By Catherine Reagor | Arizona Republic
Rising home prices and bidding wars over affordable houses in metro Phoenix are stirring painful memories of the housing boom that led to the area’s biggest real estate crash beginning in 2008.
For those who weren’t here or are still trying to forget the years from 2009 to 2011, a 50% jump in Valley home prices from 2005 to 2006 — fueled by bad loans and speculators — led to record foreclosures and home prices plummeting twice as fast as they had jumped.
Painful memories.
Many Phoenix-area homeowners are now leery of a repeat, though some prospective home buyers are secretly hoping for it so prices fall.
“Supply of all types is low and prices are certainly set to rise at a faster pace. The key difference between 2004 and now is that people are purchasing homes to live in rather than to flip for a quick profit. Builders overbuilt, caught up in the opportunity to capture higher sales and higher profits. Today, labor and materials effectively cap the number of homes that can be built.
~Jim Belfiore, founder and president, Belfiore Real Estate Consulting
