David Fischer

Over-Correction in the Phoenix Housing Market

This summer since spring has been the time to buy, right now for 70 k gets you an 1800 to 2100 sq foot home built during this century, their cash flow positive. There is alot of demand for renters, and though I think the rents will likely drop a little in the possibly 10 to 20 % range to adjust for so many investors piling back in the market.
Prices have been indeed slammed by foreclosures, and now prices will rise off of this artificial bottom, just like a parabolic sell off in the stock market, prices are artificially squashed due to too many bank owned properties. If you look at the cost of building one of these homes right now, they are possibly 80 k undervalued to current building prices. No new homes will be built until prices of these homes climb from here. Smart real estate investors are buying up these homes like crazy, now is the time, buy buy buy. 70 k homes renting for 800 per month, are you kidding me? Even if rents dropped to 550 per month, they would still be worth buying.

Over-Correction in the Phoenix Housing Market

Housing overshot up, and now will overshoot on the downside. Fair value? What and how can anyone especially this guy dertermine is fair value? If it were only that easy then we would all be so rich. The fact is foreclosures to add to dropping prices, the fact he retorts this is plain dumb logic.

Usually after bubbles of that magnitude, the overshoot the other way can be huge. One only has to look at the Naz or any other bubble that has occurred. Real estate in Phoenix, Florida and especially Las Vegas have a ways to go still to the downside.

Too many clowns get stomped on trying to call bottoms. If you cant handle a 10% drop in prices from here or more, then why try to catch a falling knife.