Reply #71: Phx home prices went up approx 25% the past year, a lot of it [View All]

[madmark]

is Ca equity cashing out and coming hear, along with equity investors across the country, and around the world, buying phx residential real estate instead of market securities as investments. Prices are disconnecting from the local incomes of the end users. And a disproportionate share of the income of the end users is now going to housing in costs instead of other things. Short term equity windfalls for sellers who do not roll all their proceeds in a new home are being quickly dissipated in six months to a year of easy living and spending. What's unique now is that for the time being local conditions are not controlling the housing prices. The out of state investors are controlling them. And I think at some point these investors will be unwilling or unable to finance the growing gap between what the end users can pay for housing and cost of carrying the financing on the real property investment and we will see an unusually sharp correction. That said I do not see the pull back going below levels we had ten years ago and permanent higher housing costs are here to stay.