I’m the leading bear in an article in Saturday’s Toronto Globe and Mail. I wasn’t as dour as the overall slant of the article, but it remains that the Phoenix real estate market is overbuilt. We have more kitchens than cooks, and, as long as that is so, a robust and enduring recovery is not possible.
One thing I didn’t say, but I wish were true: “Mr. Swann said he has clients from Canada, California, Oregon and elsewhere snapping up dozens of houses at a time.” I have dozens of investor clients, most of whom are buying nothing right now, since it’s stupid to compete for the privilege of over-paying for a rental home. I have one client who plans to buy dozens of homes, but who has not started yet.
The interesting thing is, it really is a great time to buy a house in Phoenix — except at the very low end. Sellers with equity are finally waking up and smelling the coffee, so the move-up market — at least below $500,000 or so, jumboland — is really starting to move. First-time home-buyers, enriched by the $8,000 tax credit, are butting heads with out-of-state investors for all the homes priced $100,000 and under. But for people with buying power, things are looking very rosy right now.
Even so, the Globe and Mail article is good reading. The authors explore a lot of systemic factors that could make our current mini-boom a fondly-remembered oasis in a desert of on-going bad news.
Benjamin Ficker says:
I read that article. Since I read BloodhoundBlog I knew what you would say already, but it is always nice to hear what others are NOT saying.
June 22, 2009 — 10:26 am
Greg Swann says:
Craig Anderson has the goods in tomorrow’s Republic.
June 22, 2009 — 10:22 pm
Scott Grace says:
I love the Globe and Mail. I am from Nova Scotia and it is at every magazine rack!
June 23, 2009 — 10:22 am