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Are We In Another Real Estate Bubble in Arizona?
Are We In Another Real Estate Bubble in Arizona? Check out this recent blog post originally published here: Are We In A Bubble?
“Deregulation and bank consolidations resulting from the 1999 Gramm-Leach-Bliley Act, paired with diversification and proliferation of collateralized debt obligations in the early 2000’s, set the stage for real estate bubbles to form and burst across the nation in the following years. Several factors unique to Phoenix, including the state’s risk-averting anti-deficiency laws, healthy job market, and affordability relative to other metro areas drew investors and traditional buyers here in droves from 2003-2006.
Aggressive home ownership campaigns and loose lending practices had initially spurred demand, causing prices to rise faster than normal by late 2003. General sentiment was that real estate could only go up in value, and buyers started to panic at fleeting affordability. They convinced themselves it was their last chance to acquire investment properties, switch from renting to owning, or move into better locations or bigger homes. They joined the frenzy, leveraged their money, purchased everything they could, and drove up prices even more. Investors were pinching themselves because it was so easy to gain equity, and they wanted more, more, more! Home values in most parts of ... more
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