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
Filed under: Uncategorized | Leave a Comment
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.
Filed under: Uncategorized | Leave a Comment
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.
Filed under: Uncategorized | Leave a Comment
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.
Filed under: Uncategorized | Leave a Comment
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.
Filed under: Uncategorized | Leave a Comment
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.
Filed under: Uncategorized | Leave a Comment
Filed under: Phoenix Real Estate, Uncategorized | Leave a Comment
Tags: July 2008 Phoenix housing, Phoenix housing Market Statistics, Phoenix Real Estate
How to buy foreclosures
You’ve heard that your cousin’s husband’s brother’s son just bought a $200,000 two story for $120,000 and you want to get in on the action, right? ME TOO. I get calls all the time from buyers who say “I’ll buy anything that’s priced at 75% of market value and I usually respond with; “Get in line behind me”.
Here’s a list of do’s and don’ts for buying a bank owned property.
1. Cash speaks very loud but not as loud as you might think or have been lead to believe. The net amount the seller will receive is usually the most important factor. I’ve had asset managers accept offer that included financing and inspections that net them just a few hundred dollars more than cash offers with no contingencies. Don’t make much sense to me, but then, I’m not the seller.
2. Get pre-approved. NOT just pre-qualified, The bank will not consider your offers unless the offer is submitted with a pre-qual letter. Just recently we’ve had the banks requiring proof of funds for down payments as well as pre-qual letters. With cash offers, be prepared to supply proof of funds when you submit the offer.
3. Know the loan that you’re pre-approved for. Ask your loan officer if a fixer-upper would qualify for the type of loan that you can qualify for. Many bank owned properties need some work; some need a lot of work. It’s usually the later that may seem like a great bargain but many loans will not approve homes that are fixer-uppers.
4. Inspect, Inspect, Inspect. Not just the mechanical items but also the surroundings. We’ve had at least 6 properties within the last year that the seller walked away from because there was a (insert issue here) issue that could not be easily resolved. Easement. Encroachment. Sewer line. Etc. “issues” can be broad, don’t assume anything.
5. All agents are not created equal. I know… your sister has a real estate license and if you don’t use her you might be shunned by the family. If your going to get involved with purchasing a previously foreclosed property then you better be using an agent with lots of experience with bank owned properties. (same holds true for short-sales. Not all agents who handle bank owned properties know about short sales and visa-versa.) Don’t use the listing agent, it will not get you a better deal. You definitely want to be represented by your own buyer’s agent who has bank owned experience.
6. Be prepared to sign the bank’s purchase addendum. Yes, the banks will make sure they are protected. Most of the bank’s addendum’s if seen lately are anywhere from 8 to 25 pages. They all say “as is” in multiple locations but they also have lots of other clauses that you won’t normally see in a traditional real estate transaction. If contracts are scary to you have an attorney who will work with you, review the contracts and get back to you very quickly. But, don’t expect to make too many (usually none) changes to the banks addendums. Either accept that “no resale within 6 months for more than a 20% profit” clause, or don’t buy the house.
7. Calendars and clocks run of different schedules for banks. Don’t think that because you gave them a 36 hour deadline to respond that you are entitled to a response. But, on the other hand, they will expect your prompt response. They can not and will not be intimidated by deadlines and threats of losing a deal if they don’t respond. I have witnessed buyers who have walked over a couple thousand dollar counter offer and banks who say, “whatever, we’ll just sell it to someone else” and then actually sell it to someone else for $8,000 less, next week.
8. Don’t think that you will get or are entitled to a counter offer or signed rejection. In a perfect transaction counters and signed rejections make everyone life easier. Regardless of what you’ve heard or the seller is not required to respond at all.
9. Regardless of the excuse the bank will expect you to close on the date on the original contract. Appraiser could not get in? There was a tornado? Underwriters and back logged by 2 weeks? Doesn’t matter. If you can’t / don’t close on the scheduled date, expect to pay a hefty penalty (sometimes a couple hundred dollars) per day until it is closed.
10. Don’t go out and write low ball offer’s on every back owned property hoping that someone will bite. Asset managers despise time wasters. I’ve had decent offers that were not even considered by the bank because the asset manager recognized the buyers name from previous multiple low ball offers on other properties. If you want the best deal, then determine what your best offer would be and make that offer first.
11. Despite what you might read in media about houses being on the market for months and months this just doesn’t hold true for bank owned properties. They price these properties with the intent of having them sold within 30 days. When they price them right there are many times multiple offers at the same times. I’d had properties recently that sold for 30% over asking price, and buyers upset they weren’t the winner bidder with a 120% offer. MAKE YOUR BEST OFFER FIRST and don’t start second guessing what you might have been able to buy it for.
12. Call me. It’s FREE to have a Professional Realtor help you in the process of finding and purchasing foreclosures. The advice and time you will save is priceless… well, literally!
Scott Harris, ABR 602-841-8242
Filed under: Uncategorized | Leave a Comment
Foreclosure map for US
I came across a way to visually see just what the sub-prime foreclosures look like across the country. This closely matches the construction boom in the small map below. Click here for full size version
Filed under: Uncategorized | 1 Comment
Median Home Prices in Phoenix
Currently the median home price in Phoenix is at $279,000. That’s -15.2% over the past 12 months and -1.8% in the past month. You’ve always heard to buy low and sell high. This is the time for some amazing deals right now.
Filed under: Phoenix Real Estate | 1 Comment
Recent Entries
- 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
- How to buy foreclosures
- Foreclosure map for US
- Median Home Prices in Phoenix
- Worry
Categories
- Phoenix Real Estate (6)
- Uncategorized (13)
