March 28, 2009

In 2007, realtor on commission Greg Swann had 21 reasons to buy Phoenix real estate. Right before it crashed predictably and horrifically.

Here you go.

Like the Suzanne commercial, this one just gets better with age. And to think, Swanndive has never apologized to you brownshirts and flying monkeys, and has evidently never bawled balefully in private about how terribly, tragically wrong he was.

And remember folks, when you find yourself listening to the expert advice of an uneducated realtor on commission who doesn't understand Econ 101, you may as well take your wallet and burn it. I wonder if you can sue your realtor for false and misleading statements, or fraud? They should at least give the commissions back. If they had the money to do that.

In any case, here do I compile my list of 21 really good reasons to bank on the future of the Phoenix area real estate market:

1. The migration from the Snow Belt states to Metropolitan Phoenix has been unabated for 60 years.
2. A similar extended migration is now occurring from the Northwestern states and Western Canada.
3. The “installed base” of all those migrants brings a steady stream of extended family members.
4. Proposition 13 makes moving up difficult in California; many Golden State sellers buy in the Phoenix area.
5. Californians in pursuit of other objectives — e.g., a friendlier business climate — migrate to the Valley of the Sun.
6. Baby Boomers will retire in droves to warmer climes — the Atlantic coast, the Gulf states and the Southwest.
7. Among those locales, Phoenix is by far the least prone to natural disasters.
8. Because of this, people from disaster-afflicted regions have formed a new stream of in-migration.
9. There is a steady migration of new residents from Spanish- and Portuguese-speaking countries south of the border.
10. Phoenix is a destination of choice or the second-landing city for immigrants from all over the world.
11. While higher oil prices will put a strain on our far-flung suburbs, the greatest pain will be felt in Northern states where fuel oil or natural gas are used as heat sources; even people who don’t hate the winter will move to the Phoenix area to escape high heating bills.
12. The Phoenix Metropolitan area is a dynamic jobs creation machine, adding tens of thousand of new jobs every year.
13. People who have or hope to have children move here as soon as they can manage it.
14. Compared to the areas from which many of our in-migrants are drawn, our homes are still very affordable.
15. We build thousands more new homes every year.
16. The Greater Phoenix area has 60 years of sustained practice at managing extreme growth — this in contrast to thrashing cities like Las Vegas.
17. Snowbirds, politely known as Our Winter Visitors, eventually move here year-around.
18. Our first waves of massive migration occurred after WW II; mustered out soldiers who had been stationed here came back with their families; this pattern continues among people who are posted here temporarily for various reasons.
19. People who stay at our resorts often fall in love with the Valley of the Sun and return as soon as they are able.
20. A significant number of active and retired professional athletes maintain homes here, in no small part because the Phoenix/Scottsdale area has…
21. Year-around golf.


Anonymous said...

What about fresh Water?

Anonymous said...

What about 4 seasons?
and the natural rebirth that comes with it.

Anonymous said...

Anyplace other then rotten Europe is OK.

keith said...

Here's something funny.

The Swanndives bought a home at 909 W. Culver Street at the peak for $455k. It was sold for $321,100 in Fall of 2008 (short sale?), even though he had it listed for $450,000.

It has a current zillow of $295k, so even that buyer is f*cked.,1year_chartDuration/

Can you imagine how bad they got f*cked, and how bad they wanted to f*ck a prospective buyer with their $450k number?

Realtors on Commission - sociopaths, and a danger to society.

How does Swanndive stay in the business? Do people not know?

BIG hat-tip to a very thorough S&A'er for the Swanndive update. Man, I wish I was back in Phoenix sometimes. More scandals in that one town than an American city has ever seen.

Mitesh Damania said...

Currently, homes in the Inland Empire, (for example Lake Elsinore) are under $150,000 to $200,000 and big 2700sq+ ft homes at that! That's like under construction cost!

You guys think it's wise to buy investment properties at this point? I do think rents will go down 20-30% from this point.

Btw, check out the blog I started

vanilla ice said...

I wonder what kind of job I was supposed to get once I bought a house there?

keith said...

Here's Swanndive, feeling cocky in December 2006. Wonder how that $3 million a year projection worked out for him. Hell, wonder how $3 worked out for him.

Oh, the million stories and shattered dreams from the big (ponzi) city.

Anyone feel sorry for the little guy?


For now, our earning goal is $1,000 a day, each, call it $700,000 a year, gross. Obviously our expenses are huge, as are our taxes (grr!). Worse yet, we’re not hitting that goal yet. And to put things in perspective, Russell Shaw’s annual broadcast advertising spend approaches our total earning goal.

In the near term, I think we can double our numbers to something like $1.5 million a year, before taxes and expenses. From there, with a couple of assistants each, we might be able to push things to that amount, gross, each. In other words, without growing our head-count very much, we might be able to knock down $3 million a year in gross commission income. The net from that might not be all that great, considering, but it will still be a lot of money.

Anonymous said...

Prosecution rests its case

Anonymous said...

22. The state loves fraud

Craig Duckk said...

Personally I think the guy's a genius!

Anonymous said...

Now's the time to move to Valley

Greg Swann - Mar. 28, 2009 07:00 AM
Special for The Republic

This is a note to the folks back home, in my case, the rust belt of Illinois.

If, like many adults in metropolitan Phoenix, you come from someplace else, you might print this out and mail it to the people who stayed behind.

The topic: It might be time to pack up and move to Arizona.

Ben said...

Why would anyone with kids more to AZ? They're in the bottom 5 states in education and regardless your position on ESL, classes are going to be dominated by Spanish speaking students...

keith said...

Here's Swann mocking HousingDoom:

This morning’s Arizona Republic has a little featurette on a housing bubble weblog in Gilbert. It’s called the Housing Doom Housing Bubble Blog, but I think would it be more sonorous if it were to be named the “Housing Doom Housing Bubble Housing Blog” or even the “Housing Doom Housing Bubble Housing Blog Housing.” After all, soon enough there will be no housing, according to the BubbleHeads. That notwithstanding, the Housing Doom Housing Bubble Blog insists that, “The housing bubble is getting ready to burst.” That sounds like an ascription of purpose to me, and I’m left wondering why the housing bubble doesn’t take itself down to the Doc-in-the-Box to have itself lanced. I mean, who wants bubble pus all over the carpet?

For what it’s worth, the Housing Doom Housing Bubble Blog is not as amazingly daft as some other BubbleBlogs. But so close to home… And in Gilbert no less, perennially the fastest growing small city in America… Think about it: How do you go about seeing faces in clouds in a place where there are no clouds?

keith said...

Good point about AZ and education.

Not only do kids get a crap education, they also learn bad habits like debt, credit cards, strip mall shopping, cocaine use and never studying a day in their lives.

AZ is an incredibly beautiful state. But it was ruined by the REIC, especially Skip Rimza.

Unless they can get rid of the realtors, mortgage brokers, real estate scammers and developers, they'll be screwed forever.

vanilla ice said...

Stop renting and start living!

soft landing said...

22. Pro Athletes.
23. Prone to one natural disaster - Summer.

Paul E. Math said...

Wow. Okay!

It's been so long since I read those 21 reasons that I had forgotten how bad they were.

It's not just that the reasons are wrong, like building thousands of houses a year is a reason the market won't collapse.

The problem with the list is that it's utterly nonsensical. It's like he wrote the list while very tired or drunk. How many of the 21 reasons are just a variation on 'people want to move here to avoid snow'.

I do feel some sympathy for the guy though. You have to feel sorry for someone who is such a clueless power-tool.

Ross said...

Keith, did you read the article that Anon posted from today's AZ Repugnant? Absolutely freaking priceless.

I posted a link below because it's a little hard to find, thankfully:

Ross said...

Could you also explain the Rimsza thing in a little more depth?

I knew the guy seemed slimy, but what was he able to pull off as Mayor aka Realtor in Chief.

Wind Farmer said...

Here's a good one:

State police started placing the cameras on highways around Phoenix in November. In December, a trooper arrested a man in Glendale while he was attacking a camera with a pick ax. In another incident, a troupe of men dressed as Santa Claus toured around the city of Tempe in December and placed gaily wrapped boxes over several traffic cameras, blocking their views. Their exploits have been viewed more than 222,000 times on YouTube.

Anonymous said...

22. The kidnapping rate is less than Mexico City.

Anonymous said...

saw that doggie 450,000 at 87,000 in 2002 and it looked better and less enslaving..............

Anonymous said...

Irrelevant chart, means nothing. Plenty of other news coming out of Phoenix to make the case for continued decline in housing prices, and reasons not to live in the city of ashes, drugs, and illegals.


Anonymous said...

Keith, while you're snoring away with visions of chicken wings dancing in your head, there are 300 million of us over here trying to get a word in edgewise. But we have to wait 'til TOMORROW to continue the conversation... pfffft!

Anyway, my point was...

Shit. I forgot. I had one, though.

Hey, I searched the archives, and you've made no mention of celery/bleu cheese... what's the deal?

Ahh, now I remember what I was going to say.

I can tell, sense, notice, etc...

just from reading HERE (S&A), that the masses (INcluding S&A'ers) are ALREADY lightening-up, numbing-down, losing-their-edge, blah blah...

The MASSES (ok, "Sheeple," I guess) are ALREADY adjusting to The New Deal, or, The New World Order (sorry, but the words fit)

The rage, the anger... it's ALREADY toned down by 40 decibels.

HERE, I mean. On S&A.


This wonderful blog-o'-yours is a perfect CASE STUDY all on its own.

Humans are resilient, that's part of it.

Humans are ______ ....
what's the other part(s)?

No, we won't willingly be led to the gas chamber, ever again.

But... but...

Isn't that what's happening?

There are ways to be a willing and able partner in a new global economy, etc... without losing our identity/history/pride/values/principles/vision...

productivity, even!

What say you, Mr. President?

Never mind.

We're fucked.

All you stupid motherfuckers.

It could've been SOOO easy.

So many problems solved.

So much pain eliminated, forever.

Even fun, too.

All at once.

Nick said...

I love it! Probably the funniest posts on this blog are the ones going back a few years and quoting the ass-hats like Swann. That guy, like so many of his kind was so arrogant, so condescending, and so completely full of (incorrect) gas. What a total douche!

Nick said...

Let's pick on Kendra Todd next - probably the second dumbest mental midget to grab the mic and announce her dumbness to the world! (2nd to Swannie, naturally)

Anonymous said...

Phoenix: Kidnapping Capital of the USA

“We’re in the eye of the storm,” Phoenix Police Chief Andy Anderson told ABC News of the violent crimes and ruthless tactics spurred by Mexico’s drug cartels that have expanded business across the border. “If it doesn’t stop here, if we’re not able to fix it here and get it turned around, it will go across the nation,” he said.

Anonymous said...

Everything on Swann's list may be true, but it only adds up to a 1 or 2% annual increase, not 20%. That's where he made his mistake.

Also, I was surprised by how deceptive the picture on his blog is. He's not a fit sun-worshipper, he's a fat little guy who can't even talk for thirty seconds without wheezing.

Nimesh said...

Currently, homes in the Inland Empire, (for example Lake Elsinore) are under $150,000 to $200,000 and big 2700sq+ ft homes at that! That's like under construction cost!

You guys think it's wise to buy investment properties at this point? I do think rents will go down 20-30% from this point.

Btw, check out the blog I started

March 28, 2009 9:13 PM

No, don't jump in and buy just because prices have come down so much in a short time span. Remember, this deflationary depression is just starting out. Rents will come down big time, thus you must factor that in. Also, just be patient and remember that with real estate prices, you won't see a 150K home shoot up to 250K in four months, the prices when they turn around will be small and gradual.

Anonymous said...

Those 123°F summers must be nice !

Deserted Desert said...

Gee, all his reasons sounded sooo good on paper. But you know, lies, damn lies, and statistics. You just can't always go with the numbers and the rationales. Some things just happen the way they do. And the Phoenix crash just happened without all those good reasons for it not happening. Will the Phoenix rise from these new ashes?

Anonymous said...

That's a pretty expensive golf lesson

Anonymous said...

I wonder: Is Greg Swan bawling balefully in private right now. I'm sure he'll never admit publicly how foolish he was.

wallstreetveteran said...

PERFECT POST. Lifestyle, migration, and golf have nothing to do with IF YOU ARE PAYING THE RIGHT PRICE OR NOT. People dont understand mortgage rates, tax, inflation, asset bubbles. They get some pitch about snowbirds and they buy......WHEN IS THE PUBLIC GOING TO SMARTEN UP? ITS SAD

marco said...

Phoenix isn't a bad part of the country, and is a nice place to live for many people. It's too bad that stated income and major speculation destroyed their real estate market. Once those crashing home prices find their bottom (when ever that is) and those bad loans are largely purged out of the system then those 21 points might be a little more valid.

It truly is amazing though how Realtors in large part don't understand (or choose to ignore) the economics of Real Estate. The fact that this guy assumingly believed that real estate values would continue to converge away from rents and real income growth just proves that he's as clueless about the economics of real estate as is Wall Street.

Your Computer Concierge said...

Greg Swann, a Phoenix real estate agent, took a moment to marvel at the news. "What happened here will some day be a new chapter in 'Extraordinary Popular Delusions and the Madness of Crowds,' " the classic survey of investing mania, he said. "We were living during the boom like there was no tomorrow. And guess what? Now it's tomorrow."

Home Prices Continued Their Decline in February - (29 April 2009)