It’s enough to make your blood boil, especially if you live in Arizona. While families struggle in apartments because of housing prices that doubled in 16 months, nearly 40 percent of Phoenix- and Tucson-area homes are vacant investments, reports the Los Angeles Times.
As I’ve long said, most of that investment money has come from Southern California, where it is becoming too expensive to flip houses for profit. Consider that the median-priced house is $617,000 in Orange County and $255,000 in Phoenix.
There are already signs that the Phoenix market is about to crash. Investors, nervous that they can’t find renters for oversized mortgages, may be pushing prices back down as they unload properties.
Evidence of the problem Phoenix is about to face can be seen in inventory: 38,000 houses are now for sale compared with up to 30,000 houses in Southern California. The primary difference is that Southern California has more than three times the population.
Other markets around the nation – Las Vegas, coastal Florida and even Central California – are facing similar problems.
While this is bad news for investors and homeowners wishing to escape over-inflated markets, Southern Californians hoping to escape gridlock may be facing a win-win situation. Savvy Los Angeles homeowners might be able to wait until after the Arizona market implodes before selling their overpriced shacks and moving east.
Then again, the implosion of several markets at once could depress housing prices nationally. Or maybe an implosion will never occur, reports The Arizona Business Journal via MSNBC.