Phoenix is not in a real estate bubble

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By Jennifer Thomas By Jennifer Thomas

PHOENIX -- Phoenix is not creating another housing bubble, according to a new report from Michael Orr of the W.P. Carey School of Business.

He said the Phoenix market has stabilized. Arizona Re/Max Excalibur Realtor Grant MacKenzie agrees.

"We are finally in a normal market," MacKenzie said. "Our market has gone up and down dramatically."

MacKenzie said even though it's a great time to buy, some homebuyers are not finding what they need.

"It's happening quite a bit," he said.

Orr said choices for anyone wanting to buy a Phoenix-area home for less than $175,000 are pretty slim.

"There's nothing wrong with renting if you think you might be moving in the next two years," Orr said.

He said buying would be better.

"We're not in a bubble situation," Orr said. "We're not going to see prices collapse from where they are now. I'm pretty confident in that."

MacKenzie said investors swooped up many of the under-$175,000 homes and rehabbed them to make them more valuable. So what does that mean when you can't find something you can afford to buy in the neighborhood you love?

"You have to search and you have to be willing to make some sacrifices," MacKenzie said. "You're not going to get everything you want under $200,000. So you may to sacrifice location. You may have to sacrifice not as many bedrooms."

He said you may have to go to Queen Creek, some pockets of Gilbert and Glendale for under $200,000. But MacKenzie said with interest rates very low right now, that might just get you into your dream home down the road.

"If you want to move back to that neighborhood and raise your family there then take the equity out of your house and buy a home," MacKenzie said.