only have to worry about your financial situation but theirs as well. If they are in foreclosure it will affect you and the value of your home.

You want to purchase in an area/community where the majority of it's homeowners put large down payments upon their purchase. When you have your own money (not the banks) vested into your property you are more far less likely to "run for the hills" and give into a foreclosure when you have a down market. This lack of foreclosures will help stabalize your community in rough times. These communities are most often found where you have a large ownership of vacation properties/second homes owners. Most people buying vacation properties have disposable income and have paid cash or put large down payments. There are opportunities in this current market but you have to be aware of your particular community of interest and its surrounding area.

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