The Phoenix Housing Market went through a real estate boom in 2004 and 2005 and a subsequent crash from about 2007 to 2011. Everyone knows both the happy and horrific details. That’s not what I’m here to talk about today.
Have you ever wondered what our property landscape would look like if the boom and crash had never happened? Well, I have. The information I present below is obviously fictional but is grounded in some basic facts and a somewhat logical projection. Granted, there is no way for anyone to say what would have happened. So this post is just for fun. This is a hypothetical look at the Phoenix Housing Market if the boom and crash never happened.
We begin our story in January 2001 when the average price per square foot was $98. The chart is real and shows the actual price per square foot over the last 13 years. The Phoenix Housing Market averaged an approximate 3% annual appreciation from the time period of 2001 through the end of 2003. There was a fairly steady increase without any surprises.
More of the article is below the video.
Phoenix Housing Market Speculation
This is where I’ll begin my speculation. The black arrow line imposed over the chart indicates a steady and gradual, annual appreciation of 3% through the end of 2013. It’s based on the $98 per square foot in the Phoenix Housing Market back in January of 2001. $144 per square foot could have been the projected average selling price of homes in the Phoenix Housing Market at the end of 2013 if everything had stayed normal.
What this means to homeowners in the Phoenix Housing Market depends on when you bought or sold your home. Here are the most basic, obvious, and hypothetical conclusions:
- Anyone who bought above the line paid more than they would have if the boom and crash never happened
- Anyone who sold above the line made more money than they would have if the boom and crash never happened
- Anyone who bought below the line paid less than they would have if the boom and crash never happened
- Anyone who sold below the line made less money than they would have if the boom and crash never happened
Notice conclusion number 3. Although you may wish you bought at the bottom of the Phoenix Housing Market in 2011, today is still a great time to buy when you consider how things might be if the boom and crash never happened. If you’re looking to buy a home you still have an opportunity for a lower priced home in today’s Phoenix Housing Market.
Here are a few more hypothetical and perhaps less obvious conclusions:
- If you bought in the area included in the purple triangle you would have bought higher than the normal appreciation trajectory but would be at or below the $144 that could have been normal appreciation. In other words you would not be underwater with your current mortgage in the Phoenix Housing Market.
- If you bought a house much above the purple triangle you may want to consider if it makes sense to keep it. A short sale may be an option based on the current and actual price per square foot of ~$120 in January 2014. Give us a call. We can help with a short sale consultation (you expected a little self-promotion, didn’t you?)