Meltdown in Phoenix Housing Market
Feb
23
2007
A coworker that reserved a preconstruction home in the Phoenix area (even after my recommendation not to) told me that his real estate agent called and told him the home he signed a purchase contract at $350k is now being sold for around $280k. I’ve been telling him not to close, which was due for May and now he may actually listen. It is a good thing he only will lose 3k in earnest money.
That is some serious drop! Imagine being a homeowner who closed on the $350k price and now sees the $280k price for a new home!
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March 2nd, 2007 at 4:21 pm
instead of walking, he could ask the builder to drop the price to $280k. if the builder refuses, then ask him to refund his earnest money.
this of course considering that he still wants to buy given that the market might drop another 20-30k.
March 8th, 2007 at 10:05 pm
that is a good idea but he would still be faced with a negative cashflow each month. Sometimes that may be ok if you think the market is headed upwards, but as far as the Phoenix area, that will be tough. I think Phoenix and the surrounding area will be pretty flat for the next 3 years at the minimum.