If you believe what people in the business say, it appears that real estate is recovering in Arizona. In fact, having been hit hardest, Arizona is recovering the fastest of the many states whose economies crashed on the collapse of the real estate bubble. One guru, Michael Orr, reports a 3 percent increase in sale prices. Could be: speculators are flooding into the area and buying up everything between $100,000 and $200,000, planning to turn them into rentals. Realtor friends say they can’t find moderately priced homes for normal buyers, because every such house has a dozen bids on it within a few days of hitting the market. In February, Phoenix-area single-family home sales rose 10 percent compared to February 2011. Inventory is down 42 percent. The inventory of single-family homes under $250,000 is now below a 25-day supply.
It is, in short, a buyer’s market.
It may be a pretty artificial market, since the phenomenon is being driven by speculation. However, after the savings and loan fiasco, which caused a similar real estate crash here (that was what allowed me to buy a house in the pricey North Central area: my buyer’s agent got the place for $30,000 under the asking price, which was itself under market), the recovery was similarly driven by “investors”—another word for speculators.
If in fact prices are rising by 3 percent a year, which historically has been a pretty normal rate here, the value of the downtown house will return to what M’hijito and I owe on the place in six years. The balloon payment that will happen on the 40/15 mortgage comes due in about 10 years.
We’re not going to come out of it smelling like the proverbial roses, but we should at least be OK. We’ll be forced to either sell or refinance at that time. Of course, mortgage rates will be much higher by then, and so even though we’ll refinance a lower principal, monthly PITI will probably go up. We’ll be lucky if it stays the same…and since we didn’t win the lottery, I kinda doubt that we’re gifted with some Karmic package of luck. However, we at least won’t be on the verge of bankruptcy, as we have been for so long.
Speaking of real estate, down at the college we’re told by our licensing course instructor that now is the time to get into the business. Well. I’ll believe that when I see it. But I am enjoying the course. It’s very interesting, and I’m learning a lot of stuff I wish I’d known when we (my son, my ex- and I) were buying the various shacks we’ve lived in over the past 30 years or so. I’d highly recommend that anyone who is interested in personal finance, and certainly anyone who thinks they’d like to invest in real estate rentals or fix-and-flips, take one of these inexpensive community-college courses in real estate. An enormous amount of useful information has come forth.
Whether I’ll pass the final remains to be seen. It will be over the entire book, and since I joined the group in the second term, of course I haven’t read the whole book. Though I’ve been trying to catch up, I very much doubt that over the next 18 or 20 days I can read and absorb another 11 chapters while trying to keep pace with the present assignments and prepare for a final exam. The work load here has been phenomenal, with a client who thinks we’re going to produce an entire book in an unreasonable period—we should have told this guy at the outset that we could not do it in 10 weeks, but at the time, I thought he had in mind our editing copy, not ghost-writing most of it. The amount of extra work imposed by the real-estate course has made it impossible for me to keep up the schedule he thinks we’re going to meet, and so I expect we’ll lose that client.
Not so great for Tina, but from my point of view…something’s gotta go. One little crisis like this week’s e-mail melt-down puts me completely underwater in terms of workload. Truly: a 42-hour work day is beyond the pale. I’m still exhausted from that fiasco. This business of working like an animal for little or no pay has simply got to stop.
Right now I feel torn in several directions: Don’t know whether it’s better to drop everything and focus on the real-estate licensing project, or to drop everything and focus on producing a couple of e-books that could be marketed for fun and profit, or to drop everything and focus on building the editorial business in a new direction, or to just drop everything, period.
This summer I’ll be teaching one course. It’ll only take a couple of days to clean out the website and and get new course packets printed. But next fall I’ll have a 101 course, and I haven’t rewritten that around some solid subject matter, along the lines of the 102 course (whose success remains to be seen, anyway). It’ll take about two weeks to build that, but even then, it should leave a fair amount of free time over the next three months. Now—probably right now—I need to decide how best to use that time. And the truth is, I have no clue.