Investor bids for fixer upper properties have plummeted

[Joey Chrisman]

Amazed at how fast the market has shifted. It seems like many flippers in the Scottsdale/Phoenix market are getting caught naked as the tide goes out as Warren buffet says. Was looking at an auction property on the mls listed at $300k starting bid. The owner of this property paid $643k in March of 2022 and gutted the property expecting to flip it. Apparently they must of thought the market was going to continue to be strong regardless of what rates do. Fast forward to today and they decided to see if other investors would take their "investment"/problem first they listed it on the MLS for 700k to no luck and then recently put it up for auction on the mls at $500k starting bid. There was no interest so the auctioneer lowered it to $300k start price and the property was bid up to $360k. The auction was non binding and the sellers did not accept. It sure seems like any investors with cash now to buy properties that require a big rehab are no longer being anywhere close to as aggressive as they were just a few months ago. 643k to 360k is a crazy fast drop. I think there are going to be many more of these deals where investors caught in this shift are going to be the first ones to turn into motivated sellers in this market. I am simply amazed at how the demand has fallen off this hard in such a short amount of time. It seems like sellers prices are still in the clouds but buyers are at the ground... if a deal wants to happen it sure seems like the clouds will have to now come down to the ground unlike the past couple of years. Anyone else seeing similar things in the Phoenix market now?