Where is the Real Estate Market Trending or Heading?
Ok.. were back. Values are sky rocketing and prices are increase
at a trend rate that is almost straight up!
The (Im going to get technical here with math) slope of the
trend graph for some of the major metro area like Tampa, Los
Angles, San Diego and Phoenix is very large number. This growath
straight up! Get ready, for lotteries, lines and no homes. Of
course you must have been sleeping if you are in the industry
have not seen this yet
To look forward, we must look at where we were in the past. See
the following graph. (For a high resolution PDF version
It appears from the graph of Phoenix House Values
below, that the real estate market in the Phoenix area is
Is it time to buy real estate again? How long will it take to
come back to normal? Should I get out of the market and wait?
These are hard questions to answer but here are
Big Daddy Dennis’s
predictions and recommendations:
Home values will not return to the trend line for another 1-2
years. Latest trend shows Phoenix back to the highs starting July 2015!
The upturn in values are due to LACK OF INVENTORY AND RECORD LOW
Keep your home if possible. Do whatever it takes to keep the
Do a loan modification? Its possible but there are very
few who are successful.
If you ‘bail out’ and let the bank foreclose, you
will not be able to purchase a home for 5-7 years, maybe even
Inflation will come back and the value of the dollar will drop
dramatically. (This could change if the USA will cut
spending and raise taxes, cut medical/social
security, and increase the tax rate by 45%. I don't think
this will happen.)
The amount of debt in the USA will continue to grow. The amount
is very frightening to view it
In 5-7 years, it will cost $10 to buy a loaf of bread. Gasoline
will cost $25/gallon. And the average starter home price will be
Get out of debt; get rid of the credit cards and pay them off.
Purchase only if you have the cash. Do not get into any debt.
(I sound like your mother here, but she was correct.)
Start a side business. It’s too difficult to explain here why,
but the best reason is the potential tax advantage and the
possible income. Your own side business is the LAST area the
government has yet to attack. Make it simple and get
going. An extra $400 per month really helps.
If you are able, purchase quality single family homes in a good
area and turn them into rental units. (Your side business?)
I’ve talked to a lot of people who feel that they can ‘let
their home go and rent for awhile’. Rental rates are
lower than their mortgage rates. Yes, they are! ‘We can
save a lot of money by renting vs. paying the mortgage, and in 2
years we can purchase again and have a good down payment.’
Well, it’s actually going to be 5-7 years before your credit
report looks good to purchase a home again. And can you really
save the money? Most people will spend the money on toys. If
hyper inflation hits, like some economist predict, then you’ll
be priced out of the market. Do you want to take the chance?
Keep your home, do a HARP 2 loan modification, and hang on – the next
5-7 years are going to be enjoyable.
With low inventory and too many buyers, the Phoenix Real Estate
Market is on the verge of a new boom in real estate
With low inventory and too many buyers the Phoenix Real
Estate Market is on the verge of a new boom in real
'This boom is going to be different,' according to
Dennis Dahlberg, Level 4 Funding
Hard Money Lender
'The last boom was fueled on greed
of the consumer; this time it's going to be a supply
problem. Over the past 6 years there was little
construction or movement of dirt, leaving the Phoenix
housing market starving for new homes. Additionally,
home values are raising dramatically, and once the
current home owners get above water (have equity) they
are going to want to move up. We're going to have a trifecta
or the perfect storm-no homes, pent-up demand, and
record low interest rates. And if you throw a little
inflation on top of the mix -- watch out! Bam! its going
to be a wild ride -- a wild west ride!'
About the graph.
Data is provided by S&P, unfortunately the compilation
takes a few weeks to complete - so the graph is always two
months behind today. Data comes out the 4 Tuesday every
month and is two months behind.