A five year look at the distressed market in Prescott, Arizona.
Imagine still using your old “bag-car phone”. You remember, that big soft-case with a huge phone in it that still had a spiral cable attached to it? Or even the cell phone that flipped open with an LCD screen that looked like a calculator display… you know, the ones with the large buttons you actually had to press? It took a little research, but in the photos below you can see how far we’ve progressed. The Motorola phone in the center is from 1993. The phone on the right is the future. The Samsung Galaxy S6. And of course the phone on the left is from the 80’s… We used to see this on Miami Vice!
Like these examples, it’s often difficult to explain to people the reason to change their minds when it comes to understanding the foreclosure market. Some people just want to believe that it’s still 2003.
History, and a brief explanation:
Investor Heaven, Homeowner Heck
To explain the climate in Prescott, Arizona, we must look at national data to where Arizona was in regards to distressed properties compared to the rest of the nation. Understanding this helps us better to see why investors were clamoring to scrape up all the foreclosures they could get their hands on the last 5 years. Prescott was literally the 5th hardest hit economy (in regards to negative equity) in the entire United States! Because Matt was parsing data from companies like CoreLogic, during this period he had his hands on the best data available to anyone. He was also working with investors to buy up broken subdivisions across the United States which had been abandoned. The data helped in locating the hardest hit areas, and with a little scraping, helped find the asset managers. As anyone can see, the southwest and Florida were hit the hardest.
This was a horrible time for many families across the United States. We saw housing prices rise to ridiculous levels, and with no buyers and no way to pay the ARMs, the market simply crashed. People had very little to no investment in their mortgages…as a result, many walked away. Consequently, many innocent people were also taken down in the process. Those who owned their homes for 30 years, and were finally able to see some advantage to home ownership, saw their equity stripped away along with their retirement securities.Of course as the saying goes, “One man’s trash is another man’s treasure.” Investors couldn’t move fast enough to snap up available properties on the market each day. At one point, Prescott was 55% upside down.
Is the foreclosure market still HOT?
In 2005, while working with several dozen REALTORS and developers, we predicted that the nail would not be driven in the proverbial coffin of foreclosures until 2015. The real estate bubble was realized when we personally witnessed property in Antelope Meadows purchased at $50,000 being sold at $300,000 within one year. “Prescott simply does not have the infrastructure to withstand this bubble. Homeowners can’t afford to live in their own hometown any longer.“If you’re thinking that the foreclosure market is still HOT in Prescott…think again. This market is drying up, Prescott homeowners! Rejoice and be glad, the comps on your street include almost no foreclosures, and those numbers will continue to drop even further. The housing market has finally adjusted in Prescott.
What about the investors and “flippers”?
There will always be foreclosures and short-sales. Unfortunately, it’s not a secret any longer. The foreclosure crises brought the “best kept secret for investing in real estate” into the forefront of all media outlets. Investors simply have to be linked to an agent that understands the marketplace and can implement the technology to put the investor on the front-lines. Contact our team today, and let us put you on auto pilot! You’ll receive all the latest property information! If you’re an investor looking to flip houses, you definitely want to be on his short list of immediate contacts to receive hot deals BEFORE they hit the market!
Comments or questions are welcome.
© Matt White - REALTOR® |
Speak Your Mind
You must be logged in to post a comment.