Median homes prices are up
The good news this month in metro Phoenix housing is that the median new home price for the month rose to $197,948 from last month’s low point of $183,750 which matched prices in the summer of 2004. Certainly one month doesn’t confirm a change in the trend of sliding median new home prices, but a new path has to have a beginning, and August could represent that new start and be a sign of a change of pricing direction for the new home market.
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For the first time in five years, existing-home sales have increased for four months in a row.
The national median existing-home price3 for all housing types was $178,400 in July, which is 15.1 percent lower than July 2008. Distressed properties continue to weigh down the median price because they typically sell for 15 to 20 percent less than traditional homes.
Single-family home sales increased 6.5 percent to a seasonally adjusted annual rate of 4.61 million in July from a pace of 4.33 million in June, and are 5.0 percent higher than the 4.39 million-unit level in July 2008. The median existing single-family home price was $178,300 in July, which is 14.6 percent below a year ago.
Since it’s now taking longer to complete a home sale, first-time buyers who want to take advantage of the $8,000 tax credit should try to make contract offers by the end of September.
Source:NAR
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Leave it to google to show us from a birds eye perspective the amount of foreclosures our country has. Click here if you really want to see how we compare to the rest of the country.
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July 09 Stats
Well my buddy RL at www.rlbrownreports.com has his newest reports out. The number of new home permits is up as well as the number of sales for both new and resale homes. What’s driving this? It’s the investors coming out and snapping up the foreclosures as fast as they can. Nearly every offer I made over the past week has had multiple offers on them. Many listings are selling for 3-5% over the list price. Helping buyers understand this at first can be a challenge, but after missing a home or two that changes.
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The Phoenix Real Estate Market is shifting quickly. Check out the number of listings (blue) VS. the number of sales (black). During the months from March to April you will see a dramatic drop in the inventory available. The numbers are not out yet, but based on the number of pending sales, the drop will be even more significant from April to May. Typically, as inventory drops, values begin to go up. www.phxhomes.com
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REO Sales are Dropping
Hey Scott, what is the percentage of resale and REO home sales in Phoenix? That’s a great question, and here’s the answer. Resale homes sold 1% more than last month.
The Phoenix Market is changing. This is a great way to see visually the change in REO Sales. Since January of this year (‘09) the number of REO sales has reached it’s highest levels and is on a steady decline.
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President Barack Obama signed the American Recovery and Reinvestment Act of 2009 into law on February 17, 2009. The bill calls for a tax credit of up to $8,000 for
First Time Home Buyers, who purchase their first home between January
1, 2009 and December 31, 2009. The actual tax credit is for 10% of the
home’s value or $8,000, whichever is less.
If you’ve been waiting for the right time to purchase a home, now is a great time. Especially in Phoenix where house prices are very attractive.
Here’s a Q & A on what all this means:
Question? What is a tax credit?
Answer: Tax credits are sometimes confused with tax deductions, but they are not the same. A tax credit is a dollar for dollar decrease in the amount of taxes owed, whereas a tax deduction is a decrease in the amount of taxable income. A tax credit is usually much better.
Question? What is a first time home buyer?
Answer: The federal government defines a first time home buyer as those who are buying a primary residence and have not owned a home in the past 3 years.
Question? What time period is covered by the incentive?
Answer: The purchase date, which is the date the home closes escrow, must be between Jan. 2009 and December 2009. First time buyers that applied for the $7,500 tax credit may still opt for the $8,000 tax credit by filing an amended tax return using the 1040X form.
Question? What is the purchase price and income requirements for receiving the full $8,000.
Answer: The tax credit is good for 10% of the purchase price of the home up to the full $8,000. For example: if you purchase a home for $70,000 the tax credit would be $7,000. If the purchase price is $100,000 the full $8,000 tax credit would be available. To receive the full tax credit, the purchasers annual “modified adjusted gross income” as defined by the IRS must be no more than $75,000. A married couple’s combined must be no more than $150,000.
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What did I say earlier?
This report below shows what I’ve been saying. Now is the time to buy. The market has shifted in an upward direction. How long before investors realize they missed the bottom they’ve been looking for. (see my earlier post)
Existing-Home Sales Show Strong Gain
In December
WASHINGTON,
January 26, 2009
Existing-home
sales rose unexpectedly while inventory declined, led by a surge of
sales in the West, according to the National Association of Realtors®.
Existing-home sales – including single-family, townhomes,
condominiums and co-ops – jumped 6.5 percent to a seasonally adjusted
annual rate1 of 4.74 million units in December from a
downwardly revised pace of 4.45 million units in November, but are 3.5
percent below the 4.91 million-unit pace in December 2007.
For all of 2008 there were 4,912,000 existing-home sales, which was
13.1 percent below the 5,652,000 transactions recorded in 2007. This is
the lowest volume since 1997 when there were 4,371,000 sales.
Lawrence Yun, NAR chief economist, said home prices continue to fall
significantly. “It appears some buyers are taking advantage of much
lower home prices,” he said. “The higher monthly sales gain and falling
inventory are steps in the right direction, but the market is still far
from normal balanced conditions. Buyers will continue to have an edge
over sellers for the foreseeable future.”
Total housing inventory at the end of December fell 11.7 percent to
3.68 million existing homes available for sale, which represents a
9.3-month supply2 at the current sales pace, down from a 11.2-month supply in November.
Yun said the market is underperforming and hurting the broader
economy. “We’ve added 25 million people to our population over the past
decade and housing affordability conditions are the best we’ve seen
since 1973, but household formation is much lower than expected,” he
said. “Consequently, there is a pent-up demand which could be unleashed
with the right stimulus, including a non-repayable home buyer tax
credit. The Obama administration and Congress need to move fast to
stimulate a spring sales upturn which will help to stabilize home
prices and set the foundation for a sustainable economic recovery.”
The national median existing-home price3 for all housing
types was $175,400 in December, which is 15.3 percent below December
2007 when the median was $207,000. There remains a significant downward
distortion in the current median from a large number of distress sales
at discounted prices, currently 45 percent of transactions; the median
is where half of the homes sold for more and half sold for less. For
all of 2008, the median price was $198,600, down 9.3 percent from
$219,000 in 2007.
NAR President Charles McMillan, a broker with Coldwell Banker
Residential Brokerage in Dallas-Fort Worth, said it’s an excellent time
for first-time home buyers with good jobs. “The typical buyer plans to
stay in their home for 10 years, which is the correct approach in
today’s market,” he said. “With historically low mortgage interest
rates, flexible sellers, a large inventory, and homes that are selling
for less than replacement construction costs in much of the country,
buyers who’ve been on the fence should take a closer look at today’s
market.”
McMillan added that first-time buyers may want to consider an FHA
loan, which offers downpayments of 3.5 percent on a safe 30-year
fixed-rate mortgage.
According to Freddie Mac, the national average commitment rate for a
30-year, conventional, fixed-rate mortgage fell to 5.29 percent in
December from 6.09 percent in November; the rate was 6.10 percent in
December 2007. Last week, Freddie Mac reported the 30-year rate was
5.12 percent.
Single-family home sales rose 7.0 percent to a seasonally adjusted
annual rate of 4.26 million in December from a level of 3.98 million in
November, but are 1.4 percent below a 4.32 million-unit pace in
December 2007. For all of 2008, single-family sales fell 11.9 percent
to 4,349,000.
The median existing single-family home price was $174,700 in
December, down 14.8 percent from a year ago. For all of 2008, the
single-family median was $197,100, which is 9.5 percent below 2007.
Existing condominium and co-op sales increased 2.1 percent to a
seasonally adjusted annual rate of 480,000 units in December from
470,000 in November, but are 18.4 percent below the 588,000-unit level
a year ago. For all of 2008, condo sales dropped 21.0 percent to
563,000 units.
The median existing condo price4 was $181,400 in
December, down 18.3 percent from December 2007. For all of 2008, the
median condo price was $210,000, which is 7.2 percent below 2007.
Regionally, existing-home sales in the Northeast slipped 1.4 percent
to an annual pace of 720,000 in December, and are 14.3 percent below
December 2007. The median price in the Northeast was $235,000, which is
7.8 percent lower than a year ago.
Existing-home sales in the Midwest increased 4.0 percent in December
to a level of 1.04 million but are 10.3 percent below a year ago. The
median price in the Midwest was $140,800, down 11.4 percent from
December 2007.
In the South, existing-home sales rose 7.4 percent to an annual pace
of 1.74 million in December, but are 11.2 percent lower than December
2007. The median price in the South was $158,600, which is down 8.0
percent from a year ago.
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The Point of Realization
Strange as it seems, just three short years ago buyers couldn’t stop making multiple offers on homes as the prices kept going up and up. Fast forward to 2008 and now prices have dropped lower than 2003 levels. The real investors waited and are now buying in not a sellers market, but in a buyers market. Play this game with someone sometime. Draw a line going down and tell them to stop you when it’s reached the bottom. As you draw your line down, make a turn going back up at anytime. They will just about always stop you just as you have rounded the turn going back up… but they always miss the bottom. It’s the same with the current market. Housing prices have been on their way down for three years and I still have people say “It’s going to be a while before they come back up.” Yes there are indicators to look at that help point to where the market is going, but nothing will help you know when the market is on it’s way up until it’s already going up… just like the drawing illustration.
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Tags: housing prices, investors, Phoenix housing Market Statistics, phoenix market, Phoenix Real Estate
The graph below is the rate in which the values in Arizona have appreciated over the past 33 years. Everyone keeps wondering when the bottom is coming. You can clearly see from this we most likely have reached the bottom. When people ask me when will the bottom come, I always tell them this, “When an investor can buy the property with 20% down and rent in out for the same amount as the mortgage, we’ve hit the bottom.” It’s really that simple. Investors know that a house is the only thing in the world you can buy that someone else will pay for while it keeps going up in value. That time has come and the smart investors are already buying.
Now is the time to buy. If you or someone you know would like to take advantage of this unique time, please call me to set up an appointment. My office sells more foreclosures than any other office in the valley. The media is generally 6 – 8 months behind in reporting accurate Real Esate information. Don’t wait. Check out this article by the New York Times written today.
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Recent Entries
- Median homes prices are up
- For the first time in five years, existing-home sales have increased for four months in a row.
- New way to see foreclosures (google maps)
- July 09 Stats
- Phoenix Housing Market is Shifting
- REO Sales are Dropping
- How to get $8,000 Home Buyer Tax Credit
- What did I say earlier?
- The Point of Realization
- Arizona Housing Appreciation Rate
- Current Phoenix Real Estate Market Statistics
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