The Arizona Republic reports that the Phoenix area housing market is at a crossroads:
- Long-term buyers–People who buy to settle into a permanent home
- Short-term buyers–People who look to buy for equity they can cash in at the right opportunity
For many years, Long-term buyers dominated the market, but such is no longer the case. When the AZ housing market had a steady growth in housing prices every year, this caused many homeowners to buy a house and stay there for about 7-10 years, then selling it, and making a profit.
In 2000, the psychology of the metro Phoenix housing market reached a tipping point, and the speculative segment took off. Years of steady appreciation on what were still considered affordable homes stoked demand. Arizonans jumped from one house to the next. And affordable prices and steady gains attracted thousands of buyers from California.
Both short-term buyers and investors turned to the booming Phoenix market, on of the hottest markets in the nation. Phoenix drew many from California, and population increased. Even though it reached its peak and 
burst in 2008, this hasn’t stopped buyers and investors from looking to the Phoenix market. Now, many are scooping up foreclosures whether to flip them and resell, rent them out, or just get a great house for cheap.
At this point, the psychology of the Phoenix housing market will be critical in determining whether the market will return as one dominated by short-term or long-term buyers.
The return of a more dominant long-term mind-set that sees houses as homes could help anchor a new economic model, a plan that looks beyond the next growth boom. A continued short-term, speculative view could maintain the larger boom-and-bust cycles that have characterized Phoenix’s economy for the past 50 years.
Experts say the housing bust could be the end of the Phoenix boom days, but it all depends on the mindset of the buyers when they return to the housing market.
