>Phoenix?; IMO No, as of April 2008. Ask me again in 4-6 months and I will surely give you a different opinion.

I’ll tell you why that cracked me up. I’ve been contacted by no less than three solid Phoenix home agents — all of whom I know well, and respect. They’re all asking me when I’m gonna jump in — and here it comes — “‘cuz they’re breaking even or better with 20% down now!”

Sorry, not impressed. I’m totally with you on this one. I’m keeping a close eye on the area, but that’s it ’till later.

I just don’t see the stair step scenario.

Of course, if you told me five years ago I’d be telling San Diego investors to Get Outa Dodge, I would have laughed out loud. Go figure.

The investor has to believe before investing. It’s those who manage to comprehend the data first, who usually find themselves at the top of the mountain.

Enjoy your weekend, Robert.

I seriously don’t want to beat to death or wear out my welcome or even so much as jostle you elbow but Phoenix to me looks dicy. Do you see me saying Austin/Dallas/Fort Worth is a stupid investment? I ain’t that dumb. Do you see me objecting to gettin’ outa Dodge? I ain’t that stupid. We are so much in agreement that maybe the little stuff looks bigger than it is. Phoenix?; IMO No, as of April 2008. Ask me again in 4-6 months and I will surely give you a different opinion. In 4-6 months Phoenix will be either the “V” you see or the stair step I worry about.

I guess my point is that given choices there’s nothing in the current environment that recommends Phoenix.

As always, you make a living doing this. I only make an investment.

Highest regards.

As usual Robert, sell that one to someone who’s buying.

I’m not in the ’supply that isn’t counted’ camp, ‘cuz it’s nearly impossible not to have them counted in our stat-crazed world. I do know what you mean though.

The homes selling for $150-300,000 will begin entering the ’sold zone’ on the MLS. As time passes, it’s my belief velocity will pick up. The whole FHA thing just might end up being a huge wild card in a very positive way. It’s already having impact in San Diego, at least according to some of my house agent buddies.

Phoenix is most likely better than San Diego. Like I’ve said many times, we sometimes might only be discussing the frosting and not the cake. San Antonio, DFW, Austin are are by the same measures likely even better still.

IMHO Phoenix has a few short term negatives and many long term positives. Almost the reverse of “Dodge” and “Dodge North” (aka my similar Ventura County). Short term there are still a quarter million units in Phoenix that sold anywhere between 4 and 7 years ago at purchase prices 1/3rd to 1/2 what you would pay today. If you think about it that’s one of the factors that make TX and GA attractive, there is demand and an investment commitment can directly address the supply/demand curve. Phoenix demand could be met by hundreds of thousands who have supply that isn’t counted.

Do just a cursory search of the offerings. $900-$1000 SFR house rentals. Then $150k-$175k for sale. Sure the price of potential investment property is attractive by SoCal standards but the supply concerns me.

Probably just an uneducated internet opinion but still…

Your points are well made. Especially the uneven battle with those coming in now at far lower prices. Still, population there has increased through consistent and impressive in-migration. They’re there for one reason — the jobs are there, and they’re good jobs to boot. In fact there are more jobs by far than people to fill them in many cases.

That is the pent up demand San Diego just doesn’t have. Also, not all the new population (since 8/05 are gonna be home buyers. They will tend to ameliorate the whole supply/demand on the rental unit side.

I’m with you when it comes to competing against the amateurs. They make things more difficult at times than need be. My faith is ultimately in the market itself. Otherwise I’d go screaming into the night sometimes.

For the record I am not a bear, only currently bearish. Huge difference.

That said, the following is not “disagree” just adding more to the discussion. One of the problems with the “adding population” projections is how extraordinarily sensitive they are to extremely minor behavioral shifts. Nationally, if one household our of 10 picked up an extra occupant there would generate an additional 4 million dwelling unit surplus. In the case of Phoenix more total people was a strong driver of housing demand. Now that so many are under “house arrest” as I call it they are aging in place and family size is growing. Don’t even get me started on divorces delayed because of the housing consequences. Another 180 degree reversal.

San Diego County, California Occupied housing units 1,039,619
HOUSEHOLD SIZE
1-person household 25.6%
2-person household 31.9%
3-person household 16.0%
4-or-more-person household 26.4%

Maricopa County, Arizona Occupied housing units 1,322,104
HOUSEHOLD SIZE
1-person household 26.6%
2-person household 33.0%
3-person household 15.0%
4-or-more-person household 25.4%

I know that seems small and tough to interpret but it tells me that it is likely that Phoenix won’t resume their past youthful housing formative segment in-migration patterns.

Still let me repeat my big concern it a different way. The recent 30 month period doubling of home prices leaves a near inexaustible source of lower rent pressure potential amateur landlords. I don’t mind a cutthroat professional fight but I see no benefit for getting in the ring with people who don’t know what they are doing who also enjoy half the cost basis I would carry.

Phoenix will absolutely have to rid itself of all the excess inventory. We disagree on how long, as it’s my view the sales rate is never a static factor. It’s hostage to market perception of course, which will dramatically change once the tipping point is reached directionally on the chart.

Know what I mean, Verne?

If it does take Phoenix that long, we may be witness to the most amazing V recovery in decades in that region. The population hasn’t stopped increasing during this correction. Nor has the job creation, which has actually made Maricopa County the #1 job creation county in the country.

If that isn’t a recipe for impressive pent up demand, I don’t know what is. As usual, we’ll just have to wait and watch it play itself out.

Thanks again, Robert.

DALLAS–(BUSINESS WIRE)–HomeVestors® of America, Inc., the company famous for its “We Buy Ugly Houses”® billboards and America’s #1 Home Buyer, has named the top 10 markets for real estate investing in the first quarter of 2008. They are as follows:

1. Dallas, Texas
2. Houston, Texas
3. Atlanta, Georgia
4. Fort Worth, Texas
5. St. Louis, Missouri
6. Philadelphia, Pennsylvania
7. San Antonio, Texas
8. Denver, Colorado
9. Minneapolis, Minnesota
10. Phoenix, Arizona
—-
Some might look familiar to regular readers.

Anyway here’s my hyper abbreviated concern about Phoenix:
http://bp3.blogger.com/_zqzPMzXNGso/R_YZm9GU5lI/AAAAAAAABkA/HmmhSpTy6V8/s1600-h/Picture+1.png

The red line is Phoenix “lower tier” pricing. The black line is the composite for #3 Atlanta for reference. My concern is about pricing authority. There is a huge supply of product purchased at 2004 and before prices in Phoenix that can potentially massively undercut any investment made today. The vacancy factor and revenue increase divisor have got to be huge in any reasonable analysis scenario. Talk to me about Phoenix when inventory drops below 30,000 which at the current sales rate and supply line should be 2+ years.

P.S. I have no idea why Philly is on this list.